Renold's annual revenues fall in tough market conditions

Renold, which supplies power transmission products, said underlying revenue for the full-year fell seven per cent as challenging market conditions persisted.

In a trading update ahead of its results for the year to March 31st, the group reported a drop in sales with the second half 4.0% lower than the first.

However, results in the second half were offset by action to reduce ongoing overheads which saw adjusted operating profit meet market expectations for a figure in line with the first half.

The company kept a tight rein on working capital costs during the second half, resulting in a net cash generation and a reduction in net debt.

In March, Renold agreed a new funding plan and merger of the UK defined benefit pension plans which is expected to reduce annual cash costs by £1.0m.

This year the group also wound up the pension fund surplus in South Africa. A pre-tax cash surplus of £1.3m was returned to the group last month with a further £0.1m outstanding.

"We are pleased with a good improvement in book to bill ratios in the second half versus the prior year," said Chief Executive Robert Purcell.

"However, with trading conditions expected to remain challenging, we are developing plans to lower the group's breakeven point and further improve our commercial position, and I look forward to reporting in further detail at the full year results announcement in May."

RD