Renold jumps as interim pre-tax profit edges higher

In the first six months of the year, the group posted a 4.5% year-on-year increase in pre-tax profit to £4.6m, while revenue declined 6.8% to £84.5m.

Despite the slight increase in operating profit, Renold said it expects profit for the full year to be at the lower end of market expectations, due to an ongoing deterioration in market conditions in the second half.

The London-listed said revenue in its European division was partly affected by a non-recurring big order it booked in Switzerland last year, while North American sales edged higher thanks to a solid performance in Canada.

"The benefits of our self-help projects have ensured that we continue to improve our profit margins despite challenging and volatile end markets,” said group chief executive Robert Purcell.

“Further projects continue to be developed and delivered for the future and, together with the increased expenditure on attractive capital investments, will continue to lower our breakeven point.”

Meanwhile, the company said it has completed the acquisition of Aventics Tooth Chain, the operating division of Germany-based Aventics Gmbh, a producer of inverted tooth chain for industrial clients, for up to €6.3m (£4.1m).

Renold will pay €4.8m upfront, with the remaining €1.5m payable over the two years following the acquisition.

Renold shares were up 10.19% to 59.50p at 1515 GMT on Tuesday.