Last checked at 14 Feb 2013 07:00
Renold plc
("Renold" or "the Company")
Interim Management Statement
Renold, a leading international supplier of industrial chains and related power transmission products, today issues its Interim Management Statement covering the four month period from 1 October 2012 to 31 January 2013 ('the Period').
Trading
The challenging end market conditions noted at the time of the interim results on 20 November 2012 continued throughout the Period. Underlying Group revenue in the Period was 8.7% down compared to the same four months last year. The financial year to date shows a reduction of 6.9% in underlying revenues compared to the prior year. The deterioration in revenue performance in the Period versus the first half of the year was due to weakness in Torque Transmission and in the Chain Division North American business.
Revenue in the Chain division was 9.3% down in the Period. European Chain revenue fell by 7.5%, an improvement on the fall of 15.8% in the first half. The rate of decrease in Switzerland eased compared to the first half. In contrast, North America experienced a softer market in the Period with a fall of 6.6% compared to 6.3% growth in the first half. Torque Transmission revenue fell by 7.0% in the Period as some of the orders which had been anticipated were not received.
Actions to lower the break-even point in the Chain division continued during the Period. These included the closure of one of the two offices in Switzerland as well as a number of other headcount reductions which are benefitting the second half results.
Underlying revenue in the rest of the fourth quarter is anticipated to be in line with the reductions seen in the year to date. As a result, the Board anticipates that the operating profit for the second half will now be lower than previous expectations and is likely to be broadly in line with the first half.
Working capital and debt
Cash conservation remains a key focus for the business. Working capital continues to be closely managed with the average ratio of working capital to rolling 12 months revenue consistent with the first half. Net debt remains in line with the projections prepared when the Group's new four-year banking facilities were agreed at the end of September 2012.
Review of Operations
At the time of the interim results, the Company announced a fundamental review of the Chain operating model to include our market strategy, operational footprint and overhead structures. Robert Purcell has now joined as Chief Executive and has taken control of this process. The review is ongoing and the Board expects to announce some preliminary findings and their impact at the time of the full year results on 28 May 2013.
There have been no other significant changes in the position of the Company since the publication in November 2012 of the interim results for the six month period ended 30 September 2012.
\* The use of "underlying" excludes the impact of changes in foreign exchange rates.
14 February 2013
ENQUIRIES:
Renold plc | 0161 498 4500 |
Robert Purcell, Chief Executive Officer | |
Brian Tenner, Finance Director | |
Arden Partners (Broker) | Tel: 020 7614 5917 |
Chris Hardie | |
College Hill (Public Relations) Mark Garraway Helen Tarbet | Tel: 020 7457 2020 |
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 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 their website at: www.renold.com