Shares of Manchester industrial chain and power transmission firm Renold plc rose about 32% on Thursday after it published a trading update covering the year ended March 31, 2022, saying it expects underlying trading profit for FY22 to be “materially ahead of the previous upwardly revised expectations.”
Reporting a record order book, Renold said the strong momentum in order intake and turnover experienced in the first half of the year continued “delivering revenue for the full year of £195.0m, a year-on-year increase of 18.0% on a reported basis, and 21.7% at constant exchange rates.”
Renold said: “Group order intake during FY22 was £223.7m.
“This represents a year-on-year increase of 31.6% on a reported basis and 35.6% at constant exchange rates.
“Excluding the recently announced £11.0m long term military contract, order intake for the period increased by 25.2% or 29.2% at constant exchange rates.
“The current order book of £84.1m is a record high for the group (31 March 2021: £53.6m).
“As a result of the stronger sales, benefits of cost reduction and efficiency programmes, and the successful implementation of price increases running ahead of raw material and energy cost increases, the board is now expecting underlying trading profit for FY22 to be materially ahead of the previous upwardly revised expectations.
“In addition, there are a number of material one off, non-recurring items which will, subject to audit, contribute to an increase in full year statutory operating profits, of c.£4.0m.
“This includes gains from new lease arrangements on sub-let properties and US PPP Covid loan relief, of which £1.2m was previously recognised and disclosed in the half year results.
“Careful management of working capital resulted in net debt at the end of the FY22 of £13.8m (30 September 2021: £13.9m), a reduction of £4.6m during the year.
“The group has strengthened its financial position significantly over the last two years, providing funding capacity to support its strategic growth objectives.
“These include both further capability investments as well as value-accretive acquisitions, with a developing pipeline of opportunities.”