LONDON (Alliance News) - Renold PLC on Tuesday said its underlying sales fell in the first quarter of its financial year as it was hit by volatility in its end markets, though it still expects adjusted operating profit to meet its forecasts thanks to margin improvements.
The industrial chains and power transmission products company said it has continued to make progress on its adjusted operating profit and margin in the first quarter on the back of its cost-cutting plans, but weak conditions in its end markets meant its underlying sales in the quarter to the end of March were down by 4.1%.
Renold said that excluding a non-recurring Swiss project the prior year the decline was 1.1%.
The Chain division of the company delivered underlying sales growth of 1% in the quarter, excluding the Swiss project, but down 3.0% including it.
Underlying sales in its Torque Transmission business dropped 7.1%, with the majority of its sub-units seeing declines, Renold said.
Margin gains, however, have offset the fall in underlying sales, and Renold said it continues to see adjusted operating profit for the full year in line with its expectations.
"We continue to demonstrate the robustness of our business model driven by our STEP 2020 Strategic Plan. Further margin gains have been delivered in the first quarter despite ongoing challenging conditions in many of our end markets. We remain well placed to take advantage of further self-help initiatives and opportunities to grow the business," said Robert Purcell, Renold's chief executive.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Renold (RNO)