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LONDON (Alliance News) - Renold PLC on Thursday said its full year results are expected to be slightly ahead of previous forecasts, with the volatility in sales and orders having less of an adverse impact in the last two months of its financial year to March.
Shares in Renold were up 13% at 39.50 pence on Thursday morning.
The supplier of industrial chains and related power transmission products said the high level of volatility in sales and orders, reported in February, had continued to the end of the year in March, but its adverse impact had moderated.
Renold said its full-year underlying sales, which exclude the impact of foreign exchange rates, are therefore expected to be 1.0% higher than forecast in its February trading statement, and around 9.0% lower than the prior year.
Renold said the chain division was the main driver of the improvement since February, particularly in Europe and the Americas, and said it expects this division to finish the year down 7.0%, rather than the 8.0% fall it previously forecast.
Renold added, as a result of the slightly better than expected sales as well as ongoing cost reductions, it now expects underlying adjusted return on sales will be flat on last year at 8.6%.
Adjusted operating profit will, therefore, be ahead of current market expectations of GBP13.5 million, the company added.
Renold noted integration of its newly acquired German Aventics Tooth Chain business continues to proceed smoothly with some synergies being delivered in the fourth quarter.
Net debt, excluding the impact of this acquisition, came in better than market expectations, Renold said.
"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," Chief Executive Robert Purcell said.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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