Renold plc (LON:RNO), a leading international supplier of industrial chains and related power transmission products, has announced its interim results for the six month period ended 30 September 2021.
Financial highlights
| Half year ended 30 September 2021 £m | Half year ended 30 September 2020 £m | Increase / (decrease) % | |
| Adjusted results at constant exchange rates1 | |||
| Revenue at constant exchange rates | 95.3 | 78.1 | 22% |
| Adjusted operating profit at constant exchange rates | 8.2 | 5.5 | 49% |
| Return on sales2 at constant exchange rates | 8.6% | 7.0% | |
| Adjusted earnings per share | 2.3p | 1.1p | 109% |
| Net debt3 | 13.9 | 26.4 | (47%) |
| Results at actual exchange rates | |||
| Revenue | 95.3 | 81.5 | 17% |
| Adjusted operating profit | 8.2 | 5.8 | 41% |
| Return on sales2 | 8.6% | 7.1% | |
| Operating profit | 8.2 | 5.3 | 55% |
| Profit before tax | 6.2 | 2.8 | 121% |
| Basic earnings per share | 2.3p | 0.9p | 156% |
· Revenue up 17% to £95.3m (22% at constant exchange rates).
· Adjusted operating profit up 41% (49% at constant exchange rates) to £8.2m (2020: £5.8m).
· Excluding one-off items adjusted operating profit of £7.0m4 up 21% and return on sales of 7.4% up 30bps.
· Net debt £13.9m, £4.5m reduction in the period; ratio to adjusted EBITDA 0.6x (31 March 2021: 0.9x).
· Adjusted EPS 2.3p (2020: 1.1p); Excluding one-off items Adjusted EPS 2.0p
Business highlights
· The Group’s markets recovered strongly during the first half, as activity levels rebounded from Covid impact, returning to 96% of pre-pandemic level.
· Strong cash generation, with continuing focus on working capital and cost control, but allowing for inventory increases due to lengthened supply chains and a gradual restoration of capital expenditure.
· Group order intake in the period £113.0m, up 48.8% YoY as reported (54.9% at constant exchange rates).
· Orderbook at 30 September 2021, £72.1m, is a record high for the Group (30 September 2020: £46.5m).
· Completed bolt-on acquisition of the conveyor chain business of Brooks Ltd, which is performing ahead of expectations.
1 See below for reconciliation of actual rate, constant exchange rate and adjusted figures
2 Adjusted operating profit divided by revenue
3 See Note 9 for a reconciliation of net debt which excludes lease liabilities
4 Non-recurring items include £1.7m of US Payroll Protection Program (PPP) loan forgiveness offset by £0.5m of dilapidation charges relating to closed sites
Reconciliation of reported, constant exchange rate and adjusted results
| Revenue H12021/22 £m | Revenue H12020/21 £m | Operating profit H12021/22 £m | Operating profit H12020/21 £m | Earnings per share H12021/22 pence | Earnings per share H12020/21 pence | |
| Reported at actual exchange rates | 95.3 | 81.5 | 8.2 | 5.3 | 2.3 | 0.9 |
| Amortisation of acquired intangible assets | – | – | – | 0.5 | – | 0.2 |
| Adjusted | 95.3 | 81.5 | 8.2 | 5.8 | 2.3 | 1.1 |
| Exchange impact | – | (3.4) | – | (0.3) | – | – |
| Adjusted at constant exchange rates | 95.3 | 78.1 | 8.2 | 5.5 | 2.3 | 1.1 |
Robert Purcell, Chief Executive of Renold plc, said:
“The strong trading momentum experienced in the fourth quarter of the last financial year has continued into the first half, resulting in growth of both revenues and profitability. Despite the widely reported global supply chain and inflationary pressures that remain present, particularly with respect to materials, transport and energy costs, Renold continues to benefit from geographic, customer and market sector diversity. With a record order book at the period end, coupled with the strategic initiatives previously implemented, we approach the second half with confidence, but cognisant of the very volatile and inflationary world we operate in.”
