For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250709:nRSI2570Qa&default-theme=true
RNS Number : 2570Q Renold PLC 09 July 2025
Renold plc
Final results for the year ended 31 March 2025
("Renold", the "Company" or, together with its subsidiaries, the "Group")
Record trading performance, significant earnings growth and strong cash
generation
Renold (AIM: RNO), a leading international supplier of industrial chains and
related power transmission products, is pleased to announce its audited
results for the year ended 31 March 2025 ("FY25").
Financial highlights
£m 2025 2024 Change Change (constant currency)(1)
Revenue 245.1 241.4 +1.5% +3.9%
Adjusted operating profit(2) 32.2 29.7 +8.4% +11.4%
Return on sales(2) 13.1% 12.3% +80bps +90bps
Adjusted profit before tax(2) 24.3 22.1 +10.0%
Net debt(3) 44.8 24.9
Adjusted earnings per share(2) 9.0p 7.8p +15.4%
Additional statutory measures
Operating profit 28.5 30.5 -6.6%
Profit before tax 20.6 22.9 -10.0%
Basic earnings per share 7.6p 8.3p -8.4%
• Revenue of £245.1m, increased 1.5% year on year, up 3.9% at constant exchange
rates (FY24: £241.4m)
• Adjusted operating profit, £32.2m (FY24: £29.7m), up 8.4% at reported rates
and 11.4% at constant currency. Return on sales 13.1%, up 80bps
• Net debt at 31 March 2025, £44.8m, increased in the year following the
acquisition of Mac Chain (£23.8m), and the Cardiff property (formerly leased)
• Year end net debt 1.0x adjusted EBITDA (31 March 2024: 0.6x)
• Adjusted EPS up 15.4% to 9.0p (FY24: 7.8p); Basic EPS 7.6p (FY24: 8.3p)
Business highlights
• The Group delivered record adjusted results, with both Chain and TT divisions
performing strongly, despite continued market uncertainty.
• Constant currency order intake of £250.1m (FY24: £227.5m), increased 9.9%,
7.5% when currency headwinds are taken into account.
• Closing order book at £83.0m (FY24: £83.6m) remains strong.
• Acquisition of Mac Chain in September 2024, for US$30.9m, increases the
Group's access to the Western US and Canadian markets, while also increasing
the Group's share of the forestry chain market. The integration process is
progressing to plan.
• On 25 June 2025 the Group announced the acquisition of Ognibene s.p.a., a
leading supplier of transmission chain in Italy, for a cash consideration of
€10.0m. The acquisition is expected to be immediately earnings enhancing.
• Increased capital investment of £16.4m (FY24: £9.0m) during the year has
improved the efficiency, productivity and capability of the Group's
manufacturing locations and includes the purchase of the Cardiff property and
the Valencia rebuild.
• In October 2024, the Group manufacturing facility in Valencia was impacted by
a major flood; rebuilding work is progressing well, with customer service
levels fully recovered.
(1) See below for reconciliation of actual rate, constant exchange rate and
adjusted figures
(2) See Note 20 for definitions of adjusted measures and the differences to
statutory measures
(3) See Note 17 for a reconciliation of net debt which excludes lease
liabilities
Robert Purcell, Chief Executive, commented:
"I am pleased that the Group performed strongly throughout the year,
reflecting Renold's excellent market position and fundamentals, combined with
all the hard work, strategically, commercially and operationally, that has
been undertaken over recent years by our employees across the world. Renold
continues to increase its capabilities and international footprint, both
organically and through acquisition, which we believe positions the business
well to address the needs of a broad customer base.
Our clear and effective strategy has delivered further progress and strong
results in FY25, but we remain mindful of the additional challenges presented
by the current economic backdrop. The Group has a broad international
footprint and highly differentiated product offering, and as such has been
able, using supply chain flexibility and price rises, to mitigate a large part
of the direct cost headwinds presented by current changes to tariff regimes.
Overall, volume demand during the early part of FY26 has been slightly below
prior year levels, with some customers deferring procurement decisions in
response to the heightened level of uncertainty, affecting a number of our
geographic and sector end-markets. During the first quarter, the impact of
reduced Group sales volumes was largely offset by pricing and we will take
further pricing action to meet additional cost increases if necessary. We are
also seeking to manage the effects of currency movements and particularly the
weaker US dollar, which if the current exchange rate is maintained for the
remainder of the financial year, would represent a translational headwind to
earnings.
We would expect greater customer outlook visibility to drive improved demand,
but currently anticipate this to remain subdued, at least through the
remainder of the first half of the current financial year. Against this
backdrop, we are focussed on maximising our efficiency and ensuring we can
respond effectively to changing conditions, in order to maintain our strategic
momentum."
Offer from MPE Bid Co ("MPE")
On 13 June 2025, MPE announced a firm intention to make an offer to acquire
the entire issued share capital of Renold, at a price of 82 pence per share,
which has been recommended by the Board (the "MPE Offer"). As at 9 July 2025,
the MPE Offer remains subject to a number of conditions, including approval by
the Company's shareholders and consequently there can be no certainty that a
transaction will complete. Should the MPE Offer be successful, the transaction
is expected to complete during FY26.
Meeting for analysts and institutional investors
A virtual meeting for institutional investors and analysts will be held today
at 9.30am BST. If you wish to attend this meeting please contact
renold@investor-focus.co.uk or call Tim Metcalfe of IFC Advisory Limited (020
3934 6632) before 8.45am to be provided with access details.
Reconciliation of reported and adjusted results
Revenue Operating profit Earnings per share
2025 2024 2025 2024 2025 2024
£m £m £m £m pence pence
Statutory reported 245.1 241.4 28.5 30.5 7.6 8.3
Amortisation of acquired intangible assets - - 1.6 1.0 0.8 0.5
Acquisition costs - - 1.6 0.5 0.8 0.2
- Deferred tax triggered on acquisition - - - - - (0.5)
Impact of Valencia flood - - 0.4 - 0.2 -
- Tax impact of Valencia flood - - - - (0.5) -
Assignment of lease and cost of closed sites - - - (2.3) - (1.1)
Unwind of fair value inventory uplift on acquisition - - 0.6 - 0.3 -
- Tax on unwind of fair value inventory uplift - - - - (0.1) -
Release of dilapidation provision on acquisition of leased property - - (0.5) - (0.2) -
- Tax on release of dilapidation provision - - - - 0.1 -
- Tax on assignment of lease and cost of closed sites - - - - - 0.4
Adjusted 245.1 241.4 32.2 29.7 9.0 7.8
Exchange impact 5.7 - 0.9 - 0.2 -
Adjusted at constant exchange rates 250.8 241.4 33.1 29.7 9.2 7.8
ENQUIRIES:
Renold plc IFC Advisory Limited
Robert Purcell, Chief Executive Tim Metcalfe
Jim Haughey, Group Finance Director Graham Herring
renold@investor-focus.co.uk
0161 498 4500 020 3934 6630
Nominated Adviser and Joint Broker Joint Broker
Peel Hunt LLP Cavendish Capital Markets Limited
Mike Bell Ed Frisby (Corporate Finance)
Ed Allsopp Andrew Burdis / Harriet Ward (ECM)
020 7418 8900 020 7220 0500
Cautionary statement regarding forward-looking statements
Some of the information in this document may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Renold plc and its subsidiaries (the Group). You can identify
forward-looking statements by terms such as "expect", "believe", "anticipate",
"estimate", "intend", "will", "could", "may" or "might", the negative of such
terms or other similar expressions. Renold plc (the Company) wishes to caution
you that these statements are only predictions and that actual events or
results may differ materially. The Company does not intend to update these
statements to reflect events and circumstances occurring after the date hereof
or to reflect the occurrence of unanticipated events. Many factors could cause
the actual results to differ materially from those contained in projections or
forward-looking statements of the Group, including, among others, general
economic conditions, the competitive environment as well as many other risks
specifically related to the Group and its operations. Past performance of the
Group cannot be relied on as a guide to future performance.
NOTES FOR EDITORS
Renold is a global leader in the manufacture of industrial chains and also
manufactures a range of torque transmission products which are sold throughout
the world to a broad range of original equipment manufacturers and
distributors. The Company has a reputation for quality that is recognised
worldwide. Its products are used in a wide variety of industries including
manufacturing, transportation, energy, metals and mining.
Further information about Renold can be found on our website at:
www.renold.com (http://www.renold.com)
Chair's statement
I am pleased to report that FY25 was another record year for Renold in which
we delivered further improvements over what was an excellent financial
performance in the prior financial year, while completing a bolt-on
acquisition in the Pacific Northwest of North America, which strengthens our
position both regionally and particularly in the North American forestry
market.
In October 2024, our production facility in Valencia was impacted by a
significant multi-generational flooding event. I am grateful that none of our
employees were injured during the flood, and I have been impressed by both the
resilience of the workforce and their tireless efforts to bring the facility
back into full production during the second half of the year. I also continue
to be impressed by the engagement, flexibility and adaptability of our teams
across the world, who have delivered an outstanding result despite the various
geopolitical challenges affecting the business world.
Strategic developments
During the year, the Renold strategic change programmes across the Group once
again delivered meaningful benefits, particularly in standardising and
simplifying the business.
The completion of several major strategic restructuring initiatives in prior
years, together with strong free cash generation and a solid balance sheet,
puts the Group in an excellent position to capitalise on accretive
acquisitions that augment our existing market position. This will allow us to
accelerate growth in revenue of our existing products, in adjacent sectors and
by entry into financially attractive under-represented applications and
geographies. Most importantly, the Group will also benefit from significant
production synergies by integrating acquired businesses.
The continuing review of our capabilities throughout the Group is identifying
opportunities for the upgrade and development of existing manufacturing
processes across our international locations to create higher specification,
higher performance products. This review will also facilitate standardisation
across more product lines which, in turn, will enable us to benefit more
comprehensively from our geographic footprint and economies of scale. In
addition, flexibility between manufacturing locations will support increasing
customer expectations for supply chain diversification, for risk mitigation
and a changing tariff environment, improving even further our value
proposition.
Sustainability
During the year, the Group continued to develop its strategy for long-term
sustainability, including projects aiming to reduce energy consumption, raw
material waste, packaging use and carbon dioxide emissions, whereby Renold is
ensuring sustainability is one of its guiding principles. Renold is focussed
on making a difference through real actions which, over a period of time, aim
to deliver discernible benefits for the environment, our customers and the
business.
Offer from MPE Bid Co ("MPE")
On 13 June 2025, MPE announced a firm intention to make an offer to acquire
the entire issued share capital of Renold, at a price of 82 pence per share,
which has been recommended by the Board (the "MPE Offer"). As at 9 July 2025,
the MPE Offer remains subject to a number of conditions, including approval by
the Company's shareholders and consequently there can be no certainty that a
transaction will complete. Should the MPE Offer be successful, the transaction
is expected to complete during FY26.
Dividend
In light of the MPE Offer, announced on 13 June 2025, the Board has decided
not to declare a final dividend for the year ended 31 March 2025 ("FY25"), as
MPE has reserved the right to decrease the price per Renold share payable in
respect of the Acquisition for any dividend declared, made, paid or that
becomes payable by Renold on or prior to the effective date of the
Acquisition.
