Renold PLC – RNO – Half-year Report

Renold PLC – RNO – Half-year Report

Financial highlights

Half year ended

30 September

2020

30 September

2019

£m

£m

Adjusted results at constant exchange rates[1]

Revenue at constant exchange rates

81.5

97.4

Adjusted operating profit at constant exchange rates

5.8

7.7

Adjusted operating profit margin at constant exchange rates

7.1%

7.9%

Adjusted earnings per share

1.1p

1.5p

Net debt

26.4

34.2

Reported results

Revenue

81.5

98.2

Operating profit

5.3

6.3

Profit before tax

2.8

3.5

Basic earnings per share

0.9p

1.0p

·     

Revenue from continuing operations down 17.0% to £81.5m, a resilient performance despite the impact of the Covid-19 pandemic

·     

Adjusted operating profit from continuing operations at constant exchange rates of £5.8m (2019: £7.7m); adjusted operating margin 7.1% (2019: 7.9%), reflecting actions taken in both the current and prior years to improve the flexibility of the cost base

·     

Strong cash generation resulting in a £10.2m reduction in net debt to £26.4m (31 March 2020: £36.6m); with net debt to adjusted EBITDA ratio of 1.2x (31 March 2020: 1.5x)

·     

Adjusted EPS of 1.1p (2019: 1.5p)

 

Trading and operational highlights

·     

Resilient margin performance and strong cash generation, as a result of focused working capital management, completion of restructuring program and careful reduction of costs

·     

The impact of the Covid-19 pandemic on revenue is being partly mitigated by improved efficiency and productivity from recent years’ capital investments and operational improvements

·     

Order intake at the start of the period reflected customer destocking, however, trends through the period end suggest a continued modest improvement, albeit at levels below the prior year in the near term, this was most evident in India, South East Asia and to a lesser extent parts of Europe

·     

The new factory in China continues to improve on time delivery, efficiency and productivity  

Robert Purcell, Chief Executive of Renold plc, said:

Whilst the market environment continues to be challenging, the strategic actions taken in recent years, augmented by the measures taken earlier this year in response to the Covid-19 pandemic, have resulted in a more resilient business that is better placed to overcome today’s challenges.

Renold reacted quickly to the sharp decline in order intake arising from the pandemic and, as a result, delivered a robust operating margin and substantial reduction in net debt. I would like to thank all employees for their commitment and outstanding efforts in keeping our facilities open and serving our customers during this time.

The tight focus on cost and cash management in the first half has created a platform from which we can manage through short-term disruption. We are focused on ensuring Renold can respond strongly as markets recover.”

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