Renold plc, the Manchester-based industrial chain and power transmission firm, said on Tuesday its underlying revenue grew 6.1% to £202.4 million in the year to March 31, 2019, and profit before tax rose to £11.2 million from £1.4 million the year before.

Renold CEO Robert Purcell said the firm now sees significant opportunity to build on the platform it has established “both through ongoing organic growth initiatives and through an effective acquisition strategy, the execution of which will be simplified by the move to AIM.”

Purcell added: “The chain division has delivered encouraging organic growth as well as improved operational efficiency, increasing adjusted operating profit to record levels.

“The continued successful execution of the strategic plan has enabled margin improvement to be delivered in spite of labour cost inflation and the significant relocation of our Chinese factory, which will take time to ramp up to targeted output and productivity levels.

“We are mindful of these factors entering the new year, but remain confident that our strategic initiatives provide us with a clear pathway to further future progress.

“Whilst not immediately visible in the trading performance in the year to March 2019, the operational improvements in Torque Transmission, along with additional revenue from the Couplings long-term contract in the year ahead provide a platform for further organic growth and margin improvement.

“Our strategy has delivered strong results and is the optimum approach to creating and maintaining a higher quality, higher margin business.

“Robust order books provide the basis for continued improvement in the new financial year …

“Delivering sustainable growth through these initiatives, when combined with the benefits of further operational efficiency, continues to support the expectation that mid-teens operating margins can be delivered over time.”