Summary
The Group has performed admirably in the face of continued economic and
geopolitical uncertainty. The strong and improving trading and financial
performance of the Group, particularly a higher adjusted operating margin and
increased cash flow generation, is providing greater flexibility to exploit
future organic and acquisition-related growth opportunities. I would like to
thank all our employees around the world, especially those in Valencia, for
their diligence and commitment, who have been key to delivering the strong
results for the Group.
DAVID LANDLESS
CHAIR
9 July 2025
Chief Executive's review
This year saw a continuation of the Group's strong momentum and a further
record year, with the Group's FY25 adjusted operating profit of £32.2m some
8.4% higher than the prior year.
Revenue for the year was £245.1m (FY24: £241.4m), a year on year increase of
3.9% at constant exchange rates, or an increase of 1.5% when currency
headwinds are taken into account. In September 2024 the Group acquired the
operations of Mac Chain Company Ltd, based in the Pacific Northwest of both
the US and Canada. Mac Chain contributed £9.3m to turnover during its period
of ownership.
Group constant currency order intake during the year was £250.1m (FY24:
£227.5m), an increase over the prior year of 9.9%. Including the impact of
currency headwinds, reported order intake was £244.5m, a 7.5% increase on the
prior year. May 2024 saw the Group announce a large military contract for
£10.6m to supply couplings to the Canadian navy; excluding the impact of the
large military contract constant currency order intake increased by 5.3%.
The closing order book at 31 March 2025 of £83.0m (FY24: £83.6m) remains
close to record levels and increased slightly over the half year position (30
September 2024: £80.8m).
Group adjusted operating profit(1) of £32.2m (FY24: £29.7m) was 8.4% ahead
of prior year on a reported basis, and 11.4% ahead on a constant exchange
rates basis. Pleasingly, return on sales for the year at 13.1% increased 80bps
over last year's reported figure of 12.3%. Profitability was strong in the
second half of the financial year, where Mac Chain, in line with analysts'
estimates, contributed £1.3m to the Group adjusted operating profit.
Statutory operating profit reduced to £28.5m (FY24: £30.5m), driven
primarily by adjusting items relating to the impact of the Valencia flood of
£0.4m, unwind of fair value inventory uplift on acquisition of £0.6m, costs
associated with the acquisition of Mac Chain of £1.6m, and amortisation of
acquired intangibles of £1.6m, offset by the release of a dilapidation
provision for the formerly leased Cardiff site of £0.5m, while the prior year
was flattered by a non-recurring one-off profit of £2.3m relating to the
assignment of a lease on a closed site.
The Group continued to benefit from the impact of the significant efforts
undertaken in the current and previous years to lower the fixed cost base
whilst increasing flexibility and operational leverage. The Group has
successfully managed a period of significant political uncertainty, with the
ongoing war in Ukraine, the US elections, and supply chain disruption to
materials and transportation, in terms of availability, lead times and
increased input costs. Going forward political uncertainty continues unabated,
with the threat of worldwide tariffs and US trade sanctions adding to the
uncertainty. The Group is planning to respond in a robust manner to the threat
of tariffs, and intends to pass on any increased costs, as we have previously
done, while attempting to maintain margins and simultaneously continuing to
run cost reduction, efficiency, simplification and standardisation programmes.
We expect cost pressure on material, labour, energy and transportation to
persist in the current financial year.
Renold continues to drive increased operational performance through specific
projects aimed at better levels of efficiency and productivity, through
automation, improved design and engineering, standardisation of products,
better utilisation of machinery and people, including more flexible working
practices, and leveraging the benefits of improved procurement strategies. The
Group's capital investment programme increased during the year, and has
continued to concentrate on increased automation in all of our facilities,
together with replacement expenditure due to the Valencia flood, which we
expect to be covered by insurance. The Group also took the opportunity to
invest in the long-term future of the Couplings business, by purchasing the
formerly leased Cardiff site. The Group's operational capabilities are
steadily improving as consistent levels of investment bear fruit and we
continue to develop ever better technologies and processes, allowing us to
make higher specification and better performing products that maintain and
enhance our market leadership.
In September 2024, the Group acquired Mac Chain for US$30.9m, which increases
the Group's access to CVC and forestry chain markets in the Pacific Northwest
of the USA, British Columbia, and Quebec, building on Renold's existing strong
brand position. The Mac Chain operational sites will allow us to accelerate
our programme of service centre development, as we use excess space and
capacity to offer a greater range of products and services. The business is
performing in line with the Board's expectations at the time of the
acquisition, and its integration with the wider American business is
progressing well.
A focus on free cash flow generation remains a key priority for management.
Closing net debt was £44.8m (31 March 2024: £24.9m). The purchase of the Mac
Chain business, together with related costs and deferred consideration for a
prior acquisition, resulted in a total acquisition spend of £23.4m.
Additionally, the Group made the final payment for the Group's Chinese factory
building of £2.5m and purchased the formerly leased Cardiff site for £3.8m.
(1) See Note 20 for definitions of adjusted measures and the differences to
statutory measures
Chain performance review
The high levels of activity seen within the Chain division in the prior year
continued. Revenue on a constant exchange rates basis increased by 3.9%; 1.3%
when currency headwinds are taken into account, and finished the year at
£195.3m. In September 2024 the Group acquired the trading assets of Mac
Chain, which contributed revenue of £9.3m. Adjusted operating profit
increased by 1.9% to £32.1m; 4.4% at constant exchange rates. Return on sales
improved by 10 basis points, to 16.4% (FY24: 16.3%). Statutory operating
profit was £29.5m (FY24: £32.8m).
2025 2024
£m £m
External revenue 194.6 191.9
Inter-segment revenue 0.7 0.9
Total revenue 195.3 192.8
Foreign exchange 5.0 -
Revenue at constant exchange rates 200.3 192.8
Operating profit 29.5 32.8
Assignment of lease and costs relating to closed sites - (2.3)
Impact of Valencia flood 0.4 -
Unwind of fair value inventory uplift on acquisition 0.6 -
Amortisation of acquired intangibles 1.6 1.0
Adjusted operating profit 32.1 31.5
Foreign exchange 0.8 -
Adjusted operating profit at constant exchange rates 32.9 31.5
Order intake in the Chain division increased by 4.2% year on year, or 6.8% at
constant exchange rates. Mac Chain contributed £9.2m to order intake in the
year.
Order intake in Europe reduced by 4.6% on a constant exchange rate basis, as
both the impact of the disruption to production in Valencia following the
flood, and the continued softness in the German economy took their toll. In
North America, constant exchange rate order intake increased by 15.4%, helped
considerably by Mac Chain; excluding the acquisition, underlying order intake
increased by 2.3%. Pleasingly, the other chain businesses all recorded strong
order intake growth, with Australasia 14.0% higher than the prior year on a
constant exchange rate basis, China 32.4% higher, although from a low base,
and India 13.2% higher. Closing order books for the division finished the year
at £40.1m (FY24: £47.0m).
Chain Europe, which is our largest Chain business, saw revenue on a constant
exchange rates basis reduced by 2.2%, a creditable performance given the
general continued sluggishness of the Northern European economy, and the
impact of the six weeks of lost production at the Valencia manufacturing
business following the flood. Operating profit in the region increased year on
year by 7.4% at constant exchange rates, as the business concentrated on
gaining production efficiencies, through increased automation, and making
better use of production facilities based outside Europe.
In the Americas, constant exchange rate turnover at £86.4m was 6.3% higher
than FY24. Excluding the acquisition of Mac Chain, underlying sales reduced by
5.6%. Order intake was weaker than expected due to economic uncertainty in the
run up to the US elections. Activity post-election continues to be subdued due
to the anticipated increased tariffs and potential worldwide trade sanctions.
The business continues to invest in improved production machinery, especially
concentrating on automation of component manufacture and increased heat
treatment capacity, aimed at bringing forward anticipated synergies from the
Mac Chain acquisition.
In Australasia, we continued to deliver revenue growth with turnover on a
constant exchange rate basis increasing year on year by 9.0%. In September
2023, the Group acquired the trading assets of Davidson Chain, and excluding
the impact of the acquisition, underlying revenues increased by 5.2% at
constant exchange rates. Sales in the Malaysian and Indonesian markets
continue to grow strongly, with revenue increasing by 12.6% and 11.1%
respectively. Profitability in the Australasian business improved markedly,
increasing year on year by 28.1%. Even excluding the impact of the
acquisition, underlying profitability increased by 24.3%, helped by improved
productivity in the Melbourne plant, a healthy pipeline of new product wins
and development along with cost saving engineering initiatives aimed at the
South East Asian markets, together with an increased emphasis on both customer
service and stock availability.
Revenues in India recovered markedly during the year, increasing by 19.1% on a
constant exchange rate basis. Product development aimed at countering the
impact of increased domestic and Chinese competition led to a recovery in
demand especially in the agricultural market. The benefit of opening the
regional distribution warehouse in Nagpur was also evident, with the unit
generating an increase in turnover of some 91.0% over the prior year, which
was adversely impacted by a two-week closure of the main production site for
the implementation of a new fully integrated ERP system. The unit is
benefitting from the increased visibility and efficiency that the new ERP
system has brought, with positive impacts on sales, profitability and service
seen during the financial year.
Following the success of the Nagpur regional warehouse, plans are currently
being formulated for a further three regional distribution centres to help
provide significantly improved delivery times to all parts of India over the
coming years. Investment plans for the Indian factory include the introduction
of the same state-of-the-art technology used elsewhere in the Group for the
manufacture of many component types plus assembly. This will allow India to
better support both external and Group customers with higher quality products
with better specifications and performance. The uncertainty over US tariffs
demonstrates the benefit of Renold having production facilities in a number of
countries, and therefore being able to support customers' supply chain
strategies. India is expected to be a beneficiary of the current uncertainty.
Revenues in China remained broadly flat during the year, reducing by 0.8%.
External demand reduced by 5.6%, driven by a slowdown in the domestic Chinese
market. Demand from Group customers increased by 3.9% during the period as
European order intake for these products expanded and the Group took the
opportunity to ship transmission chain products manufactured in China to the
US ahead of the introduction of higher tariff levels.
Studies are currently being undertaken for the transfer of Chinese made
mid-tier products sold to the US to other Renold Group manufacturing
facilities, while projects focussed on improving the quality and specification
of products manufactured in China are being accelerated, allowing the Jintan
site to manufacture several other Renold standard products and components for
other broader international markets.
The Chain division continues to develop and evolve through investment in
equipment, processes, training, and development of our engineering and sales
teams. This provides us with a continued strengthening of our core underlying
capabilities upon which our market leading position is built.
Torque Transmission performance review
Divisional revenues of £54.8m were 2.4% higher than in the prior year due to
the continued recovery in demand in our North American markets and further
business wins for our Chinese operation. The Renold North American
manufacturing and distribution business, based in Westfield NY, saw turnover
grow by 5.1% year on year while the Chinese business, based in Shanghai saw an
increase in turnover of 26.1%, albeit from a low base.
Divisional adjusted operating profit increased by 23.8% to £10.4m in the
year, benefitting from operational gearing, increased profit recognition on
the long term military contracts as the work progresses, and increased
automation and operational efficiency. Return on sales for the division was
19.0% (FY24: 15.7%); an increase of 330bps during the year. On a constant
exchange rates basis adjusted operating profit increased by 25.0%.
