Last checked at 1 Sep 2016 07:00
Renold plc
("Renold", "the Company" or "the Group")
Update on Strategic Plan
Sub-lease for Bredbury and European Distribution Centre Employee Consultation Process
Renold, a leading international supplier of industrial chains and related power transmission products, today issues an update on its STEP 2020 Strategic Plan.
Bredbury Vacant Leasehold Property
The Group has now secured a sub-lease for the vacant 90% of the former UK chain manufacturing facility in Bredbury. The sub-lease will save the Group approximately £0.7m of cash each year when the rental incentive period ends in April 2017. There will be a small cash benefit in the current financial year of just over £0.1m in respect of other occupancy costs.
The Bredbury facility ceased all manufacturing activities in March 2014 and is held under a long term lease that expires in 2030. The sub-lease is five years in duration with tenant options to break after three years and to extend for a further five years. The overall terms of the sub-lease are consistent with the assumptions underlying the onerous lease provision established in March 2014 and hence, in addition to the cash flow benefit noted above, no change to the provision is required at this time.
European Distribution Centre Employee Consultation Process
As part of ongoing initiatives to lower our breakeven point, we have now commenced formal discussions with our employees on the future of our loss making European Distribution Centre which is based near Lille in France. These discussions could result in the cessation of distribution activities in Lille which currently employ eight people. Our sales operations in France would be largely unaffected by any outcome of the consultation process.
Robert Purcell, Chief Executive of Renold plc, said:
"We regret the need to consider further reductions in our staffing levels and we are working with employees to limit the impact of these changes. We do, however, remain committed to the continuing delivery of STEP 2020 and the Group's long term strategic goals. The sub-let of the Bredbury facility, and the consultation process announced today, are in line with achieving those goals."
1 September 2016
ENQUIRIES:
Renold plc | 0161 498 4500 |
Robert Purcell, Chief Executive |
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Brian Tenner, 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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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