Renold PLC on Wednesday said profit fell in the first half of its current financial year, hurt by currency exchange rates and a decline in revenue.

The Manchester, England-based company which supplies industrial chains and related power-transmission products said pretax profit for the six months that ended September 30 was £9.5 million, down 27% from £12.5 million last year.

Its bottom line in the prior year was boosted by a one-off £2.2 million exceptional profit, related to the group’s assignment of the lease for its closed Bredbury site.

Currency exchange rates also hit profit. Operating profit adjusted at constant exchange rates actually rose 3.9% to £15.6 million from £15.0 million.

Revenue fell 1.5% to £123.4 million from £125.3 million the year before, but increased 0.6% at constant exchange rates.

Renold acquired both the US and Canadian arms of Mac Chain Co Ltd for £23.8 million during the six-month period, to expand the group’s access to the North American conveyer and forestry chain markets.

Order intake during the six-month period grew 2.3% year-on-year to £112.3 million from £109.7 million, while operating costs increased 0.8% to £110.0 million from £109.1 million.

Since the end of the six-month period, Renold said its manufacturing facility in Valencia, Spain has been damaged by the recent flooding in the area. This is estimated so far to have cost the company around £1 million.

Chief Executive Officer Robert Purcell said: ‘Renold continues to deliver improving results in what have been variable and generally difficult markets. The Renold business with its diversity of customers, geography, markets and applications has shown its strength in a period of considerable economic upheaval. Our Step 2 strategy is being consistently executed and is delivering good results.

‘In the first half, we have made further progress with our inorganic growth strategy through the acquisition of Mac Chain, another excellent addition to the group and one that enhances our market position in a number of sectors and geographies. Our strong cash generation means that we can accelerate the cadence of value-enhancing bolt-on acquisitions.

‘Whilst we see no signs of the global economic conditions significantly improving in the second half, the resilience of the group gives the board confidence in delivering underlying full-year results in line with market expectations.’

Renold cited a company-compiled market consensus for full-year revenue between £252.4 million and £252.6 million, which would represent a 4.5% growth from £241.4 million last year, and operating profit between £29.5 million and £31.2 million, compared to £30.5 million the year before.

Shares in Renold were down 9.2% at 48.83 pence each in London on Wednesday afternoon.

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