Renold reports strong growth as net debt widens
Industrial chains and transmission products supplier Renold reported significant growth in its final results on Wednesday, with revenue jumping 26.6% to £247.1m.
The AIM-traded firm said that when adjusting for constant exchange rates, its growth for the 12 months ended 31 March remained substantial at 18.8%.
Its adjusted operating profit soared 58.2% to £24.2m, and its return on sales experienced a significant boost, reaching 9.8% and showing a 200 basis point improvement.
Renold's reported operating profit was ahead 41.4% year-on-year at £22.9m, while its net debt widened £16m through the year to end the period at £29.8m.
The board put the growth in debt down to the successful acquisition of YUK.
Renold's debt-to-adjusted EBITDA ratio was 0.8x at year-end, compared to 0.5x on 31 March last year.
The company said adjusted earnings per share rose 51.2% to 6.5p, while basic earnings per share reached 5.7p, compared to 4.7p in 2022.
“I am delighted with the group's robust performance during the last financial year which delivered record results and exceeded market expectations, reflecting the benefits of the strategic programmes implemented in recent years,” said chief executive officer Robert Purcell.
“Throughout the reported period, the business performance has been on an improving trend and our order books continue to be healthy though order patterns have been inconsistent in the early part of the new financial year.
“We recognise that there are still considerable economic challenges in many parts of the world; supply chain issues, although reducing in number and severity, are still prevalent and inflation and prices remain high, for both energy and materials.”
However, Purcell said Renold entered the new financial year with “good momentum and confidence” in the “excellent fundamentals” of its business, although macroeconomic trends added a note of caution.
At 0856 BST, shares in Renold were down 3.81% at 29p.
Reporting by Josh White for Sharecast.com.