Renold to pay first dividend since 2005 as annual profit surges 32%

(Alliance News) - Renold PLC on Wednesday announced its first dividend in almost two decades after reporting record trading performance.

The Manchester, England-based company is a supplier of industrial chains and related power-transmission products.

In the financial year that ended on March 31, pretax profit rose 32% to GBP22.9 million from GBP17.3 million the previous year.

Revenue declined 2.3% to GBP241.4 million from GBP247.1 million, but operating costs were reduced by 5.9% to GBP210.9 million from GBP224.2 million.

The company announced the resumption of dividend payments for the first time since 2005 with a full-year dividend of 0.5 pence per share declared.

Renold cut net debt by 16% to GBP24.9 million from GBP29.8 million, and finished the year holding GBP17.8 million in cash and cash equivalents, down 7.8% from GBP19.3 million.

The closing order book stood at GBP83.6 million, remaining close to record levels and unchanged from the half year position.

Chief Executive Robert Purcell said: "The business is now at an inflection point where we are starting to see the compounding impact of the many recent exciting initiatives as they come to fruition. We have a very clear strategy and are executing it diligently. Our continuous improvement initiatives are building an increasingly efficient, productive and resilient business and are providing an ever improving platform to support our commercial initiatives."

Despite the difficult inflationary, trading, and macroeconomic backdrop, the company delivered record results, noting particularly strong performance from Torque Transmission division.

Divisional revenues from TT rose 9.6% to GBP53.5 million, supported by a recovery in demand across the North American market.

Management successfully managed cost increases by simultaneously running a cost reduction, simplification and standardisation programme.

"Increased capital investment during the year has improved the efficiency, productivity and capability of manufacturing locations, reflected in the strong market progression," the company said.

Looking ahead, Renold expects the current year to be "no less challenging" as pressure on material, labour, energy and transportation continues.

Renold shares were down 4.7% to 59.08 pence each in London on Wednesday morning.

By Elijah Dale, Alliance News reporter

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