Renold plc
Interim results for the half year ended 30 September 2022
(“Renold”, the “Company” or, together with its subsidiaries, the “Group”)
Strong performance, strategic chain acquisition and significant increase in earnings
Renold (AIM: RNO), a leading international supplier of industrial chains and related power transmission products, announces its interim results for the six month period ended 30 September 2022.
| Financial summary | Half year ended | |||
| £m | 30 September 2022 | Restated1 30 September 2021 | Change % | Change % (Constant currency) |
| Revenue | 116.3 | 95.3 | +22.0% | +14.3% |
| Adjusted operating profit2 | 9.6 | 7.2 | +33.3% | +20.8% |
| Return on sales3 | 8.3% | 7.5% | +80bps | +50bps |
| Adjusted profit before tax3 | 7.3 | 5.2 | +40.4% | |
| Net debt4 | 34.0 | 13.9 | ||
| Adjusted earnings per share | 2.7p | 1.9p | +42.1% | |
| Additional statutory measures | ||||
| Operating profit | 8.8 | 8.7 | +1.1% | |
| Profit before tax | 6.5 | 6.7 | (3.0)% | |
| Basic earnings per share | 2.3p | 2.6p | (11.5)% | |
Financial highlights
· Revenue up 22.0% (14.3% at constant exchange rates) to £116.3m driven by strong growth in Chain (2021: £95.3m)
· Adjusted operating profit up 33.3% (20.8% at constant exchange rates) to £9.6m (2021: £7.2m)
· Return on sales increased by 80bps, (50bps at constant exchange rates) to 8.3% (2021: 7.5%). Price increases offset input cost and supply chain challenges
· Net debt as at 30 September 2022 £34.0m (1.2x rolling 12 month EBITDA), higher primarily due to €20.0m initial cash consideration for the acquisition of Industrias YUK, S.A.
· Adjusted EPS up 42.1% to 2.7p (2021: 1.9p)
· IAS 19 pension deficit reduced by 29.6% to £61.3m (31 March 2022: £87.1m)
Business highlights
· Strong first half performance as markets continued to recover, despite cost inflation, economic uncertainty and global supply chain disruption
· Group order intake in the period £121.3m, up 18.9%, excluding prior year long term military contract (11.0% at constant exchange rates)
· Order book at 30 September 2022 £99.0m, continues at record high (30 September 2021: £72.1m)
· Acquisition of Industrias YUK, S.A. (“YUK”) for €24m, increases the Group’s access to the Iberian Chain and wider European CVC markets. The integration process is well progressed and the business is performing ahead of expectations
· Good progress on capital investment, productivity improvements and cost reduction programmes, accelerating the integration of Group-wide supply chain and increasing capabilities
1 See Note 12 for details of the prior period restatements.
2 See below for reconciliation of actual rate, constant exchange rate and adjusted figures.
3 See Note 11 for definitions of adjusted measures and the differences to statutory measures.
4 See Note 8 for a reconciliation of net debt which excludes lease liabilities.
Robert Purcell, Chief Executive of Renold plc, said:
” 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. 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.“
Reconciliation of reported, constant exchange rate and adjusted results
| Revenue | Operating profit | Earnings per share | |||||
| Restated1 | Restated1 | ||||||
| H12022/23£m | H12021/22£m | H12022/23£m | H12021/22£m | H12022/23pence | H12021/22pence | ||
| Statutory at actual exchange rates | 116.3 | 95.3 | 8.8 | 8.7 | 2.3 | 2.6 | |
| Adjust for non-recurring items: | |||||||
| US PPP loan forgiveness | – | – | – | (1.7) | |||
| Dilapidation costs for closed sites | – | – | – | 0.2 | |||
| Acquisition costs | – | – | 0.6 | – | |||
| Amortisation of acquired intangible assets | – | – | 0.2 | – | |||
| Adjusted at actual exchange rates | 116.3 | 95.3 | 9.6 | 7.2 | 2.7 | 1.9 | |
| Exchange impact | (7.4) | – | (0.9) | – | |||
| Adjusted at constant exchange rates | 108.9 | 95.3 | 8.7 | 7.2 | |||
1 See Note 12 for details of the prior period restatements
Investor Presentation
The Company will conduct a live presentation and Q&A session for investors at 5:30 pm GMT today, 16 November 2022. 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:
There will be the opportunity for participants to ask questions at the end of the presentation. Questions can also be emailed to renold@investor-focus.co.uk ahead of the presentation.
ENQUIRIES:
| Renold plc | IFC Advisory Limited |
| Robert Purcell, Chief Executive | Tim Metcalfe |
| Jim Haughey, Group Finance Director | Graham Herring |
| renold@investor-focus.co.uk | |
| 0161 498 4500 | 020 3934 6630 |
| Nominated Adviser and Joint Broker | Joint Broker |
| Peel Hunt LLP | F innCap Limited |
| Mike Bell | Ed Frisby / Tim Harper (Corporate Finance) |
| Ed Allsopp | Andrew Burdis / Harriet Ward (ECM) |
| 020 7418 8900 | 020 7220 0500 |
Cautionary statement regarding forward-looking statements
Some of the information in this document may contain projections or other forward-looking statements regarding future events or the future financial performance of Renold plc and its subsidiaries. You can identify forward-looking statements by terms such as “expect”, “believe”, “anticipate”, “estimate”, “intend”, “will”, “could”, “may” or “might”, the negative of such terms or other similar expressions. Renold plc (the Company) wishes to caution you that these statements are only predictions and that actual events or results may differ materially. The Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Group, including among others, general economic conditions, the competitive environment as well as many other risks specifically related to the Group and its operations. Past performance of the Group cannot be relied on as a guide to future performance.
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, distributors and end-users. The Company has a reputation for quality that is recognised worldwide. Its products are used in a wide variety of industries including manufacturing, transportation, energy, metals and mining.
Further information about Renold can be found at: www.renold.com