Renold loss increases as lower demand holds revenue back

Renold on Wednesday reported a slight drop in interim profits and said revenue had remained flat due to a challenging economic backdrop.

The conveyor chain manufacturer reported a profit before tax of £3.5m for the six months ended 30 September, down from £3.6m in the same period last year.

Revenue remained flat at £98.2m after the AIM traded company suffered a deterioration in demand from distributors and OEMs in its key European and US industrial chain markets during the late summer period.

However, the impact of these difficulties on profitability was controlled by an improvement in adjusted operating profit margin from 7.4% to 7.8%, as Renold said it was taking ongoing actions to improve the business.

These measures included the disposal of its loss-making South African Torque Transmission business, the purchase of a minority stake in Indian Chain and the ongoing successful ramp-up of a new factory in China.

Chief executive Robert Purcell said: "Assuming no further deterioration in trading conditions, these measures will continue to deliver benefits in the second half and beyond, providing resilience through uncertain markets. As market conditions improve and we return to revenue growth, the operational platform being established will enable us to make further progress in growing margins and returns."

Renold shares were down by 2.64% at 20.44p at 1533 GMT.