Renold lifts guidance as industrial volatility eases off

Industrial chains and transmissions maker Renold said its full year results will be not quite as bad as indicated in a profit warning in February.

At that time, Renold said annual sales would be 9% lower than the previous year and profits down 13% due to weakness in many of its end markets in recent months.

But with the adverse impact of the volatility having now "moderated slightly", Renold has said underlying sales were therefore expected to be "around 1% better than forecast".

Adjusted operating profit will be ahead of current market expectations of £13.5m, with adjusted earnings per share "further enhanced by savings in financing costs and the estimated tax rate applicable in the year".

Chief executive Robert Purcell said the company was making good progress in delivering long-term strategy.

"This has allowed us to maintain our operating margins despite a sizeable reduction in underlying sales.

"Whilst we remain cautious on the outlook for sales growth due to the continuing volatility in international industrial end markets, we continue to invest time and resources in projects to support the delivery of our medium term STEP 2020 strategic objective of achieving mid-teens operating margins."

Broker Cantor Fitzgerald said Renold was "highly geared" to an improving trading backdrop over the medium term.