an improvement in overseas markets increased orders at Renold, the chain, gear and machine tool engineering group, in the third quarter of the year to 1 April.
Chief executive David Cotterill said Renold’s prospects had started to recover after nearly two years of declining orders. `We had a strong final quarter last year, but orders started to creep ahead of sales from November onwards. We actually made a lot of money in February and March,’ he said.
UK and European markets continued to be difficult, but improved results came from further afield. `The Far East and North America were the main driving forces,’ he added.
The recovery came too late to lift Renold’s pre-tax profits, which fell 23% to £9.6m on sales up slightly to £174.2m.
In the power transmission division, which includes chain manufacturing, trading profits fell from £14.2m to £11.8. The acquisition of US-based Jeffrey Chain, which was completed on 31 March, is expected to increase Renold’s share of the transmission and conveyor market to 15% from 3% last year.
Cotterill said Renold’s plants in Stockport and Germany would benefit from £5-6m of orders to supply transmission chain, replacing Jeffrey’s existing far eastern suppliers.
He indicated no further acquisitions were likely. `We are going to consolidate and get the new businesses performing first,’ he said.
The company’s machine tools division continued to perform poorly, with losses increasing to £800,000 from £200,000. Renold said difficult international trading conditions were to blame with a flat aerospace market hitting its Jones & Shipman subsidiary, acquired last year.
The Calais Automotive Systems business saw demand for timing systems rise, but profits only started to increase in the fourth quarter as investment in new plant started to pay off. Further manufacturing capacity was brought on stream to supply timing systems for General Motors’ world engine. Cotterill estimated the GM contract would mean $10m (£6.6m) worth of business per year for Renold.
Tony Brown, Renold’s group financial controller will become finance director on 1 August, succeeding John Allan who retires from the board after 13 years.
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