Momentum in this division, which has a later trading cycle and generally
larger orders than our Chain business, continues to be positive.
2025 2024
£m £m
External revenue 50.5 49.5
Inter-segment revenue 4.3 4.0
Total revenue 54.8 53.5
Foreign exchange 0.7 -
Revenue at constant exchange rates 55.5 53.5
Operating profit 10.9 8.4
Release of dilapidation provision on acquisition of leased property (0.5) -
Adjusted operating profit 10.4 8.4
Foreign exchange 0.1 -
Adjusted operating profit at constant exchange rates 10.5 8.4
Order intake in the division at £57.1m increased by 19.6% during the year, or
by 21.3% at constant exchange rates. In May 2024, the Group announced a large
military contract for the supply of Hi-Tec couplings to the Royal Canadian
Navy, for a total contract value of £10.6m.
The North American business unit benefitted from continued high demand for
gears and couplings supplied intra-group from the UK, together with its own
manufactured gear spindles and shakers, both in the US domestic market and
internationally. Demand for gear couplings for the US mass transit market also
continued at historically high levels. Operating profits recorded in the US TT
business increased by 7.0% year on year.
Demand for Group-supplied products through the Australian distribution and
service centre was soft as a number of larger projects were completed, while
sales in the Chinese market increased by 26.1% as a number of new business
wins came on stream.
The Couplings business unit saw a 6.0% increase in turnover year on year. As
expected, the marine business, which manages the long-term military contracts,
remained busy, as work continued on the second phase of the UK military
contract, and the initial phase of the Australian military contract.
Product development in the Couplings business continued, with new designs for
couplings that expand the performance envelope of current products, whilst
adding new features and benefits, and sales of the RBI rubber in compression
product continued apace. The business unit invested in improved testing
capacity as development of new enhanced ranges of couplings continues to
gather speed.
The Gears business made good progress in order intake, showing a 13.3%
increase in the period. Profitability increased markedly, up 135% despite
facing significant inflationary pressures, as the benefit of recent capital
investment in automation, and other efficiency programmes bore fruit. Notable
developments include new products aimed at the escalator market, especially
relating to metro systems, and a number of specialist niche products aimed at
the water treatment market. Demand from OEM customers, particularly for larger
projects in the US and UK, which are our key geographic markets, remained
strong during the year.
Sustainability
Renold takes a pragmatic approach to sustainability. Our focus is on making an
actual difference through continual work programmes, aiming to reduce both
energy consumption and environmental impact, and involving our customers,
local communities, workforce and other stakeholders. We have not, and do not
plan to make far-reaching statements on future carbon neutrality; instead we
are working to be better each year. Alongside our own direct work on
sustainability, we are already manufacturing products that will assist our
customers to improve their sustainability performance. Development programmes
have started improving our products even further so that customers have more
opportunities to reduce their environmental impact.
The Group Sustainability Committee has driven a number of projects throughout
the year and is constantly assessing and promoting new opportunities. One
project started in the year is aimed at reducing Renold's use of water, while
we continue a successful programme aiming to cut our electricity consumption
across our entire international footprint.
At a regional level, our businesses across the world have been tasked with
developing their own sustainability project roadmaps, seeking to ensure that
our efforts are relevant to the highly diverse regions within which we
operate. Projects are running on waste reduction, elimination of various
chemicals, and reducing water and energy usage. More detailed information on
climate-related financial disclosures is found in our sustainability section
in the Annual Report.
Strategic Plan - STEP2 progress
Having created a stronger operational platform for the Group in recent years,
and with a robust balance sheet, we have increased our focus on our strategy
to accelerate performance through value-enhancing acquisitions, which will
allow us to benefit from both increased geographical and product coverage, and
leverage synergies from increasing the throughput of our existing facilities.
As a result, we have developed a pipeline of acquisition opportunities that we
believe have the ability to meet our financial and operational criteria. Such
acquisitions will allow us to expand our product and service offering as well
as our customer base, further expand our already diverse product portfolio
into adjacent market sectors, and allow us to capitalise on our ability to
provide customers with high specification products that deliver real benefits
to their own business performance.
The Board has a disciplined approach to appraising acquisition opportunities,
ensuring that potential targets will enhance the Group's wider strategy and
earnings. Additionally, the Board is mindful of retaining a conservative
capital structure, and will ensure that the long-term net debt to EBITDA ratio
is maintained at an acceptable level.
During the year, Renold built on its proven track record of acquisitions with
the acquisition of Mac Chain in the Pacific Northwest of the USA, British
Columbia and Quebec. Mac Chain is a manufacturer and distributor of high
quality conveyor chain ("CVC") and ancillary products, with a significant
presence in the forestry and broader industrial markets. A very methodical
integration plan is in place to deliver margin improvement, including the
in-sourcing of third party purchases and centralisation of production to
improve operational efficiency. The previous owners of Mac Chain have
transferred with the business and we are delighted that they and their team
continue to work with us.
Organic growth and continuous business improvements are fundamental drivers of
the Group strategy. Renold is consistently enhancing its operational
capabilities through upgrading equipment and processes, reflected in the
increased capital expenditure, funded by improving cash generation, whilst
prioritising projects with a short payback period. We are focussing new
product development in larger, faster growing market segments, whilst
leveraging manufacturing cost improvements to penetrate new markets.
Our international manufacturing footprint is a major competitive advantage in
the current world of supply chain risk, tariffs, potential trade wars and
geo-political tensions. We continue to expand our capabilities to manufacture
our products across multiple locations, giving our customers, and Renold,
increasing flexibility to transfer production to both low cost and low tariff
countries.
Our Indian business is a particular focus for capital investment and
development in the next few years. We aim to expand the capability of the
business in terms of range, capacity and product specification. As tariffs on
Chinese product remain in place or get higher in many countries, our Indian
business will see major opportunities develop internationally and in its
domestic market.
These projects highlight our capital allocation priorities, and the resulting
investment decisions for the Group. With the large infrastructure projects
complete, capital allocation decisions are focussed on customer service,
upgrading product specification capabilities and optimising revenue growth and
profitability for the Group. For the Chain Division especially, this allows us
to access economies of scale and offer a truly global service with increasing
relevance to large OEM customers. Renold is increasingly an integrated
international supplier and less a series of regional businesses.
The strategic progress made by the Group over recent years has been
significant. Investments in both our production capabilities and our IT
environment have resulted in significant benefits, with:
• Improvements in productivity and operational efficiency as evidenced by
growing sales per employee;
• Greater insight into the performance and opportunities in the business due to
better and more complete data;
• Improvements in the specification and quality of products we are able to make
across our multiple manufacturing sites; and
• Greater flexibility in the cost base as we continue to automate production
processes.
Irrespective of end market conditions, the financial benefits of these
improvements will increasingly come to the fore.
Current operating environment
The effects of the war in Ukraine, especially in terms of higher prices for
energy and materials as seen in the UK and mainland Europe, were less marked
in FY25, only to be replaced with new economic uncertainties brought about by
geopolitical factors, such as de-globalisation and re-shoring, increasing
trade tariffs and the continuing impact of general inflation, higher interest
rates, and growing pressure on labour rates around the world. The volatile
operating environment the Group has faced over recent years abated slightly
during FY25, only to be significantly heightened post year end as the US/China
trade dispute and broader US and international tariffs came to the fore. We
remain conservative around our timing expectations of a full return to normal,
and expect further headwinds to persist to differing degrees in the new
financial year.
Macroeconomic landscape and business positioning
The underlying fundamentals of the Group and the markets we serve provide the
Board with confidence that Renold is well placed to continue to develop and
deliver sustainable profitable growth. These intrinsic qualities have remained
consistent over many years but we are now proactively building on these
fundamentals. They include:
• Valued and recognised brand with well-respected engineering expertise
The Renold brand has been built up over our 150-year history and is trusted by
customers to deliver exceptional products based on our world-class engineering
and product knowledge.
• Global market position and unique geographical manufacturing capability
The global market position of Renold has existed for many years, but following
significant strategic investments in both divisions, the geographic
manufacturing footprint and capabilities we have are unique, permitting us to
service customer demand with increasing levels of flexibility - a critical
factor in a rapidly changing market environment.
• Relatively low cost, but business critical products
Chain and Torque Transmission products are fundamental elements of the systems
into which they are incorporated. Our products are often a small proportion of
the cost of the entire system, but critical to its operation.
• Broad base of customers and end-user markets
Renold products are used in an extremely diverse range of end applications,
sectors, markets and geographies, resulting in a huge spread of customers and
industries served. Markets and applications will change and vary in the
ever-altering environment we operate in but, with its wide spread of products,
geographies, applications and customers, Renold is well positioned.
• High specification products delivering environmental benefits for our
customers
Renold products have always been high specification premium products which
deliver exceptional benefits to customers. Whether through greater efficiency
leading to lower power usage, longer life providing lower lifetime usage of
materials and energy in their manufacture and logistics, or lower lubrication
requirements, Renold products are well placed for an increasingly
environmentally aware marketplace. Our products help our customers meet their
sustainability objectives whilst saving them money.
Outlook
I am pleased that the Group performed strongly throughout the year, reflecting
Renold's excellent market position and fundamentals, combined with all the
hard work, strategically, commercially and operationally, that has been
undertaken over recent years by our employees across the world. Renold
continues to increase its capabilities and international footprint, both
organically and through acquisition, which we believe positions the business
well to address the needs of a broad customer base.
Our clear and effective strategy has delivered further progress and strong
results in FY25, but we remain mindful of the additional challenges presented
by the current economic backdrop. The Group has a broad international
footprint and highly differentiated product offering, and as such has been
able, using supply chain flexibility and price rises, to mitigate a large part
of the direct cost headwinds presented by current changes to tariff regimes.
Overall, volume demand during the early part of FY26 has been slightly below
prior year levels, with some customers deferring procurement decisions in
response to the heightened level of uncertainty, affecting a number of our
geographic and sector end-markets. During the first quarter, the impact of
reduced Group sales volumes was largely offset by pricing and we will take
further pricing action to meet additional cost increases if necessary. We are
also seeking to manage the effects of currency movements and particularly the
weaker US dollar, which if the current exchange rate is maintained for the
remainder of the financial year, would represent a translational headwind to
earnings.
We would expect greater customer outlook visibility to drive improved demand,
but currently anticipate this to remain subdued, at least through the
remainder of the first half of the current financial year. Against this
backdrop, we are focussed on maximising our efficiency and ensuring we can
respond effectively to changing conditions, in order to maintain our strategic
momentum.
Robert Purcell
Chief Executive
9 July 2025
Finance Director's review
Renold once again delivered a record performance, with Group adjusted
operating profit increasing by 8.4% to £32.2m. The business produced an
adjusted operating margin of 13.1% (FY24: 12.3%) and achieved a 15.4% increase
in adjusted EPS to 9.0p.
