Renold forecasts better-than-expected annual profits

13th Feb 2014 08:37

British engineering group Renold forecast higher-than-expected annual profits after reporting more orders and lower overheads.Renold, which makes industrial chains, gearboxes and couplings for use in equipment ranging from factory conveyor belts to theme park roller-coaster rides, said it now expected adjusted full-year operating profit to be above the upper end of current market expectations.The Manchester-based company said underlying orders in the four months to January 31st were 3.8% ahead compared to the same period a year ago, boosted by growth in its chain and torque transmission businesses.It said revenue was down 1.3% against a year ago, but that represented an improvement on the 2.2% decline in the first half of this financial year.Cost-cutting also helped, including a decision announced by the group last October to close a factory and transfer most of its production to other Renold sites.Broker Finncap said it expected to raise its 2014 profit forecast for Renold by £600,000 to £8.6m in 2014 with an £800,000 increase in 2015. It also raised its price target to 79p."We retain our 'buy' rating on this upbeat announcement," Finncap said.Shares fell 0.75p to 66p at 09:25 in London.PW