Wythenshawe chain maker Renold plc achieves revenue growth ‘for first time in years’

Industrial chain and power transmission products supplier Renold plc is embarking on the next stage of a multi-year turnaround plan after achieving revenue growth for the ‘first time in a number of years’, its chief exec said today (May 29).

The 12 months to March 31 2018 saw the Wythenshawe-headquartered company generate an underlying revenue of £191.6m, up from £184.6m.

Statutory pre-tax profit for the period was down, falling from £6.7m in 2017 to £1.4m in Renold’s latest results.

Chief executive Robert Purcell explained: “Through a combination of strategic action and improving market conditions, we have delivered organic revenue growth for the first time in a number of years. Order intake continues to remain strong with order books meaningfully ahead year-on-year.

“During the year ended 31 March 2018, raw material costs increased significantly and we were too slow to respond, resulting in an ongoing lag in passing these increased costs on to customers.”

He continued: “This, combined with factory disruption, impacted profitability in the first half. Action to pass increased costs to customers through sales price increases has been implemented and, with the factory disruption behind us, profitability increased in the second half of the year.”

In the last year, Renold has worked to reposition itself for international growth through its Step 2020 Strategic Plan.

This included closing sub-scale manufacturing facilities in China and New Zealand, focused on Renold’s Torque Transmission and Chain businesses respectively. Both locations have been refocused on sales and distribution.

The latter part of the 2017/18 year also saw the firm close its Singapore sales office, transferring all customers to its sales office in Kuala Lumpur.

Renold is also building a manufacturing facility in Jintan, China, with construction work now ‘well advanced’. Manufacturing operations will transfer from Renold’s site in Hangzhou to Jintan over the coming months.

As part of the STEP 2020 Strategic Plan, Renold will now look to boost growth through selective acquisitions.