2025 2024
Reconciliation of reported to adjusted results Order intake Revenue Operating profit Order intake Revenue Operating profit
£m £m £m £m £m £m
Reported 244.5 245.1 28.5 227.5 241.4 30.5
Assignment of lease and cost of closed sites - - - - - (2.3)
Impact of Valencia flood - - 0.4 - - -
Unwind of fair value inventory uplift on acquisition - - 0.6 - - -
Release of dilapidation provision on acquisition of leased property - - (0.5) - - -
Acquisition costs - - 1.6 - - 0.5
Amortisation of acquired intangible assets - - 1.6 - - 1.0
Adjusted 244.5 245.1 32.2 227.5 241.4 29.7
Impact of foreign exchange 5.6 5.7 0.9 - - -
Adjusted at constant exchange rates 250.1 250.8 33.1 227.5 241.4 29.7
revenue AND OPERATING PROFIT
Constant exchange rate revenue was £250.8m, and grew by 3.9%. Translational
exchange variances were a headwind, and reduced reported orders and revenue to
£244.5m and £245.1m respectively.
In the Chain Division, constant currency revenue increased year on year by
£7.5m, or 3.9%. The Mac Chain acquisition contributed £9.3m to turnover
during the year; excluding the acquisition, underlying revenue reduced by
£1.8m or 0.9%, which principally reflects the effect of the Valencia flood.
The Group generated an adjusted operating profit for the year of £32.2m
(FY24: £29.7m), excluding the impact of adjusting items detailed below.
Reported operating profit for the year was £28.5m (FY24: £30.5m). Return on
sales increased by 80bps during the year to 13.1% (FY24: 12.3%). Operating
profit margin, calculated on a statutory basis, was 11.6% (FY24: 12.6%)
Adjusting items
Adjusting items for FY25 comprise costs associated with the Valencia flood,
details of which are disclosed in Note 2, including write off of assets and
net of interim insurance payments on account of £0.4m (FY24: £nil), unwind
of fair value inventory uplift on acquisition £0.6m (FY24: £nil),
acquisition-related intangible asset amortisation of £1.6m (FY24: £1.0m),
acquisition and re-organisation costs of £1.6m (FY24: £0.5m), release of a
provision for dilapidations on the purchase of the formerly leased Cardiff
site of £0.5m (FY24: £nil), while FY24 also included an exceptional profit
on the assignment of the lease of a closed UK site of £2.3m (FY25: £nil).
Adjusting taxation items in the current year include £0.1m credit (FY24:
£nil) in relation to the release of a dilapidation provision in the UK and a
£1.0m (FY24: £nil) charge in relation to the tax impact of the costs
incurred due to the Spanish flooding comprising the current tax impact as well
as the impact of deferred tax on loss recognition. In the prior financial
year, the adjusting tax items comprised a tax charge of £0.8m (FY25: £nil)
in relation to the assignment to a third party of the lease for a closed UK
site and a deferred tax credit of £1.0m (FY25: £nil) arising from the
Davidson acquisition.
Foreign exchange rates
The majority of Renold's business is denominated in US Dollars and Euros.
Foreign exchange rates have remained volatile, with a 3% strengthening of
Sterling against the Euro and 2% strengthening of Sterling against the US
Dollar between March 2024 and March 2025. The movements in both US Dollars and
Euros during the year together reduced sales by £5.7m and adjusted operating
profit by £1.0m.
The weighted average exchange rates for the year ended 31 March 2025, which
take into account phasing over the year, were 1.28 for the US Dollar and 1.19
for the Euro (2024: 1.26 and 1.16 respectively).
FX rates (% of Group sales) 31 Mar 24 31 Mar 25 31 Mar 25 2024 Average 2025 Average 2025
FX rate FX rate Var % FX rate FX rate Var %
GBP/Euro (28%) 1.17 1.20 3% 1.16 1.19 3%
GBP/US$ (37%) 1.26 1.29 2% 1.26 1.28 2%
GBP/C$ (7%) 1.71 1.86 9% 1.70 1.79 5%
GBP/A$ (6%) 1.94 2.07 7% 1.91 1.97 3%
If the year-end exchange rates had applied throughout the year, there would be
an estimated decrease of £2.8m to revenue and £0.3m to operating profit.
FinancE costs
Total finance costs in the year were £7.9m (FY24: £7.6m). This includes
interest on bank loans and overdrafts of £4.1m (FY24: £3.7m), amortisation
of arrangement fees of £0.4m (FY24: £0.3m), and £1.0m (FY24: £0.8m) of
interest on lease liabilities. The net IAS 19 finance charge, which is a
non-cash item, was £2.4m (FY24: £2.7m).
The increase in interest payable on external bank loans and overdrafts was
driven primarily by the acquisition of Mac Chain for US$30.9m during September
2024, with US$27.8m paid in FY25. This will be followed by two further
payments of US$1.57m, payable 12 and 24 months from the completion of the
acquisition.
Profit before tax
Profit before tax was £20.6m (FY24: £22.9m), a reduction of 10.0% during the
year.
Taxation
Excluding the tax effect of the non-recurring items described above, the
effective tax rate on adjusted earnings was 27% (FY24: 27%), and is expected
to be broadly at this level in FY26.
The total tax charge in the year of £5.5m (FY24: £5.8m) is made up of a
current tax charge of £3.9m (FY24: £6.5m) and a deferred tax charge of
£1.6m (FY24: credit of £0.7m). The decrease in the current tax charge is
attributable to reduced taxable profits across the Group, reflecting the mix
of jurisdictions in which profit was generated. For further details see Note
4.
The effective tax rate of 27% (2024: 25%) is higher than the prevailing UK tax
rate of 25% (2024: 25%). The increase in the effective tax rate is primarily
driven by a change in the profit mix across the Group, with higher profits in
jurisdictions where the prevailing tax rate is higher than the UK tax rate as
well as an increase in centrally held uncertain tax provisions and an increase
in non-deductible expenses relating to acquisition costs in the period.
EARNINGS PER SHARE
Profit after tax for FY25 was £15.1m (FY24: £17.1m). Adjusted earnings per
share were 9.0p (FY24: 7.8p). Basic earnings per share were 7.6p compared to
8.3p for the year ended 31 March 2024.
2025 2024
£m £m
Adjusted profit after taxation 17.8 16.1
Effect of adjusting items, after tax:
- Assignment of lease and cost of closed sites - 1.5
- Acquisition costs (1.6) (0.5)
- Amortisation of acquired intangible assets (1.6) (1.0)
- Impact of Valencia flood 0.6 -
- Unwind of fair value inventory uplift on acquisition (0.5) -
- Release of dilapidation provision on acquisition of leased property 0.4 -
- Deferred tax triggered on acquisition - 1.0
Profit after taxation 15.1 17.1
Basic adjusted earnings per share 9.0p 7.8p
Basic earnings per share 7.6p 8.3p
Balance sheet
Net assets at 31 March 2025 were £67.4m (31 March 2024: £50.2m). Retained
profit was £15.1m in the year (2024: 17.1m).
CASH FLOW AND NET DEBT
FY25 FY24
£m £m
Adjusted operating profit 32.2 29.7
Add back depreciation and amortisation 10.6 9.8
Add back loss on disposal of property, plant and equipment (0.1) -
Add back share-based payments 1.5 1.4
Adjusted EBITDA(1) 44.2 40.9
Movement in working capital (2.4) 3.8
Net capital expenditure (13.3) (10.1)
Operating cash flow(1) 28.5 34.6
Income taxes (7.0) (3.8)
Pensions cash costs (6.1) (6.0)
Repayment of principal under lease liabilities (3.0) (2.5)
Finance costs paid (5.5) (4.8)
Consideration paid for acquisition (23.4) (5.2)
Dividends paid (1.0) -
Own shares purchased for the EBT - (4.5)
Chinese building repayment (2.5) (2.2)
Valencia Flood (net of insurance proceeds) 0.1 -
Other movements - (0.7)
Change in net debt (19.9) 4.9
Closing net debt(1) 44.8 24.9
(1) Adjusted EBITDA and operating cash flow are alternative performance
measures as defined in Note 20.
Net debt increased by £19.9m to £44.8m (31 March 2024: £24.9m). The Group
invested £23.4m (FY24: £5.2m) in acquisitions in the year. Net debt at 31
March 2025 comprised cash and cash equivalents of £22.0m (31 March 2024:
£17.8m) and borrowings of £66.8m (31 March 2024: £42.7m).
Working capital, mainly inventory levels, increased at year end by £1.7m
(FY24: £nil), as the Group supplied additional stock to the US ahead of the
imposition of increased tariffs. Trade receivables and trade payables together
remained broadly flat, while a reduction in provisions resulted from the
continuation of restructuring actions in Germany.
Net capital expenditure of £13.3m (FY24: £10.1m) increased during the
financial year. The Group expects to continue to make investments in the
coming year in increased automation in support of our strategy. Additionally,
the installation of the standard Group ERP system continued as planned.
Pension deficit recovery plan cash costs of £6.1m in FY25 were broadly the
same as in the prior year.
Corporation tax cash paid was £7.0m (FY24: £3.8m), with the increase due to
the full utilisation of brought forward losses in both Germany and the US.
Net cash flow from operating activities, in a statutory format, was £25.0m
(FY24: £32.2m) see Note 17 and the Consolidated statement of cash flows.
Debt facility and capital structure
In April 2025, the Group announced that it had renewed its borrowing
facilities which included an increase of the multi-currency revolving credit
facility from £85.0m to £105.0m, and the extension of the facilities for a
further two years until May 2028. In addition, the Group increased its
accordion option, designed to support the Group's acquisition strategy, from
£20.0m to £25.0m. The principal banking covenants remain unchanged, with the
net debt/EBITDA covenant at 3.0 times EBITDA, and the EBITDA / interest cover
at 4.0 times. Other key terms also remain unchanged.
At 31 March 2025, the Group had unused credit facilities totalling £22.8m (31
March 2024: £47.1m) and cash balances of £22.0m (31 March 2024: £17.8m).
Total Group credit facilities, all committed, amounted to £89.5m (31 March
2024: £90.0m).
The Group has operated well within agreed covenant levels throughout the year
ended 31 March 2025 and expects to continue to operate comfortably within
covenant limits in the coming year.
The net debt/adjusted EBITDA multiple as at 31 March 2025 was 1.0x (31 March
2024: 0.6x), calculated in accordance with the banking agreement. Adjusted
EBITDA/interest cover as at 31 March 2025 was 10.7x (FY24: 11.1x).
Going concern
The financial statements have been prepared on a going concern basis. In
determining the appropriate basis of preparation of the financial statements,
the Directors are required to consider whether the Group can continue in
operational existence for the foreseeable future.
Further information in relation to the Group's business activities, together
with the factors likely to affect its future development, performance and
financial position, liquidity, cash balances and borrowing facilities is set
out in the Chair's statement, the Chief Executive's review, the Finance
Director's review and in the section on principal risks and uncertainties.
Additional details of the Group's cash balances, borrowings and facilities are
included in Notes 13 and 14.
The Group regularly monitors its financial position to ensure that it remains
within the terms of its banking covenants; it has remained comfortably within
those covenants for the whole of the financial year.
Given the current level of macroeconomic uncertainty stemming from inflation,
geopolitical risks, including tariffs, and also being mindful of the risks
discussed in the principal risks and uncertainties section, the Group has
performed financial modelling of future cash flows. The Board has reviewed the
cash flow forecasts which cover a period of 12 months from the planned
announcement of the FY25 results, and which reflect forecast revenue across
the Group's business units. The impact of tariffs has been considered as part
of these forecasts, based on information known at the time. Tariffs are not
expected to have a material impact on going concern, largely due to the
Group's ability to manufacture in the US and switch production between
manufacturing sites in various countries.
