Renold sales significantly impacted by the Covid-19 pandemic
Summary
Renold published a trading update 16 October 2020 sales were significantly impacted by the Covid-19 pandemic with sales revenue down 17% on the prior year, Renold PLC is one of the world leading in the of industrial chains manufactures it […]
Renold published a trading update 16 October 2020 sales were significantly impacted by the Covid-19 pandemic with sales revenue down 17% on the prior year, Renold PLC is one of the world leading in the of industrial chains manufactures it also manufactures a range of torque transmission products, round 80% of its annual sales come from it chain division
They look to be benefiting from the transfer of the Chinese factory to a new purpose-built facility in Jintan (built during 2019) and the purchase of their joint venture partner’s remaining 25% share of an Indian chain business. Combined with temporary pay reductions for indirect employees (including board members), suspension of discretionary spending, these have enabled the group to achieve a positive operating margin for the period and a significant reduction in net debt to £26.4m (down from of £36.6m).
The impact of global shutdowns and lower levels of demand has effected a number of the Renold’s markets. Along with destocking at its distributors, which make up over 40% of its sales, order intake in the period was reduced 21% year on year to £76m. They have indicated that trends through the period end suggest that order intake should continue to slowly improve, but to still expect levels to be below the prior year in the near term.
Renold is one of a small number of global industrial chain brands with a wide and significant geographic, customer and market segment spread. Within the last few years. it has been focusing on cost control, operational efficiency, productivity, and fixing pension related issues. When the market recovers – they should be in a great position to increase sales which have sat near £195 Million for a number of years.