Renold moves to profit as sales recover

23rd Nov 2010 07:43

A combination of a recovery in sales and cost-cutting helped industrial chain-maker Renold move into profit in the half year to September 30. The company posted a pre-tax profit of £400,000, against a loss of £8.8m over the same period the previous year on revenues that jumped to £92.9m from £75.5m.Renold said it had seen a 'significant recovery in all geographies' in its chain division, which accounts for more than three quarters of revenues. It also benefited from actions taken to reduce costs and 'resize the manufacturing footprint' of the business. The cost-cutting continues. Renold said it has begun discussions on the future of its Seclin facility in France that could result in the cessation of activities there. Chief executive Robert Davies told ShareCast that the manufacturing operations at the facility would be moved to the UK.He said that the company has good visibility over the next three months, though things are less clear thereafter. In Europe, Germany and France are strong drivers of growth and appear well placed to stay strong, while the US is more uncertain, he said.Finance director Brian Tenner said that the company still has some way to go in returning to its position ahead of the economic crisis, but that strong momentum continues. In the chain division, the order intake is 37% higher than at the same point last year. 'The business is now enjoying the combined benefits of previous work to reduce the cost base and strong revenue growth in the first half,' said chairman Matthew Peacock. 'Order books are being replenished and the outlook for second half sales continues the positive trend.'