Renold upbeat on strong set of results

Industrial chain and power transmission product supplier Renold reported an 18.1% improvement in revenue in its final results on Wednesday, to £195.2m, or 21.4% at constant exchange rates.

The AIM-traded firm said its adjusted operating profit rose 34.2% over the 12 months ended 31 March to £15.3m, with its return on sales ahead 90 basis points at 7.8%.

Reported operating profit grew by over 50% to £16.2m, from £10.7m in the 2021 financial year.

Net debt totalled £13.8m narrowing by £4.6m over the year, while its net debt-to-adjusted EBITDA ratio fell to 0.6x from 0.9x.

Adjusted earnings per share expanded by 87% to 4.3p, while basic earnings per share rose to 4.7p from 2p.

On the operational front, the company said multiple businesses across the group delivered record results, as its markets rebounded “strongly” from the Covid-19 pandemic.

Its order intake was up 31.7% to £223.9m, while its closing order book stood at £84.1m, up 57% year-on-year at constant exchange rates.

The firm won a “significant” £11m long-term military contract during the period, as it reported success with its strategic capital investment, made in a bid to improve efficiency.

Its board said the “strong performance” was achieved despite “significant” economic uncertainty, cost pressure, material availability and global supply chain disruption.

Record revenue, order intake and closing orders were reported in its Chain Europe and Americas operations, while it also highlighted a successful bolt-on acquisition in the chain division, with a payback of less than two years.

“I am pleased with the group's robust performance through the pandemic which reflected the benefits of the strategic development completed in recent years,” said chief executive officer Robert Purcell.

“Our employees around the world have responded excellently to the challenges we have faced and I thank them for their dedication and commitment to the group and our customers during this difficult period.

“Throughout the reported period the business performance has been on an improving trend and our order books have continued to grow in the early part of the new financial year.”

Purcell said Renold was “cognisant” that there remained “considerable” Covid-19-related challenges in some parts of the world, while supply chain issues were still prevalent and inflation was high.

“However, we have entered the new financial year with good momentum and a belief in the excellent fundamentals of the Renold business upon which we are building.”

At 1138 BST, shares in Renold were down 3.22% at 27.24p.

Reporting by Josh White at Sharecast.com.