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(Alliance News) - Renold PLC on Wednesday celebrated a strong performance over the last financial year, as it enjoyed boosts to both revenue and profit, though it decided against a dividend.
For the 12 months ended March 31, the Derby, England-based supplier of industrial chains and power transmission products reported pretax profit of GBP17.3 million, up 40% from GBP12.4 million a year prior.
Revenue increased 27% to GBP247.1 million from GBP195.2 million. Adjusted operating profit rose 58% to GBP24.2 million from GBP15.3 million year-on-year, while adjusted earnings per share rose 51% to 6.5 pence from 4.3p, and basic earnings per share climbed 21% to 5.7p from 4.7p.
Net debt, however, stretched to GBP29.8 million from GBP13.8 million the previous year. Renold attributed this to the GBP17.8 million of initial acquisition cash consideration paid during the year for Industrias YUK SA.
Last August, the firm paid EUR24 million in cash to buy the Valencia-based manufacturer and distributor of conveyor chain and ancillary products. It said that the acquisition would increase its access to the Iberian chain market, as well as expand the sales of its existing range of European TRC products.
Chief Executive Robert Purcell said that YUK is already "performing ahead of the board's expectations" at the time of the acquisition, and contributed GBP10.5 million - or 4.5% - of the group order intake during the year. Total group order intake was GBP257.5 million, up 15% year-on-year.
Looking ahead, Purcell said: "We expect the current financial year to be no less challenging, but we remain vigilant in the environment within which we operate; however, we started the new financial year from a positive position with good momentum and confidence in the capabilities and fundamentals of the Renold business and the markets we serve."
The board did not recommend the payment of a dividend, unchanged from the prior year.
"The board fully recognises the importance of dividends as part of the overall value creation proposition for shareholders. However, the board has carefully reviewed its capital allocation priorities, and believes that both organic and inorganic investment opportunities that are available to the group will deliver higher levels of shareholder return over the medium term than the payment of dividends in the near term. The board will continue to review this approach over the coming periods," Renold said.
Renold shares were trading 5.4% lower at 28.54 pence each in London on Wednesday morning.
By Holly Beveridge, Alliance News reporter
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