Renold plc (LON:RNO), a leading international supplier of industrial chains and related power transmission products, has announced its interim results for the six month period ended 30 September 2024.
| Financial summary | Half year ended | Change (Constant currency)1 | ||
| £m | 30 September 2024 | 30 September 2023 | Change | |
| Revenue | 123.4 | 125.3 | (1.5)% | +0.6% |
| Adjusted operating profit2 | 15.2 | 15.0 | +1.3% | +4.0% |
| Return on sales2 | 12.3% | 12.0% | +30bps | +40bps |
| Adjusted profit before tax2 | 11.3 | 11.3 | – | |
| Net debt3 | 42.2 | 28.3 | ||
| Adjusted earnings per share2 | 4.2p | 3.8p | +10.5% | |
| Additional statutory measures | ||||
| Operating profit | 13.4 | 16.2 | (17.3)% | |
| Profit before tax | 9.5 | 12.5 | (24.0)% | |
| Basic earnings per share | 3.3p | 4.4p | (25.0)% | |
Financial highlights
| · | Revenue at £123.4m increased 0.6% at constant exchange rates, although down 1.5% at reported rates due to currency headwinds. | |
| · | Chain and TT divisions both reported an increase in revenue, at constant exchange rates. | |
| · | Adjusted operating profit at £15.2m (2023: £15.0m) up 4.0% at constant exchange rates, and 1.3% at reported exchange rates. | |
| · | Further margin expansion; return on sales increased 30bps, (40bps at constant exchange rates) to 12.3% (2023: 12.0%). | |
| · | Net debt at 30 September 2024 £42.2m (31 March 2024: £24.9m), after acquisition costs to date of £23.3m. Net debt was 1.0x adjusted EBITDA (2023: 0.7x). | |
| · | Adjusted EPS up 10.5% to 4.2p (2023: 3.8p). | |
| · | IAS 19 retirement benefit deficit reduced 8.6% to £52.2m (31 March 2024: £57.1m). |
Business highlights
| · | Acquisition of Mac Chain based in British Columbia, Canada and the Pacific Northwest of the USA for a total consideration, incl. deferred amounts, of £23.8m, increasing the Group’s access to the North American conveyor and forestry chain markets. The integration process is progressing well and the business is performing in line with expectations. The Americas now represent c. 47% of Group revenue on a pro-forma basis. | |
| · | Further progress made to improve productivity, reduce costs and in capital investment, accelerating the integration of Group-wide supply chains and increasing operational capabilities. | |
| · | H1 order intake up 11.5% compared to prior year, including military contract win of £10.6m for the Royal Canadian Navy. | |
| · | Order book at 30 September 2024 of £80.8m, remains strong compared to historic levels (30 September 2023: £83.6m). | |
| · | Post period end, Renold’s manufacturing facility in Valencia was significantly impacted by the well-publicised flooding in the region and although the financial impact is still being assessed the net cost to the Group is expected to be c. £1m. | |
| · | Board remains confident of delivering underlying full year results in line with market expectations4 |
1 See below for reconciliation of actual rate, constant exchange rate and adjusted figures.
2 See Note 12 for definitions of adjusted measures and the differences to statutory measures.
3 See Note 8 for a reconciliation of net debt which excludes lease liabilities.
4 Company compiled analyst consensus for FY25 is for revenue of £252.5m with a range of £252.4m to £252.6m and operating profit of £30.4m with a range of £29.5m to £31.2m.
Robert Purcell, Chief Executive, said:
“Renold continue to deliver improving results in what have been variable and generally difficult markets. The Renold business with its diversity of customers, geography, markets and applications has shown its strength in a period of considerable economic upheaval. Our STEP2 Strategy is being consistently executed and is delivering good results.
“In the first half we have made further progress with our inorganic growth strategy through the acquisition of Mac Chain, another excellent addition to the Group and one that enhances our market position in a number of sectors and geographies. Our strong cash generation means that we can accelerate the cadence of value enhancing bolt-on acquisitions.
“The floods in Valencia were devasting for the local communities and our factory was directly impacted. Our colleagues are all safe, and efforts are underway to restore business as usual, and they are doing a fantastic job despite operating in a very difficult environment. Whilst there will be a short term operational impact, we are, and will, cope with the challenges.
“Whilst we see no signs of the global economic conditions significantly improving in the second half, the resilience of the Group gives the Board confidence in delivering underlying full year results in line with market expectations4.”
Reconciliation of reported, constant exchange rate and adjusted results
| Revenue | Operating profit | Earnings per share | ||||
| H12024/25£m | H12023/24£m | H12024/25£m | H12023/24£m | H12024/25pence | H12023/24pence | |
| Statutory at actual exchange rates | 123.4 | 125.3 | 13.4 | 16.2 | 3.3 | 4.4 |
| Adjust for non-recurring items: | ||||||
| Assignment of lease of closed site | – | – | – | (2.2) | ||
| Acquisition costs | – | – | 1.2 | 0.5 | ||
| Amortisation of acquired intangible assets | – | – | 0.6 | 0.5 | ||
| Adjusted at actual exchange rates | 123.4 | 125.3 | 15.2 | 15.0 | 4.2 | 3.8 |
| Exchange impact | 2.7 | – | 0.4 | – | ||
| Adjusted at constant exchange rates | 126.1 | 125.3 | 15.6 | 15.0 | ||
Investor Presentation
The Company will conduct a live presentation and Q&A session for investors on the same day as the release of the interim results, 20 November 2024, at 5:30 pm GMT. The presentation is open to all existing and potential shareholders. Those wishing to attend should register via the following link and they will be provided with log in details:
https://us02web.zoom.us/webinar/register/WN_zYZhNwhNQ3yc5j-SL4EDYA
There will be the opportunity for participants to ask questions at the end of the presentation. Questions can also be emailed to [email protected] ahead of the presentation.
