Shares of Manchester industrial chain and power transmission firm Renold plc rose about 6% on Wednesday after it issued a trading update covering the year ended March 31, 2021, signaling a recovery — and said it completed of a small bolt-on acquisition in the UK.
Although Renold’s revenue fell to 12.7% to £165.3 million over the year, the firm said its order intake in the fourth quarter was 10.2% ahead of the equivalent prior year period.
“The recovery in both order intake and revenues has continued and trading for the year has been in line with the board’s revised expectations, as announced in the company’s trading update on 13 January 2021,” said Renold.
“Group order intake in the year fell to £170.0m, down 7.4% compared to the prior year.
“At constant exchange rates the reduction was 6.6%.
“Encouragingly, group order intake in Q4 was 10.2% ahead of the equivalent prior year period, and the order book at 31 March 2021 of £53.6m was 3.6% ahead of the prior year figure (9.3% at constant exchange rates).
“Group revenue in the year fell to £165.3m, down 12.7% compared to the prior year, as the group experienced the impact of the Covid-19 pandemic across many of the group’s key end markets, particularly in the first half.
“At constant exchange rates the reduction was 11.9%.
“Trading improved in the latter part of the year and group revenue in Q4 was behind the prior year by 8.3% (5.6% at constant exchange rates), being held back in the short term by constraints on global supply chains emerging from the pandemic.
“During the year, cash generation outperformed initial expectations, as a strong focus on cash management resulted in a c.50% reduction of net debt to £18.4m (2020: £36.6m).”
On the acquisition, Renold said: “On the 8 April 2021 Renold completed the acquisition of the conveyor chain business of Brooks Ltd in Manchester, UK, for a total consideration of £0.6m, including £0.3m of deferred consideration.
“In the current year the business is expected to generate additional sales for the group of c. £1.0m, and add c. £0.2m to group operating profit.
“The business will be integrated into the Renold UK Service centre in Manchester.”