Renold Regulatory News (RNO)

13 Feb 2008 07:00

Renold PLC13 February 2008 Renold plc ("Renold",the "Group" or the "Company") Interim Management Statement Renold is today issuing its interim management statement for the third quartercommencing 1 October 2007. Trading is progressing in line with the Board's expectations and the Company'sPACE initiatives continue to progress well. Overall orders and sales for theCompany for the third quarter are ahead of the same period last year. During the third quarter the order book has continued to strengthen; inparticular our US chain business has seen an increase in orders which shouldlead to a significant increase in US sales in the final quarter. Orders frommajor distributors serving the Maintenance Repair and Overhaul ("MRO") marketwere particularly strong. Since divesting our Automotive and Machine toolsbusinesses in 2006, MRO sales as a percentage of Group revenues, have grown toover 50% of total sales (35% pre-disposal). The MRO market provides anon-cyclical defensive revenue stream. In addition, during November the Company was awarded a USD 14 million contractextension to supply couplings and gearboxes to Alstom for the New York MassTransit Authority. This contract is phase 2 of a 3 phase schedule and isexpected to be fulfilled over an 18 month period commencing in May 2008. TheCompany is bidding for similar supply contracts for Mass Transit applicationsand the outcome of the first of these is expected to be known before thefinancial year end, 31 March 2008. Operationally, the integration of the important strategic acquisition in China,Renold Hangzhou, is proceeding to plan and revised operating and managementprocedures being rapidly adopted. Almost £2 million of planned capitalexpenditure has been committed since the acquisition in June 2007 with theobjective of doubling the capacity of the facility by March 2008. Output inDecember was 30% higher than at the time of acquisition. The purchase is a keyelement in the PACE program which is designed to boost margins to a run rate ofgreater than 10% by 2008/9. The PACE initiatives implemented in the current financial year will result incost savings for the financial year to 31 March 2009 of £2 million over andabove those achieved in the current financial year. The Board's outlook for thebusiness remains strong with little evidence of a slow-down and its futureperformance is expected to be principally dependent on operational improvementswhich are largely within the Company's control. The balance sheet was further strengthened on 7 January 2008 when the sale ofthe Burton upon Trent factory site to Morris Homes was completed. This salerealized £6.4 million of cash before expenses which has been used to reduceGroup net debt. The majority of the GBP / USD and GBP / EUR foreign exchange currency exposurefor the financial year to 31 March 2009 has been hedged in accordance with theRenold treasury policy. There have been no other significant changes in the position of the Company overthe period since the publication of its half year statement for the six monthperiod ended 30 September 2007. Overall, the Board continues to be satisfied with the progress being made. 13th February 2008Enquiries: Renold plc 0161 498 4500Bob Davies: Chief ExecutivePeter Bream: Finance Director College Hill 020 7457 2020Matthew GregorowskiNicholas Potter NOTE FOR EDITORS Renold is a global leader in the manufacture of industrial chains and alsomanufactures a range of gears and couplings which are sold throughout the worldto a broad range of original equipment manufacturers and distributors. Itsproducts are used in a wide variety of industries including manufacturing,transportation, energy, steel, and mining. Renold has a well deserved reputationfor quality that is recognised worldwide. Renold has 14 manufacturing plants throughout the world and employs 2,500 staff.It is currently expanding its geographical footprint by increasing itsmanufacturing presence in "low cost countries". Further information about Renold can be found on the website: www.renold.com This information is provided by RNS The company news service from the London Stock Exchange