A reverse stress test has been performed on the forecasts to determine the
extent of a downturn that would result in a breach of covenants. Revenue would
have to reduce by approximately 33% over the period under review for the Group
to be likely to breach the interest cover covenant. The reverse stress test
does not take into account further mitigating actions that the Group would
implement in the event of a severe and extended revenue decline, such as
reducing discretionary spend and capital expenditure. This assessment
indicates that the Group can operate within the level of its current increased
facilities, as set out above, without the need to obtain any new facilities
for a period of not less than 12 months from the date of this report.
Material uncertainty as to going concern
On 13 June 2025, MPE Bid Co, a company majority-owned by a fund managed and
controlled by Morgenthaler Private Equity ("MPE") announced a firm intention
to acquire the issued, and to be issued, ordinary share capital of Renold plc
in accordance with Rule 2.7 of the Takeover Code. The Directors of Renold plc
highlight the following points:
1 Whilst the Directors have not had direct visibility of MPE's post
completion funding for the Group, they have placed reliance on the
certification made by both MPE and their financial advisors that sufficient
financial resources are available for the transaction to be completed.
2 The Directors of Renold plc have had no visibility of the strategic
plans for the Group post transaction, and as such are unable to certify for a
12 month period post the date of these accounts that the Group post completion
can continue for a period of 12 months from the date of this report.
3 The announcement of the acquisition qualifies as an event or condition
that indicates that a material uncertainty exists that may cast significant
doubt upon the Group and Parent Company's ability to continue as a going
concern, under a future structure potentially introduced by MPE.
Following this assessment, and subject to the material uncertainty stated
above, the Directors are satisfied that the Group has sufficient resources to
continue in operation for a period of not less than 12 months from the date of
this report. Accordingly, they continue to adopt the going concern basis in
relation to this conclusion and preparing the consolidated financial
statements. There are no key sensitivities identified in relation to this
conclusion. The financial statements do not include any adjustments that would
be required if the financial statements were prepared on a basis other than
that of a going concern.
Treasury and financial instruments
The Group's treasury policy, approved by the Board, is to manage its funding
requirements and treasury risks without taking any speculative risks. Treasury
and financing matters are assessed further in the section on principal risks
and uncertainties.
To manage foreign currency exchange impact on the translation of net
investments, certain US Dollar, Euro and Canadian Dollar denominated
borrowings taken out in the UK to finance US, European and Canadian
acquisitions are designated as a hedge of the net investment in relevant
subsidiaries. At 31 March 2025 this hedge was fully effective. The carrying
value of these borrowings at 31 March 2025 was £36.0m (31 March 2024:
£10.9m).
At 31 March 2025, the Group had £0.5m (31 March 2024: £0.5m) of its gross
debt at fixed interest rates. Cash deposits are placed short-term with banks
where security and liquidity are the primary objectives. The Group has no
significant concentrations of credit risk, with sales made to a wide spread of
customers, industries and geographies. Policies are in place to ensure that
credit risk on individual customers is kept to a minimum.
Pension assets and liabilities
The Group has a mix of UK (88% of gross liabilities), German (11% of gross
liabilities) and other (1% of gross liabilities) defined benefit pension
obligations as shown below.
2025 2024
Assets Liabilities (Deficit)/ surplus Assets Liabilities (Deficit)/surplus
£m £m £m £m £m £m
UK scheme 94.0 (125.2) (31.2) 100.3 (140.0) (39.7)
German arrangement - (15.5) (15.5) - (17.5) (17.5)
Other arrangements 1.6 (1.9) (0.3) 3.1 (3.0) 0.1
95.6 (142.6) (47.0) 103.4 (160.5) (57.1)
Deferred tax asset 2.5 3.0
Net deficit (44.5) (54.1)
The Group's retirement benefit deficit decreased from £57.1m (£54.1m net of
deferred tax) at 31 March 2024 to £47.0m (£44.5m net of deferred tax) at 31
March 2025. All defined benefit schemes are closed to new members and (with
the exception of the union plan for the Westfield US facility, see below) for
future accrual.
UK funded scheme
The deficit of the UK scheme decreased in the year to £31.2m (31 March 2024:
£39.7m).
A decrease in gross liabilities of £14.8m arose primarily due to an increase
in the discount rate (5.75% FY25 compared with 5.0% in the prior year). The
long-term CPI inflation assumption remained constant at 2.85%.
Contributions in the year ended 31 March 2025 were £5.0m (FY24: £4.6m). This
includes payment of £0.6m per annum for five years until FY27 to cover a
contribution deferral agreed during the Covid pandemic. The underlying
contribution to the UK scheme increases annually by RPI plus 1.5% (capped at
5%).
OTHER ARRANGEMENTS
The largest overseas arrangement is in Germany, which is unfunded in line with
normal practice in Germany, with a total liability and thus deficit of £15.5m
(31 March 2024: £17.5m). Pensions are paid by the Company as they fall due
and cash payments for this arrangement were £1.1m (FY24: £1.1m).
Other overseas arrangements are small and are funded, with a combined deficit
of £0.3m (31 March 2024: surplus of £0.1m). Total contributions in the year
for these schemes were £nil (FY24: £0.3m). During the year, the Group
progressed with plans to buy-out overseas arrangements, with the exception of
that in Germany. In addition, agreement was reached with both employees and
the union to close the union plan for future accrual in Westfield; this is
expected to take effect during FY26.
POST BALANCE SHEET EVENTS
On 25 June 2025, the Group acquired the entire issued share capital of
Ognibene S.p.a. ("Ognibene") for a total cash consideration of €10.0m
(£8.4m). Ognibene is being acquired on a cash free, debt free basis, and will
consist of an initial cash consideration of €9.0m (£7.6m), followed by a
further cash payment of €1.0m (£0.8m), payable 12 months from the
anniversary of completion of the acquisition. Ognibene is a manufacturer and
distributor of high-quality transmission chain ("TRC") and ancillary products
servicing a range of end markets, including packaging machinery, distribution
and food processing. The acquisition increases the Group's access to the
Italian, and wider Southern European market, allowing Renold to improve its
customer service offering by accommodating local stocking of our complete
chain range in Italy, which in turn will generate manufacturing synergies
between Ognibene and Renold's existing international operations.
On 23 April 2025, the Group renewed its core banking facility that was due to
mature in May 2026. The existing multi-currency revolving facility has been
amended and extended by a period of two years and will be in place until May
2028 and is fully committed and available until maturity. The existing
facility has been increased to £105.0m from the previous level of £85.0m and
will be provided by the existing banks: HSBC UK, Allied Irish Bank (GB), and
Citibank.
On 21 May 2025, the Board of Renold confirmed that it has received two
separate unsolicited and non-binding all-cash proposals from a consortium
comprising Buckthorn Partners LLP and One Equity Partners IX, L.P, and Webster
Industries, Inc, a company majority-owned by a fund managed and controlled by
Morgenthaler Private Equity ("MPE") to acquire the entire issued and to be
issued ordinary share capital of Renold plc.
On 13 June 2025, MPE Bid Co made a formal offer to acquire the entire issued
and to be issued ordinary share capital of Renold plc at 82 pence per ordinary
share.
JIM HAUGHEY
GROUP Finance Director
9 July 2025
Principal Risks and Uncertainties
The Directors have reconsidered the principal risks and uncertainties of the
Group.
Details of the risks and associated risk management processes, including
financial risks, can be found in the 2025 Annual Report, which be made
available at www.Renold.com
(https://url.uk.m.mimecastprotect.com/s/derlC19v2T6ZPWWIGQ8PG?domain=renold.com)
.
The risks referred to and which could have a material impact on the Group's
ongoing financial performance, are as follows:
· Macroeconomic and political volatility;
· Strategy execution;
· Product liability;
· Health and safety in the workplace;
· Security and effective deployment and utilisation of information technology
systems;
· Prolonged loss of a major manufacturing site;
· People and change;
· Liquidity, foreign exchange and banking arrangements;
· Pension deficit; and
· Legal, financial and regulatory compliance
Consolidated income statement
for the year ended 31 March 2025
Note 2025 2024
£m £m
Revenue 1 245.1 241.4
Operating costs 2 (216.6) (210.9)
Operating profit 28.5 30.5
Finance costs 3 (7.9) (7.6)
Profit before tax 20.6 22.9
Taxation 4 (5.5) (5.8)
Profit for the financial year 15.1 17.1
Earnings per share 5
Basic earnings per share 7.6p 8.3p
Diluted earnings per share 6.6p 7.3p
Basic adjusted earnings per share(1) 9.0p 7.8p
Diluted adjusted earnings per share(1) 7.8p 6.9p
(1) Definitions of adjusted measures are provided in alternative performance
measures in Note 20.
All results are from continuing operations.
Consolidated statement of comprehensive income
for the year ended 31 March 2025
2025 2024
£m £m
Profit for the financial year 15.1 17.1
Items that may be reclassified to the income statement in subsequent years:
Exchange differences on translation of foreign operations (3.6) (4.0)
Gain on hedges of the net investment in foreign operations 0.4 0.5
Cash flow hedges:
Loss arising on cash flow hedges during the year (0.4) (0.3)
Less: Cumulative gain/(loss) arising on cash flow hedges reclassified to 0.3 (0.2)
profit or loss
Income tax relating to items that may be reclassified subsequently to profit - 0.1
or loss
(3.3) (3.9)
Items not to be reclassified to the income statement in subsequent years:
Remeasurement gains on retirement benefit obligations 6.0 1.4
Tax on remeasurement gains on retirement benefit obligations - excluding (1.1) (0.4)
impact of statutory rate change
4.9 1.0
Other comprehensive gain/(loss) for the year, net of tax 1.6 (2.9)
Total comprehensive income for the year, net of tax 16.7 14.2
Consolidated balance sheet
as at 31 March 2025
2025 2024
Note £m £m
ASSETS
Non-current assets
Goodwill 7 34.0 29.3
Intangible assets 8 19.3 11.5
Property, plant and equipment 9 62.5 56.1
Right-of-use assets 10 19.6 15.1
Deferred tax assets 4.9 7.7
140.3 119.7
Current assets
Inventories 11 67.2 60.6
Trade and other receivables 12 48.2 39.8
Current tax 1.0 0.1
Derivative financial instruments - -
Cash and cash equivalents 13 22.0 17.8
138.4 118.3
TOTAL ASSETS 278.7 238.0
LIABILITIES
Current liabilities
Borrowings 14 (3.0) (3.8)
Trade and other payables 15 (61.2) (53.7)
Lease liabilities 10 (2.5) (2.3)
Current tax (6.2) (8.6)
Derivative financial instruments (0.2) (0.3)
Provisions 16 (1.0) (1.6)
(74.1) (70.3)
NET CURRENT ASSETS 64.3 48.0
Non-current liabilities
Borrowings 14 (63.3) (38.4)
Preference stock 14 (0.5) (0.5)
Trade and other payables 15 - -
Lease liabilities 10 (17.3) (12.8)
Deferred tax liabilities (5.1) (3.7)
Retirement benefit obligations (47.0) (57.1)
Provisions 16 (4.0) (5.0)
(137.2) (117.5)
TOTAL LIABILITIES (211.3) (187.8)
NET ASSETS 67.4 50.2
EQUITY
Issued share capital 11.3 11.3
Currency translation reserve 4.8 8.0
Other reserves (8.5) (8.8)
Retained earnings 59.8 39.7
TOTAL SHAREHOLDERS' FUNDS 67.4 50.2
Approved by the Board on 9 July 2025 and signed on its behalf by:
Robert Purcell Jim Haughey
CHIEF EXECUTIVE FINANCE DIRECTOR
Consolidated statement of changes in equity
for the year ended 31 March 2025
Share capital Retained earnings Currency translation reserve Other reserves Total shareholders' funds
£m £m £m £m £m
At 31 March 2023 11.3 20.8 11.5 (4.5) 39.1
Profit for the year - 17.1 - - 17.1
Other comprehensive income/(loss) - 1.0 (3.5) (0.4) (2.9)
Total comprehensive income/(loss) for the year - 18.1 (3.5) (0.4) 14.2
Own shares purchased - - - (4.5) (4.5)
Settlement of share schemes - (0.6) - 0.6 -
Share based payments - 1.4 - - 1.4
At 31 March 2024 11.3 39.7 8.0 (8.8) 50.2
Profit for the year - 15.1 - - 15.1
Other comprehensive income/(loss) - 4.9 (3.2) (0.1) 1.6
Total comprehensive income/(loss) for the year - 20.0 (3.2) (0.1) 16.7
Settlement of share schemes - (0.4) - 0.4 -
Share based payments - 1.5 - - 1.5
Dividends paid during the year - (1.0) - - (1.0)
At 31 March 2025 11.3 59.8 4.8 (8.5) 67.4
Included in retained earnings is £5.2m (31 March 2024: £3.9m) relating to a
share option reserve.
