Renold plc (LON:RNO) a leading international supplier of industrial chains and related power transmission products, has issued a trading update covering the 10 month period ended 31 January 2023.
The Group has traded strongly since announcing its interim results in November 2022, with order intake running ahead of sales. Supported by the positive market outlook, the Board now anticipates that underlying operating profit for the full year will be above current market forecasts.
Turnover for the 10 months to 31 January 2023 totalled £199.0m (10 months to 31 January 2022: £158.7m), 25.4% higher than the prior year comparator on a reported basis, and 17.3% at constant exchange rates.
Group order intake for the 10 month period was £216.5m, representing a year-on-year increase of 19.2% on a reported basis, and 11.6% at constant exchange rates. Excluding the impact of long term military contracts, order intake increased by 21.8% or 13.7% at constant exchange rates, with North America being particularly strong, although ordering patterns have started to normalise in Europe and India from the elevated levels experienced earlier in the financial year. The current order book of £104.1m is a further record high for the Group (30 September 2022: £99.0m) providing good visibility beyond the financial year end.
The integration of Industrias YUK S.A. continues in line with management’s expectations at the time of the acquisition, with early progress made in realising identified cost synergies. Net debt at the financial year end is still expected to be comfortably below 1.5x EBITDA.
Given the continued sales growth, a strong orderbook, benefits of the cost reduction and efficiency programmes, and the successful recovery of cost inflation on raw material and energy, the Board is confident the current trading momentum will deliver revenues and underlying operating profit for the full year in excess of market expectations.