Last checked at 
LONDON (Alliance News) - Renold PLC on Tuesday said, whilst it experienced difficult trading conditions in its first half, underlying order intake grew and it remains on track to deliver full year adjusted operating profit in line with market expectations.
The industrial chains and power transmission products supplier said its revenue for the six months ended September 30 increased 4.5% from the prior year to GBP88.3 million from GBP84.5 million, as order intake in the period grew 9.2%.
On an underlying basis, though revenue declined to GBP88.3 million from GBP92.0 million, resulting in adjusted operating profit of GBP7.0 million, down from GBP9.0 million. Underlying results adjust the prior period results to the current period exchange rates to give a like-for-like comparison.
Renold said its Chain division performed ahead of slightly negative expectations, with underlying revenue up 1.9% to GBP71.1 million from GBP69.8 million, benefiting from the group's Tooth Chain acquisition in the fourth quarter of the prior financial year. The division performed strongly in both Europe and Australasia, but poorly in all other territories.
Meanwhile, in the Torque Transmission division, trading conditions were tough with falls in sales dropping through into operating profit and margins. Underlying external sales were down 23% in this division and the underlying operating profit margin fell to 7.0% from 18%.
In light of its efforts to improve the performance of the business, Renold said it was not declaring an interim dividend, and its dividend policy will remain under review as margin and cash flow performance continue to develop. Renold offered no dividend the prior year either.
Renold said early indications of trading conditions since the end of its first have "have been consistent" with those seen in the first half, with both sales and orders in October ahead of the same period the prior year on an underlying basis.
"Amidst continued volatility, the translation benefit of weaker sterling is continuing," Renold said, noting that the Chain division was continuing to recovery and the volatility being experienced by its Torque Transmission division was at a reduced level from the first half.
"In the expectation that current trading patterns persist in the second half, the board is confident that full year adjusted operating profit will be in line with current market forecasts," Renold said.
"The business remains well placed to take advantage of any improvement in general trading conditions while also being able to deliver progress through self-help measures," the group added.
Shares in Renold were untraded on Tuesday, having last traded at 39.75 pence.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