The other reserves include Renold shares held by the Renold plc Employee
Benefit Trust. The Renold Employee Benefit Trust holds Renold plc shares and
satisfies awards made under various employee incentive schemes when issuance
of new shares is not appropriate.
At 31 March 2025 26,198,883 (31 March 2024: 27,583,116) ordinary shares of 5p
each were held by the Renold Employee Benefit Trust and, following
recommendations by the employer, are provisionally allocated to satisfy awards
under employee incentive schemes. The market value of these shares at 31 March
2025 was £10.8m (31 March 2024: £10.3m).
Consolidated statement of cash flows
for the year ended 31 March 2025
2025 2024
Note £m £m
Cash flows from operating activities 17
Cash generated from operations 32.0 36.0
Income taxes paid (7.0) (3.8)
Net cash flow from operating activities 25.0 32.2
Cash flows used in investing activities
Proceeds from property disposals 0.2 0.1
Cash outflow on disposal of right-of-use assets (0.2) (0.6)
Purchase of property, plant and equipment (11.8) (8.3)
Purchase of intangible assets (1.5) (1.3)
Consideration paid for acquisitions net of cash acquired 18 (22.1) (4.7)
Net cash flow used in investing activities (35.4) (14.8)
Cash flows from financing activities
Repayment of principal under lease liabilities (3.0) (2.5)
Finance costs paid (5.1) (4.5)
Own shares purchased - (4.5)
Dividends paid (1.0) -
Proceeds from borrowings 45.6 58.8
Repayment of borrowings (20.7) (67.4)
Net cash flow from/(used in) financing activities 15.8 (20.1)
Net increase/(decrease) in cash and cash equivalents 5.4 (2.7)
Net cash and cash equivalents at beginning of year 14.1 17.5
Effects of exchange rate changes (0.4) (0.7)
Net cash and cash equivalents at end of year 13 19.1 14.1
Accounting policies
Basis of preparation
The financial information included within this announcement does not
constitute statutory accounts within the meaning of Section 435 of the
Companies Act 2006. The financial information for the year ended 31 March 2025
has been extracted from the statutory accounts on which an unmodified audit
opinion, with a material uncertainty on going concern has been issued.
The statutory accounts for the year ended 31 March 2025 have been authorised
for issue and signed by the Board of Directors at the time of this
announcement. They are expected to be published on or before 21 August 2025
and will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
Going concern
The financial statements have been prepared on a going concern basis. In
determining the appropriate basis of preparation of the financial statements,
the Directors are required to consider whether the Group can continue in
operational existence for the foreseeable future.
Further information in relation to the Group's business activities, together
with the factors likely to affect its future development, performance and
financial position, liquidity, cash balances and borrowing facilities is set
out in the Strategic Report section of the Annual Report. In addition, the
financial statements within the Annual Report include the Group's objectives,
policies and processes for managing its capital, its financial risk management
objectives, details of its financial instruments and hedging activities and
its exposure to foreign exchange, credit and interest rate risk.
The key covenants attached to the Group's multi-currency revolving credit
facility relate to leverage (net debt to EBITDA, maximum 3.0x) and interest
cover (minimum 4.0x), which are measured in line with definitions laid out
within the banking covenants, and on a post IFRS 16 basis for both EBITDA and
bank debt. The Group regularly monitors its financial position to ensure that
it remains within the terms of its banking covenants. The Group's net debt
increased by £19.9m to £44.8m (31 March 2024: £24.9m), following the
acquisition of Mac Chain (£23.8m). The Group has accordingly remained within
the borrowing covenant levels throughout the year ended 31 March 2025. On 23
April 2025 the Group renewed its core banking facility that was due to mature
in May 2026, the existing facilities have been amended and extended by a
period of two years until May 2028. The facility has been increased to
£105.0m from £85.0m. The principal banking covenants and other key terms
remain unchanged.
Given the current level of macroeconomic uncertainty stemming from Covid-19,
inflation, the global supply chain crisis, geopolitical risks and tariffs, and
being also mindful of the risk matrix disclosed in the section on principal
risks and uncertainties, the Group has performed financial modelling of future
cash flows. The Board has reviewed the cash flow forecasts, which cover a
period of 12 months from the approval of the 2025 Annual Report, and which
reflect forecasted changes in revenue across the Group's business units. The
impact of tariffs has been considered as part of these forecasts, based on
information known at the time. Tariffs are not expected to have a material
impact on going concern, largely due to the Group's ability to manufacture in
the US and switch production between manufacturing sites in various countries.
A reverse stress test has been performed on the forecasts to determine the
extent of downturn which would result in a breach of covenants. Revenue would
have to reduce by 33% over the period under review for the Group to breach the
interest cover covenant under the terms of its borrowing facility. The reverse
stress test does not take into account further mitigating actions which the
Group would implement in the event of a severe and extended revenue decline,
such as reducing discretionary spend and capital expenditure. This assessment
indicates that the Group can operate within the level of its current
facilities, as set out above, without the need to obtain any new facilities
for a period of not less than 12 months from the date of this report.
Material uncertainty as to going concern
On 13 June 2025, MPE Bid Co, a company majority-owned by a fund managed and
controlled by Morgenthaler Private Equity ("MPE") announced a firm intention
to acquire the issued, and to be issued, ordinary share capital of Renold plc
in accordance with Rule 2.7 of the Takeover Code. The Directors of Renold plc
highlight the following points:
1 Whilst the Directors have not had direct visibility of MPE's post
completion funding for the Group, they have placed reliance on the
certification made by both MPE and their financial advisors that sufficient
financial resources are available for the transaction to be completed.
2 The Directors of Renold plc have had no visibility of the strategic
plans for the Group post transaction, and as such are unable to certify for a
12 month period post the date of these accounts that the Group post completion
can continue for a period of 12 months from the date of this report.
3 The announcement of the acquisition qualifies as an event or condition
that indicates that a material uncertainty exists that may cast significant
doubt upon the Group and Parent Company's ability to continue as a going
concern, under its current structure.
Following this assessment, and subject to the material uncertainty stated
above, the Directors are satisfied that the Group has sufficient resources to
continue in operation for a period of not less than 12 months from the date of
this report. Accordingly, they continue to adopt the going concern basis in
relation to this conclusion and preparing the consolidated financial
statements. There are no key sensitivities identified in relation to this
conclusion. The financial statements do not include any adjustments that would
be required if the financial statements were prepared on a basis other than
that of a going concern.
Notes to the consolidated financial statements
1. Segmental information
For management purposes, the Group is organised into two operating segments
according to the nature of their products and services and these are
considered by the Directors to be the reportable operating segments of Renold
plc as shown below:
• The Chain segment manufactures and sells power transmission and
conveyor chain and also includes sales of torque transmission products through
Chain National Sales Companies (NSCs); and
• The Torque Transmission segment manufactures and sells torque
transmission products, such as gearboxes and couplings.
No operating segments have been aggregated to form the above reportable
segments.
The Chief Operating Decision Maker (CODM) for the purposes of IFRS 8
'Operating Segments' is considered to be the Board of Directors of Renold plc.
Management monitor the results of the separate reportable operating segments
based on operating profit and loss which is measured consistently with
operating profit and loss in the consolidated financial statements. The same
segmental basis applies to decisions about resource allocation. Disclosure has
been included in respect of working capital as opposed to operating assets of
each segment as this is the measure reported to the CODM on a regular basis.
However, Group finance costs, retirement benefit obligations and income taxes
are managed on a Group basis and therefore are not allocated to operating
segments. Transfer prices between operating segments are on an arm's length
basis in a manner similar to transactions with third parties.
Chain(2) Torque Transmission Head office costs and eliminations Consolidated
Year ended 31 March 2025 £m £m £m £m
Revenue
External customer - transferred at a point in time 194.6 44.3 - 238.9
External customer - transferred over time - 6.2 - 6.2
Inter-segment(1) 0.7 4.3 (5.0) -
Total revenue 195.3 54.8 (5.0) 245.1
Operating profit/(loss) 29.5 10.9 (11.9) 28.5
Finance costs (7.9)
Profit before tax 20.6
Taxation (5.5)
Profit after tax 15.1
Other disclosures
Working capital(3) 52.0 5.7 (3.5) 54.2
Capital expenditure(4) 9.7 5.5 1.2 16.4
Total depreciation and amortisation 8.4 1.8 2.0 12.2
1. Segmental information (continued)
Chain(2) Torque Transmission Head office costs and eliminations Consolidated
Year ended 31 March 2024 £m £m £m £m
Revenue
External customer - transferred at a point in time 191.9 45.3 - 237.2
External customer - transferred over time - 4.2 - 4.2
Inter-segment(1) 0.9 4.0 (4.9) -
Total revenue 192.8 53.5 (4.9) 241.4
Operating profit/(loss) 32.8 8.4 (10.7) 30.5
Finance costs (7.6)
Profit before tax 22.9
Taxation (5.8)
Profit after tax 17.1
Other disclosures
Working capital(3) 43.4 11.0 (7.7) 46.7
Capital expenditure(4) 5.3 2.4 1.3 9.0
Total depreciation and amortisation 7.1 1.7 2.0 10.8
1. Inter-segment revenues are eliminated on consolidation.
2. Included in Chain external sales is £7.0m (2024: £6.9m) of Torque
Transmission product sold through the Chain NSCs, usually in countries where
Torque Transmission does not have its own presence.
