Renold PLC AGM Trading Update (3261L)
05 September 2023 - 4:00PM
UK Regulatory
TIDMRNO
RNS Number : 3261L
Renold PLC
05 September 2023
5 September 2023
Renold plc
("Renold", the "Company" or the "Group")
AGM Trading Update
Renold, a leading international supplier of industrial chains
and related power transmission products, is pleased to provide a
trading update covering the four months ended 31 July 2023 (the
"Period") ahead of the Company's annual general meeting being held
at 11.00 a.m. today.
The Board is pleased to report that the Group's financial
performance in the first four months of the new financial year has
been strong. Group revenue for the Period was GBP85.1m (FY23
equivalent GBP73.0m), a year-on-year increase of 16.6% at reported
rates and 18.7% at constant exchange rates. Within this, YUK S.A.
("YUK"), acquired in August 2022, contributed GBP5.4m.
Order intake for the Period was GBP74.2m, a decrease of 2.7%
(FY23 equivalent GBP76.3m), or a 1.0% decrease at constant exchange
rates. YUK contributed GBP4.9m to order intake in the Period. The
order book as at 31 July 2023 of GBP86.0m remains higher than
historic levels. However there has been a normalisation of order
intake following an improvement in global supply chains, with
improvements to delivery times, allowing customers to reduce
forward order placement as certainty of deliveries increase,
leading to a reduction and shortening of the order book. The order
book at 31 July 2023 represents a decrease of 13.6% over the record
high position at the end of the previous financial year.
On the 1 September 2023, the Group acquired the trading assets
of Davidson Chain PTY ("Davidson"), based in Melbourne, Australia,
enlarging our already strong Australian Chain business by 26%. The
Davidson acquisition demonstrates further strategic momentum,
supplementing organic growth through high quality bolt-on
acquisitions which can expand our geographic presence, grow our
product offering and strengthen our market position in key end
markets.
Net debt as at 31 July 2023 was GBP23.3m (representing 0.6x
EBITDA(1) ), a reduction of GBP6.5m (21.8%) from GBP29.8m as at 31
March 2023, reflecting the strong underlying cash generation of the
business during the Period. Net debt at the half year (period
ending 30 September 2023) is expected to increase, following the
payment of GBP1.7m of deferred consideration relating to the YUK
acquisition and the purchase consideration of GBP3.1m (AU$6.0m) for
Davidson. Additionally, the Group will bring forward the payment of
the H2 pension contribution of approximately GBP2.6m, which enables
efficiency gains in the investment portfolio .
Global markets continue to be uncertain, with ongoing labour
cost inflation and material costs remaining high when compared to
historic levels. Whilst there is a normalisation of demand in some
of the Group's end markets, the Group retains strong order books
which remain high by historical standards, despite a shortening of
lead times, reducing the overall quantum.
As a result of the continued positive trading momentum, and an
increase in activity from the recently announced Davidson
acquisition, the Board now anticipates achieving results for the
year ending 31 March 2024, higher than previously expected.
(1) Calculated as Net debt as at 31 July 2023/ Ebitda for the
preceding 12 months taken from the Group management accounts.
ENQUIRIES:
Renold plc IFC Advisory Limited
Robert Purcell, Chief Executive Tim Metcalfe
Jim Haughey, Group Finance Director Graham Herring
0161 498 4500 020 3934 6630
Nominated Adviser and Joint Joint Broker
Broker
Peel Hunt LLP FinnCap Limited
Mike Bell Ed Frisby / Tim Harper (Corporate
Finance)
Ed Allsopp Andrew Burdis / Harriet Ward
(ECM)
020 7418 8900 020 7220 0500
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
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END
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