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Trading statements

Renold sees adj. op. profit up on views for GBP13.5m

14 April 2016 09:15

Renold said that as a result of slightly better than expected sales and ongoing cost reductions, its FY adjusted operating profit will be ahead of current market expectations of GBP13.5m.

Directors also expected the underlying adjusted return on sales would be maintained at 8.6%, the same level as the prior year.

"The benefit to Adjusted Earnings Per Share will be further enhanced by savings in financing costs and the estimated tax rate applicable in the year," the company said.

"Our Interim Results and February 2016 Trading Statement noted a high level of volatility in sales and orders. This volatility continued until the end of the year although its adverse impact moderated slightly.

"Underlying sales for the full year are therefore expected to be around 1% better than forecast in our February Trading Statement (being approximately 9% lower than the prior year).

"The Chain division was the driver of the improvement in underlying sales, in particular Europe and the Americas, and is expected to finish the year down approximately 7% (previous forecast 8% down).

"Self-help measures continue to be delivered with a further reduction in our break-even point. Once again the Chain division was the key driver and its adjusted operating profit and return on sales will exceed the prior year.

"Integration of the newly acquired Aventics Tooth Chain business continues to proceed smoothly with some synergies already being delivered in the fourth quarter.

"Net debt at the year end, including the impact of the acquisition, was also slightly better than market expectations and resulted in a leverage ratio4 of around 1.20x. This remains comfortably within our covenant limit of 2.5x."

At 9:15am: (LON:RNO) Renold PLC share price was +4.5p at 39.5p

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