3. The measure of segment assets reviewed by the CODM is total working capital,
defined as inventories and trade and other receivables, less trade and other
payables. Working capital is also measured as a ratio of rolling annual sales.
4. Capital expenditure consists of additions to property, plant and equipment and
intangible assets.
In addition to statutory reporting, the Group reports certain financial
metrics on an adjusted basis (alternative performance measures, APMs).
Definitions of adjusted measures, and information about the differences to
statutory metrics are provided in Note 20. Current year adjusting items
include a £1.6m (2024: £1.0m) of amortisation of acquired intangibles,
£0.4m (2024: £nil) of Valencia flood impact, £0.6m of unwind on fair value
of inventory on acquisition (2024: £nil), £1.6m (2024: £0.5m) of
acquisition costs, £0.5m income (2024: £nil) relating to the release of a
dilapidation provision on acquisition of leased property and £nil (2024:
£2.3m) income relating to assignment of lease and costs of closed sites.
Future performance obligations
The transaction price allocated to performance obligations that are
unsatisfied or partially unsatisfied at 31 March 2025 is £83.0m (2024:
£83.6m). This mostly comprises of the obligation to manufacture and supply
standard Group products. The majority of this revenue is recognised at a point
in time.
An amount of £24.6m (2024: £13.3m) relates to revenue from a small number of
large customer contracts, for which revenue is recognised over time in line
with progress against performance obligations. This revenue is expected to be
recognised over the next ten years (2024: over the next seven years).
Constant exchange rate results are current period results retranslated using
prior year exchange rates. A reconciliation is provided below and in Note 20.
Chain Torque Transmission Head office costs and eliminations Consolidated
Year ended 31 March 2025 £m £m £m £m
Revenue
External customer - transferred at a point in time 194.6 44.3 - 238.9
External customer - transferred over time - 6.2 - 6.2
Inter-segment 0.7 4.3 (5.0) -
Foreign exchange retranslation 5.0 0.7 - 5.7
Total revenue at constant exchange rates 200.3 55.5 (5.0) 250.8
Operating profit/(loss) 29.5 10.9 (11.9) 28.5
Foreign exchange retranslation 0.7 0.1 - 0.8
Operating profit/(loss) at constant exchange rates 30.2 11.0 (11.9) 29.3
Segmental information (continued)
Geographical analysis of external sales by destination, non-current asset
location and average employee numbers
The UK is the home country of the parent company, Renold plc. The principal
operating territories, the proportions of Group external revenue generated
(customer location), external revenues, non-current assets (asset location)
and average employee numbers in each are as follows:
Revenue ratio External revenues Non-current assets Average
employee numbers
2025 2024 2025 2024 2025 2024 2025 2024
% % £m £m £m £m
United Kingdom 7.3 9.1 18.0 21.9 15.8 13.8 282 293
Rest of Europe 27.7 29.7 67.7 71.8 36.5 39.1 565 571
US & Canada 43.8 42.0 107.2 101.1 56.4 33.7 315 281
Australasia 11.9 10.5 29.2 25.4 6.8 6.9 135 138
China 4.1 4.0 10.1 9.7 13.3 13.4 228 227
India 3.6 3.2 8.9 7.8 6.6 5.1 331 330
Other countries 1.6 1.5 4.0 3.7 - - - -
100.0 100.0 245.1 241.4 135.4 112.0 1,856 1,840
All revenue relates to the sale of goods and services. No individual customer,
or group of customers, represents more than 10% of Group revenue (2024: None
more than 10%).
Non-current assets consist of goodwill, other intangible assets, right-of-use
assets and property, plant and equipment. Deferred tax assets are not included
above.
Employees are categorised as direct or indirect. The split of average employee
numbers are direct 1,070 (2024: 981) and indirect 786 (2024: 859).
2. Operating costs
Operating profit is stated after charging/(crediting):
2025 2024
£m £m £m £m
Change in finished goods and work in progress (6.2) (0.5)
Raw materials and consumables 86.4 81.1
Other external charges 36.0 37.5
Employee costs
Gross wages and salaries 69.3 67.0
Social security costs 9.9 9.7
Pension costs
- defined contribution 1.6 1.4
Share-based incentive plans (including related social security costs) 2.0 1.9
82.8 80.0
Depreciation of property, plant and equipment
- owned assets 6.3 6.1
- right-of-use assets 3.1 2.7
Amortisation of intangible assets 1.1 1.1
Amortisation of acquired intangible assets 1.6 1.0
Acquisition costs 1.6 0.5
Short-term leases and leases of low-value assets - plant and machinery 0.2 0.1
Profit on disposal of owned property, plant and equipment (0.1) -
Research and development expenditure 0.8 0.8
Auditor's remuneration 1.0 0.9
Net foreign exchange losses 0.6 0.7
Pension administration costs 0.9 1.2
Impact of Valencia flood 0.4 -
Unwind of fair value inventory uplift on acquisition 0.6 -
Release of dilapidation provision on acquisition of leased property (0.5) -
Non-recurring profit on disposal of right-of-use asset and associated lease - (2.3)
liability
Total operating costs 216.6 210.9
Valencia Flood
On Tuesday 29 October, Renold's manufacturing facility in Valencia was
impacted by extensive flooding. Although damage to manufacturing equipment was
significant, the Group carries business interruption and property damage
insurance. Thankfully no employees were hurt or injured by the flood and
Valencia distribution facility, representing approximately 70% of the Spanish
business, was not impacted. The costs relating to the flood and the associated
insurance income have, to date, been accounted for as follows:
Gross cost Allocation of insurance income Net
£m £m £m
Fixed asset impairment 2.3 (2.3) -
Margin shortfall covered by business interruption 1.0 (1.0) -
Direct clean-up costs 0.6 (0.6) -
Professional fees and insurance deductible 0.4 - 0.4
Insurance payments on account (1.4) 1.4 -
Insurance income accrued (2.5) 2.5 -
Total 0.4 - 0.4
The cost associated with the Valencia flood are as follows:
Fixed asset impairment - the net book value of production machinery that was
damaged due to the flood in the Valencia factory is £2.3m. The Group
insurance policy is split into two sections: the local policy, which provides
compensation for the net book value of assets destroyed and a separate Group
policy, which provides top up cover for the replacement cost of these assets,
with an potential recovery of £6.9m on a new for old basis if machinery
cannot be repaired or a suitable replacement found. As at year end the Group
is confident of recovering, as a minimum, the net book value of the damaged
assets from the local policy which are in advanced stages of discussion. The
claim for the Group element has been notified to the insurance company, but as
negotiations are in the early stages, we have not recognised the additional
income in respect of the top up policy, due to the uncertainty around whether
the assets can be repaired or replaced.
Business interruption - following the flood, the operating profit of the
Valencia factory was £1.0m below the prior year level for the same period.
The agreed mechanism for calculating the impact of the business interruption
claim is in excess of this amount, however, the Group expects, as at 31 March
2025, that as a minimum £1.0m will be recovered. The Group has not recognised
amounts in excess of this, due to uncertainty over the final negotiations.
Direct clean-up costs - the local insurance coverage allows for direct costs
incurred to be claimed. The Group received £1.4m of payments on account by
the end of the financial year to cover direct clean-up costs and deposits on
capital equipment replacement.
Professional fees and insurance deductible - the Group expects to incur
approximately £1.0m of professional fees and deductible costs in relation to
the full insurance claim. The Group has accrued a proportion of these costs in
line with the expected insurance proceeds recognised to date. The final amount
of fees and deductible recognised will be dependent on the level of the total
potential claim, currently expected to be in the region of £10.6m, if all
elements of the insurance claim are successful. Based on the current stage of
the claim negotiations, we believe that a reasonable estimate of the
recoverable amount based on the facts and circumstances at the balance sheet
date is to recognise £2.3m in respect of the property plant and equipment
which has been impaired, £1.0m of lost margin in the period following the
flood up to the year end, £0.6m in respect of incurred clean-up costs, offset
by £1.4m which has already been received from the local insurance policy as
an advance payment and £0.4m of accrued professional fees and insurance
excess which results in a total asset of £1.1m.
3. Finance costs
2025 2024
£m £m
Finance costs:
Interest payable on bank loans and overdrafts(1) 4.1 3.7
Interest expense on lease liabilities(1) 1.0 0.8
Amortised financing costs(1) 0.4 0.3
Loan finance costs 5.5 4.8
Net IAS 19 finance costs 2.4 2.7
Discount unwind on non-current trade and other payables - 0.1
Finance costs 7.9 7.6
(1) Amounts arising on financial liabilities measured at amortised cost.
4. Taxation
Analysis of tax charge in the year
2025 2024
£m £m
United Kingdom
UK corporation tax at 25% (2024: 25%) - 0.8
Overseas taxes
Corporation taxes 4.8 4.4
Adjustments in respect of prior periods (1.1) 1.0
Withholding taxes 0.2 0.3
Current income tax charge 3.9 6.5
Deferred tax
UK - origination and reversal of temporary differences 1.3 1.3
Overseas - origination and reversal of temporary differences 1.0 1.1
Adjustments in respect of prior periods 0.1 (0.7)
Movement in unprovided deferred tax balances (0.8) (2.4)
Total deferred tax charge/(credit) 1.6 (0.7)
Tax charge on profit on ordinary activities 5.5 5.8
2025 2024
£m £m
Tax on items taken to other comprehensive income
Deferred tax on changes in net pension deficits 1.1 0.4
Tax on fair value of derivatives direct to reserves - (0.1)
Tax charge in the statement of other comprehensive income 1.1 0.3
Factors affecting the Group tax charge for the year
The decrease in the current tax charge is attributable to reduced taxable
profits across the Group.
At 31 March 2025, the provision for open tax matters totalled £2.2m (31 March
2024: £1.8m).
The Group's tax charge in future years will be affected by the profit mix,
effective tax rates in the different countries where the Group operates and
utilisation of tax losses. A deferred tax liability of £0.4m is recognised on
the gross unremitted earnings of £35.7m of overseas subsidiaries in
accordance with IAS 12.39.
The actual tax on the Group's profit before tax differs from the theoretical
amount using the UK corporation tax rate as follows:
2025 2024
£m £m
Profit on ordinary activities before tax 20.6 22.9
Tax charge at UK statutory rate of 25% (2024: 25%) 5.2 5.7
Effects of:
Non-taxable income (0.1) (0.1)
Non-deductible expenditure 0.9 1.6
Movement in uncertain tax positions 0.8 -
Overseas tax rate differences 0.2 0.5
Adjustments in respect of prior periods (0.9) 0.3
Movement in unrecognised deferred tax (0.8) (2.5)
Withholding taxes 0.2 0.3
Total tax charge 5.5 5.8
4. Taxation (continued)
Effective tax rate
The effective tax rate of 27% (2024: 25%) is higher than the prevailing UK tax
rate of 25% (2024: 25%).
The increase in the effective tax rate is primarily driven by a change in the
profit mix across the Group, with higher profits in jurisdictions where the
prevailing tax rate is higher than the UK tax rate as well as an increase in
centrally held uncertain tax provisions and an increase in non-deductible
expenses relating to acquisition costs in the period.
Tax payments
Cash tax paid in the year was £7.0m (2024: £3.8m). The increase is
attributable to cash tax being paid in the period relating to historic years
where the tax returns were finalised and filed in the FY25 period and the
Group fully utilising available brought forward losses in both Germany and the
US.
