Renold PLC – Half-year Report
Renold, a leading international supplier of industrial chains and related power transmission products, today announces its unaudited interim results for the half year ended 30 September 2019 (the ‘period’).
Financial highlights
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Half year ended |
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30 Sept 2019 |
30 Sept 2018 (restated1) |
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£m |
£m |
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Underlying adjusted interim results2 (from continuing operations) |
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Underlying revenue |
98.2 |
100.8 |
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Underlying adjusted operating profit |
7.7 |
7.5 |
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Underlying adjusted operating margin |
7.8% |
7.4% |
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Adjusted earnings per share |
1.5p |
1.6p |
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Reported interim results (from continuing operations) |
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Revenue |
98.2 |
98.2 |
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Operating profit |
6.3 |
5.9 |
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Profit before tax |
3.5 |
3.6 |
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Basic earnings/(losses) per share |
1.0p |
0.9p |
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1 See Note 14 for details of the restatement
2 See overleaf for reconciliation of reported, underlying and adjusted figures
· Underlying revenue from continuing operations down 2.6% to £98.2m; reported revenue from continuing operations unchanged
· Underlying adjusted operating profit from continuing operations £7.7m (2018: £7.5m); adjusted operating margin 7.8% (2018: 7.4%) reflecting further progress in delivery of strategic initiatives
· Net debt £34.2m (31 March 2019: £30.3m); net debt to adjusted EBITDA 1.4x (unchanged from prior year)
· Adjusted EPS of 1.5p (2018: 1.6p) after deduction of pension administration costs and IAS 19R finance costs
Trading and operational highlights
· The impact of tougher market conditions on revenue is being offset by improved efficiency from capital investment and operational improvement
· The new factory in China continues to make progress with improvements in efficiency and reduced headcount and should see accelerating performance in the second half
· Disposal of the loss-making, non-strategic South African Torque Transmission business unit to management for nominal consideration, securing future routes to market for product manufactured elsewhere in the Group
· Completed a £1.7m share buy-back of the 25% joint venture partner’s share of the Indian chain business in November, which becomes a wholly owned subsidiary operating in a growing market with significant potential
Robert Purcell, Chief Executive of Renold plc, said:
“A more challenging economic backdrop impacted on revenue and order intake in the first half of the year. Despite this, ongoing actions to improve the business have sustained profits and improved margins. In addition, we have seen further strategic evolution in the Group’s manufacturing footprint with the exit from the non-core South African Torque Transmission business, the purchase of the minority stake in the Indian Chain business and the ongoing successful ramp-up of the Chinese facility.
Assuming no further deterioration in trading conditions, these measures will continue to deliver benefits in the second half and beyond, providing resilience through uncertain markets. As market conditions improve and we return to revenue growth, the operational platform being established will enable us to make further progress in growing margins and returns.”
Reconciliation of reported, underlying and adjusted results
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Revenue |
Operating Profit |
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H1 2019/20 £m |
H1 2018/19 (restated1) £m |
H1 2019/20 £m |
H1 2018/19 (restated1) £m |
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Previously reported |
|
99.7 |
|
5.8 |
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Exchange impact |
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2.6 |
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0.1 |
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Discontinued operations2 |
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(1.5) |
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0.1 |
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Continuing underlying |
98.2 |
100.8 |
6.3 |
6.0 |
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Restructuring costs |
– |
– |
0.9 |
1.0 |
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Amortisation of acquired intangible assets |
– |
– |
0.5 |
0.5 |
Continuing underlying adjusted |
98.2 |
100.8 |
7.7 |
7.5 |
1 See Note 14 for details of the restatement
2 Reported revenue and operating profit for H1 2019/20 are presented on a continuing basis with no adjustment required for discontinued operations. Revenue and adjusted operating losses for discontinued operations in H1 2019/20 of £0.8m and £0.3m loss respectively are already deducted in arriving at reported results