N+1 Singer and finnCap reiterated BUY and HOLD ratings respectively
Companies: Renold plc
International power transmission specialist Renold released its finals on Tuesday, reporting in-line results with good sales progress but modest profit growth after challenging headwinds.
Reported revenue grew 11% to £183.4m after its recent acquisition Tooth Chain offset declines in Torque Transmission and Chain operations outside Europe. On an underlying basis, revenues fell 0.7%. Underlying revenue grew nearly 3% in H2, which offset the 4% drop in H1.
N+1 Singer said FY17 results were in line with its forecasts, as it reiterated its BUY rating and said that the Group remains well-positioned to deliver "meaningful profit growth" as the backgrop becomes more supportive:
"This was accompanied by growth in order book, providing encouragement for FY18. Management sees some signs of improvement in the group’s markets, although also highlights continuing macro-economic uncertainty."
While finnCap reiterated its HOLD rating, saying some markets were seeing firmer conditions but challenges remained.
CEO Robert Purcell said the company had delivered a robust performance in difficult markets, despite headwinds on revenue and operating profit, thanks to operating efficiencies:
"The impact... would have been far greater had it not been for the actions delivered to increase operating efficiencies as part of our STEP 2020 strategy.
Markets stabilised during the year, and there was a return to revenue growth in the second half of the year along with an increase in order intake."
He added that there were indications of an improvement in its market, but that macro-economic uncertainty remains.
