Last checked at 19 Jul 2017 07:00
Renold plc
("Renold", "the Company" or "the Group")
AGM Statement
19 July 2017
Renold, a leading international supplier of industrial chains and related power transmission products, is today issuing, ahead of its Annual General Meeting to be held at 11:00am, the following statement in respect of the first quarter of the financial year ending 31 March 2018 ('the Quarter').
Improving order intake in the final quarter of the previous year was converted into growth in underlying1 revenue in the first quarter of the new financial year of 6.6%, largely as a result of an 8.2% revenue increase delivered in the Chain division. As expected, underlying revenue in the Torque Transmission division was more stable, with growth in the quarter of 0.5%.
The Group has experienced sustained increases in raw material costs during the first quarter primarily in respect of steel. Sales price increases have been implemented in response and will help to mitigate the effect on operating margin once orders at the new prices have been delivered.
Order intake in the Quarter was 11.4% ahead of revenue in the same period (book to bill ratio), benefitting from a major project win in UK Couplings, which will deliver total revenue of approximately £5.4m over several years, including circa £1.5m in the current financial year. Excluding the value of orders on this project which generate revenue beyond the current financial year, order intake was 4.7% ahead of revenue (or 1.6% ahead excluding the all orders from this project).
Progress continues to be made on implementing the STEP 2020 strategy, with the final stage of the UK Couplings consolidation, being the sale of the Halifax property, and the closure of a small Torque Transmission manufacturing site in China, being completed in the quarter. The planning and preparation for the relocation of the Chinese chain manufacturing facility continues on plan with the land purchase completed in June 2017 and the construction phase due to commence next month.
The Group remains on track to deliver a result for the full year in line with the Board's expectations.
Robert Purcell, Chief Executive of Renold, said:
"As expected, the improving order intake in the Chain division in the latter part of the prior year has converted into strong revenue growth in the first quarter of the current year. The implementation of sales price increases, to help offset the impact of higher raw material prices are combining with volume growth across all major chain territories.
"For Torque Transmission, revenues in the Quarter have increased slightly. The major project win builds on our specialist UK Couplings product line and will deliver revenue over a number of years, utilising the greater manufacturing capability at the consolidated UK Couplings facility in Cardiff."
(1) The use of "underlying" excludes the impact of changes in foreign exchange rates by retranslating the prior year comparative figures to the current year exchange rate.
ENQUIRIES:
Renold plc | 0161 498 4500 |
Robert Purcell, Chief Executive |
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Ian Scapens, Group Finance Director |
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Arden Partners | 020 7614 5917 |
Chris Hardie |
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Instinctif Partners | 020 7457 2020 |
Mark Garraway |
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Helen Tarbet |
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Rosie Driscoll |
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NOTES FOR EDITORS
Renold is a global leader in the manufacture of industrial chains and also manufactures a range of torque transmission products which are sold throughout the world to a broad range of original equipment manufacturers and distributors. The Company has a well deserved reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, steel and mining.
Further information about Renold can be found on the website at: www.renold.com