Renold sees continued recovery in order intake

Industrial chain and power transmission products supplier Renold said on Wednesday that the recovery in both order intake and revenues had continued, with trading for the year ended 31 March in line with the board's revised expectations.

The AIM-traded firm said group order intake fell 7.4% year-on-year to £170m, although at constant exchange rates, the reduction was 6.6%.

It said that encouragingly, group order intake in the fourth quarter was 10.2% ahead of the same period a year earlier, with the order book at year-end standing at £53.6m - 3.6% ahead of the prior year figure.

Group revenue in the year fell to £165.3m, down 12.7% year-on-year, due to the impact of the Covid-19 pandemic across its key end markets, particularly in the first half.

At constant exchange rates, the reduction was 11.9%.

Trading improved in the latter part of the year, and group revenue in the fourth quarter was behind the prior year by 8.3%, or 5.6% at constant currency, being held back in the short-term by constraints on global supply chains emerging from the coronavirus crisis.

During the year, cash generation outperformed initial expectations, as a strong focus on cash management resulted in a 50% reduction of net debt to £18.4m.

Additionally, Renold announced that on 8 April it completed the acquisition of the conveyor chain business of Brooks in Manchester, for total consideration of £0.6m, including £0.3m of deferred consideration.

“In the current year the business is expected to generate additional sales for the group of around £1.0m, and add £0.2m to group operating profit,” the board said in its statement.

“The business will be integrated into the Renold UK service centre in Manchester.”

Renold said it would provide a further update on trading at its preliminary results for the year ended 31 March on 8 June.

At 1614 BST, shares in Renold were up 2.29% at 22.3p.