Renold earnings rise as net debt expands
By Josh White
Date: Wednesday 16 Nov 2022
(Sharecast News) - Industrial chain and power transmission product supplier Renold reported a 22% improvement in first-half revenue on Wednesday, or 14.3% at constant exchange rates, to £116.3m, driven by strong growth in its chain operations.
The AIM-traded firm said its adjusted operating profit was ahead 33.3% year-on-year for the six months ended 30 September, or 20.8% at constant currency, to £9.6m.
Its return on sales increased by 80 basis points to 8.3%, as price increases offset input cost and supply chain challenges.
Net debt at period end on 30 September totalled £34m, or 1.2x rolling 12-month EBITDA, which was up from £13.9m a year earlier due to the €20m (£17.51m) initial cash consideration for the acquisition of Industrias YUK.
Adjusted earnings per share were up 42.1% at 2.7p.
Renold also confirmed that its IAS 19 pension deficit reduced by 29.6% over the six months, to £61.3m.
"The strong trading momentum experienced in the second half of the last financial year has continued in the first half, with the group continuing to successfully manage significant inflation and supply chain disruption, resulting in growing sales and record orders," said chief executive officer Robert Purcell.
"Whilst we are mindful that global markets continue to be uncertain, with ongoing labour and energy cost inflation and supply chain challenges, the group's trading momentum continues to be positive.
"The group has record order books and the acquisition of YUK provides opportunities for synergies and further growth."
At 1318 GMT, shares in Renold were up 4.28% at 23.98p.
Reporting by Josh White for Sharecast.com.
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