Last checked at 9 Mar 2018 07:00
Renold plc
("Renold", "the Company" or "the Group")
Trading Update
9 March 2018
Renold, a leading international supplier of industrial chains and related power transmission products, is today issuing a Trading Statement covering the five month period from 1 October 2017 to 28 February 2018.
Our interim results announcement on 14 November 2017 noted the impact that increased raw material prices were having upon the Group's operating margins, particularly in the Chain division. We are making good progress in passing these additional costs on to customers, although progress on the realisation of these price increases has been slower than anticipated. Raw material prices have continued to increase in certain territories and, along with the weakening of the US dollar exchange rate, are necessitating further sales price increases.
The weaker US dollar also impacts the sterling value of the reported results from our North American business units.
The above factors are predominantly impacting the Chain division. The Torque Transmission division remains on track to perform in line with the Board's expectations.
Consequently, the Board expects growth in reported revenues of approximately 5% for the year ending 31 March 2018. Adjusted operating profit1 for the Group is expected to be below previous expectations and slightly below the reported adjusted operating profit for the years ended 31 March 2016 and 31 March 2017.
Robert Purcell, Chief Executive of Renold, said:
"The increase in raw material prices has been significant, both in scale and speed, and has challenged our ability to pass these costs through to customers at the same pace. The adverse impact on profit of timing differences between increasing costs and the off-setting sales price increases being realised has continued through the second half of the year.
This is masking the positive effects of our strategic actions which are delivering organic growth across most Chain and Torque Transmission business units. These actions have also improved the resilience of the Group when faced with challenging conditions, as demonstrated by a third year of consistent profit delivery. We continue to remain focused on executing the Group's strategy in order to deliver sustainable improvements in performance."
There have been no other significant changes in the position of the Company since the publication in November 2017 of the interim results for the six month period ended 30 September 2017.
(1) Adjusted operating profit excludes exceptional items, the costs of administering closed defined benefit pension schemes and amortisation of acquired intangibles.
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