Renold plc
Final results for the year ended 31 March 2024
(“Renold”, the “Company” or, together with its subsidiaries, the “Group”)
Record trading performance, significant earnings growth and strong cash generation, dividend resumed
Renold (AIM: RNO), a leading international supplier of industrial chains and related power transmission products, is pleased to announce its audited results for the year ended 31 March 2024 (“FY24”).
Financial highlights
| £m | 2024 | 2023 | Change | Change (constant currency)1 |
| Revenue | 241.4 | 247.1 | -2.3% | +0.9% |
| Adjusted operating profit2 | 29.7 | 24.2 | +22.7% | +27.3% |
| Return on sales2 | 12.3% | 9.8% | +250bps | +260bps |
| Adjusted profit before tax2 | 22.1 | 18.6 | +18.8% | |
| Net debt3 | 24.9 | 29.8 | ||
| Adjusted earnings per share2 | 7.8p | 6.5p | +20.0% | |
| Ordinary dividend per share | 0.5p | – | ||
| Additional statutory measures | ||||
| Operating profit | 30.5 | 22.9 | +33.2% | |
| Profit before tax | 22.9 | 17.3 | +32.4% | |
| Basic earnings per share | 8.3p | 5.7p | +45.6% |
| • | Revenue of £241.4m, 2.3% lower year on year due to currency headwinds, (up 0.9% at constant exchange rates) (FY23: £247.1m) |
| • | Adjusted operating profit of £29.7m (FY23: £24.2m), up 22.7% as a result of significantly increased margins with return on sales of 12.3%, up 250bps |
| • | Reported operating profit up 33.2% to £30.5m (FY23: £22.9m) |
| • | Net debt as at 31 March 2024 of £24.9m, a reduction of £4.9m, after acquisition payments of £5.2m, EBT purchases of £4.5m and deferred capital expenditure of £2.2m |
| • | Year end net debt of 0.6x adjusted EBITDA (31 March 2023: 0.8x) |
| • | Adjusted EPS up 20.0% to 7.8p (FY23: 6.5p); Basic EPS 8.3p (FY23: 5.7p) |
| • | Resumption of dividends, with a full year dividend proposed of 0.5p per share; the first dividend announced since 2005 |
Business highlights
| • | The Group delivered record results, with both Chain and TT divisions performing strongly, notwithstanding the difficult inflationary, trading and macroeconomic backdrop |
| • | Order intake of £227.5m (FY23: £257.5m), impacted by a shortening in duration of the order book in H1, reflecting improved supply chain conditions. H2 order intake up 7.5% over H1 (8.4% at constant exchange rates) |
| • | Closing order book consistent with the half year position at £83.6m |
| • | Acquisition of Davidson Chain in September 2023, for AU$6.0m, increases the Group’s access to the Australian conveyor and adapted transmission chain markets. The integration process is progressing to plan |
| • | Increased capital investment during the year has improved the efficiency, productivity and capability of manufacturing locations, reflected in the strong market progression |
1 See below for reconciliation of actual rate, constant exchange rate and adjusted figures
2 See Note 19 for definitions of adjusted measures and the differences to statutory measures
3 See Note 17 for a reconciliation of net debt which excludes lease liabilities
Robert Purcell, Chief Executive, commented:
“I am pleased that the Group continued to perform strongly throughout the year reflecting the hard work, strategically, commercially and operationally that has been undertaken over recent years by our employees across the world. The business is now at an inflection point where we are starting to see the compounding impact of the many recent exciting initiatives as they come to fruition. We have a very clear strategy and are executing it diligently. Our continuous improvement initiatives are building an increasingly efficient, productive and resilient business and are providing an ever improving platform to support our commercial initiatives.”
Meeting for analysts and institutional investors
A virtual meeting for institutional investors and analysts will be held today at 9.30am BST. If you wish to attend this meeting please contact renold@investor-focus.co.uk or call Tim Metcalfe of IFC Advisory Limited (020 3934 6632) before 8.45am to be provided with access details.
Retail investor presentation and Q&A session
Renold management will be hosting an online presentation and Q&A session at 5.30pm BST today, 17 July 2024. This session is open to all existing and prospective shareholders. Those who wish to attend should register via the following link and they will be provided with access details:
https://us02web.zoom.us/webinar/register/WN_9KfZYYnqRS6RgoVKiXvybQ
Participants will have the opportunity to submit questions during the session, but questions are welcomed in advance and may be submitted to: renold@investor-focus.co.uk.
Reconciliation of reported and adjusted results
| Revenue | Operating profit | Earnings per share | ||||
| 2024£m | 2023£m | 2024£m | 2023£m | 2024pence | 2023pence | |
| Statutory reported | 241.4 | 247.1 | 30.5 | 22.9 | 8.3 | 5.7 |
| Amortisation of acquired intangible assets | – | – | 1.0 | 0.7 | 0.5 | 0.3 |
| Acquisition costs | – | – | 0.5 | 0.6 | 0.2 | 0.3 |
| – Deferred tax triggered on acquisition | – | – | – | – | (0.5) | – |
| Assignment of lease and cost of closed sites | – | – | (2.3) | – | (1.1) | – |
| – Tax on assignment of lease and cost of closed sites | – | – | – | – | 0.4 | – |
| Tax adjustments relating to prior year | – | – | – | – | – | 0.2 |
| Adjusted | 241.4 | 247.1 | 29.7 | 24.2 | 7.8 | 6.5 |
| Exchange impact | 7.9 | – | 1.1 | – | 0.1 | – |
| Adjusted at constant exchange rates | 249.3 | 247.1 | 30.8 | 24.2 | 7.9 | 6.5 |