5. Earnings per share
Earnings per share (EPS) is calculated by reference to the earnings for the
year and the weighted average number of shares in issue during the year as
follows:
2025 2024
Earnings Shares Per share amount Earnings Shares Per share amount
£m (thousands) (pence) £m (thousands) (pence)
Basic EPS - Profit attributed to ordinary shareholders 15.1 198,573 7.6 17.1 206,908 8.3
Effect of adjusting items, after tax:
Amortisation of acquired intangible assets 1.6 0.8 1.0 0.5
Acquisition costs 1.6 0.8 0.5 0.2
Release of dilapidation provision on acquisition of lease property (0.5) (0.2) - -
- Tax on release of dilapidation provision(1) 0.1 0.1 - -
Impact of Valencia flood 0.4 0.2 - -
- Tax impact of Valencia flood(1) (1.0) (0.5) - -
Unwind of fair value inventory uplift on acquisition 0.6 0.3 - -
- Tax impact of unwind of fair value inventory uplift on acquisition(1) (0.1) (0.1) - -
- Deferred tax triggered on acquisition(1) - - (1.0) (0.5)
Assignment of lease and cost of closed sites - - (2.3) (1.1)
- Tax on assignment of lease and cost of closed sites - - 0.8 0.4
Adjusted EPS 17.8 198,573 9.0 16.1 206,908 7.8
(1)During the current year, £1.0m of adjusting items after tax have been
recognised in relation to the impact of the Valencia flood, unwind of fair
value inventory uplift on acquisition and the release of dilapidation
provisions on acquisition of leased property. During the prior year, £1.0m of
deferred tax asset was recognised on brought forward tax losses for the
Group's Australian entity, triggered by the acquisition of the trading assets
of Davidson Chain PTY ("Davidson"). The acquisition resulted in a step change
in the profitability of the Australian business such that it is now probable
that taxable profits exist, against which previously unrecognised tax losses
and temporary differences can be utilised. Consistent with the amortisation of
acquired intangibles and other significant, non-recurring items, the deferred
tax credit has been excluded for the purposes of calculating adjusted EPS as
it represents a significant non-recurring and acquisition-related item.
Inclusion of the dilutive securities, comprising 29,041,022 (2024: 27,448,748)
additional shares due to share options, in the calculation of basic and
adjusted EPS changes the amounts shown above to 6.6p and 7.8p respectively
(2024: basic EPS 7.3p, adjusted EPS 6.9p).
The adjusted EPS numbers have been provided in order to give a useful
indication of underlying performance by the exclusion of adjusting items. Due
to the existence of unrecognised deferred tax assets there were no associated
tax credits on some of the adjusting items and in these instances adjusting
items are added back in full.
In accordance with IAS 33, the shareholding used in the calculation of EPS and
adjusted EPS, is adjusted for the weighted average shareholdings held within
the Renold Employee Benefit Trust.
6. Dividends
During 2025, Renold plc paid dividends of £1.0m (2024: £nil) to its equity
shareholders. This represents a payment of 0.5p per share (2024: nil per
share).
In light of the MPE Offer, announced on 13 June 2025, the Board has decided
not to declare a final dividend for the year ended 31 March 2025 ("FY25"), as
MPE has reserved the right to decrease the price per Renold share payable in
respect of the Acquisition for any dividend declared, made, paid or that
becomes payable by Renold on or prior to the effective date of the
Acquisition.
7. Goodwill
2025 2024
£m £m
Cost
At 1 April 32.9 31.7
Acquisition of subsidiary (Note 18) 5.7 1.8
Exchange adjustment (1.0) (0.6)
At 31 March 37.6 32.9
Accumulated amortisation and impairment
At 1 April 3.6 3.5
Exchange adjustment - 0.1
At 31 March 3.6 3.6
Carrying amount 34.0 29.3
Impairment testing
The Group performed its annual impairment test of goodwill at 31 March 2025
which compares the current book value to the recoverable amount from the
continued use or sale of the related business.
The recoverable amount of each Cash Generating Unit (CGU) has been determined
on a value-in-use basis, calculated as the net present value of cash flows
derived from detailed financial plans. All business units in the Group have
submitted a budget for the financial year ending 31 March 2026 and strategic
plan forecasts for the two financial years ending 31 March 2028. The budget
and strategic forecasts, which are subject to detailed review and challenge,
were approved by the Board. The Group prepares cash flow forecasts based on
these projections for the first three years, with years four and five
extrapolated based on known future events, recently observable trends and
management expectations. A terminal value calculation is used to estimate the
cash flows after year five. Sensitivity analysis has been performed including
a zero revenue growth scenario (with current year revenue modelled for all
future periods of the forecast) and a reverse stress test, to determine the
extent of downturn which would result in a potential impairment. Revenue would
have to reduce by 19% in the first year of the period under review (worse than
the decline seen during the Covid pandemic) for the first CGU containing
goodwill to require potential impairment. Under the reverse stress test the
first CGU with headroom that eliminated was India. The forecasts used for the
impairment review are consistent with those used in the Going Concern review.
The key assumptions used in the value-in-use calculations are:
• Sales: Forecast sales are built up with reference to expected
sales prices and volumes from individual markets and product categories based
on past performance, projections of developments in key markets and
management's judgement;
• Margins: Forecast margins reflect historical performance and
management's experience of each CGUs profitability at the forecast level of
sales including the impact of all completed restructuring projects. The
projections do not include the impact of future restructuring projects to
which the Group is not yet committed;
• Discount rate: Pre-tax discount rates have been calculated based
on the Group's weighted average cost of capital and risks specific to the CGU
being tested; and
• Long-term growth rates: As required by IAS 36, cash flows beyond
the period of projections are extrapolated using long-term growth rates
published by the Organisation for Economic Co-operation and Development for
the territory in which the CGU is based. The discount rates applied to the
cash flows of each of the CGUs are based on the risk-free rate for long-term
bonds issued by the government in the respective market. This is then adjusted
to reflect both the increased risk of investing in equities and the systematic
risk of the specific CGU (using an average of the betas of comparable
companies). These rates do not reflect the long-term assumptions used by the
Group for investment planning.
The Directors do not currently consider that any reasonably possible changes
to the key assumptions would reduce the recoverable amount to its carrying
value for any CGU. No impairment charge has been recognised in the current or
prior period for any CGU. The goodwill acquired in the year relating to Mac
Chain has been allocated to the Americas CGU.
7. Goodwill (continued)
Growth rates CGU discount rates Carrying values
(pre-tax)
2025 2024 2025 2024 2025 2024
Cash generating unit % % % % £m £m
Americas (Jeffrey Chain, Mac Chain) 2.0 2.1 13.9 12.7 25.9 20.8
Australia (Ace Chains, Davidson Chain) 2.3 2.3 10.9 10.4 2.0 2.2
India (Renold Chain) 6.5 6.3 18.1 15.9 1.6 1.7
Europe & China (Renold Tooth Chain, YUK) 1.4 1.2 14.8 15.1 4.5 4.6
34.0 29.3
8. Intangible assets
Customer orderbook Customer relationships Technical know-how Non-compete agreements Brand Computer software Total
£m £m £m £m £m £m £m
Cost
At 1 April 2023 0.3 10.0 0.2 1.8 - 21.4 33.7
Exchange adjustment - (0.2) - - - (0.3) (0.5)
Additions - - - - - 1.3 1.3
Recategorisation (Note 9) - - - - - 0.5 0.5
Disposals - - - - - (0.1) (0.1)
Acquisition of subsidiary - 0.7 - 0.4 - - 1.1
At 31 March 2024 0.3 10.5 0.2 2.2 - 22.8 36.0
Exchange adjustment (0.1) (0.6) - - - - (0.7)
Additions - - - - - 1.5 1.5
Acquisition of subsidiary (Note 18) - 8.8 - 0.3 0.4 - 9.5
At 31 March 2025 0.2 18.7 0.2 2.5 0.4 24.3 46.3
Accumulated amortisation and impairment
At 1 April 2023 0.3 4.9 0.2 0.2 - 17.2 22.8
Exchange adjustment - (0.3) - - - - (0.3)
Amortisation charge - 0.7 - 0.4 - 1.0 2.1
Disposals - - - - - (0.1) (0.1)
At 31 March 2024 0.3 5.3 0.2 0.6 - 18.1 24.5
Exchange adjustment (0.1) 0.1 - (0.1) - (0.2) (0.3)
Amortisation charge - 1.2 - 0.4 - 1.2 2.8
At 31 March 2025 0.2 6.6 0.2 0.9 - 19.1 27.0
Net book amount
At 31 March 2025 - 12.1 - 1.6 0.4 5.2 19.3
At 31 March 2024 - 5.2 - 1.6 - 4.7 11.5
During the year amounts have been recognised in accordance with IFRS 3 in
relation to customer lists, non-compete agreements and brands as a result of
the acquisition of Mac Chain (Note 18). The customer relationships acquired
have been valued using estimates of useful lives and discounted cash flows of
expected income, the non-compete agreements have been valued using the
comparative income differential method and the brans have been valued using
the discounted cash flows of expected income.
The prior year acquisition of the Davidson business resulted in the
recognition of amounts in relation to customer lists and non-compete
agreements. The remaining amounts recognised for customer relationships,
customer orderbook and technical know-how were acquired with the acquisition
of the Industrias YUK S.A business, Brooks business and the Tooth Chain
(Germany) business, of which the latter is now fully depreciated.
9. Property, plant and equipment
Land and buildings Plant and equipment Total
£m £m £m
Cost
At 1 April 2023 25.9 137.8 163.7
Exchange adjustment (0.9) (3.6) (4.5)
Additions 0.4 7.3 7.7
Disposals (0.2) (2.7) (2.9)
Recategorisation (Note 8) 0.7 (1.2) (0.5)
Acquisition of subsidiary - 0.1 0.1
At 31 March 2024 25.9 137.7 163.6
Exchange adjustment (0.5) (2.9) (3.4)
Additions 3.9 11.0 14.9
Disposals - (5.9) (5.9)
Recategorisation (0.2) 0.2 -
Acquisition of subsidiary (Note 18) - 1.0 1.0
At 31 March 2025 29.1 141.1 170.2
Accumulated depreciation and impairment
At 1 April 2023 8.9 98.0 106.9
Exchange adjustment (0.2) (2.5) (2.7)
Charge for the year 0.6 5.5 6.1
Disposals (0.2) (2.6) (2.8)
At 31 March 2024 9.1 98.4 107.5
Exchange adjustment (0.3) (1.9) (2.2)
Charge for the year 0.6 5.7 6.3
Disposals - (3.9) (3.9)
At 31 March 2025 9.4 98.3 107.7
Net book amount
At 31 March 2025 19.7 42.8 62.5
At 31 March 2024 16.8 39.3 56.1
Property, plant and equipment pledged as security for liabilities amounted to
£42.5m (2024: £35.2m).
Future capital expenditure
At 31 March 2025 capital expenditure contracted for but not provided for in
these accounts amounted to £2.9m (2024: £1.7m).
10. Leasing and right-of-use assets
Right-of-use assets
Land and buildings Plant and equipment Total
£m £m £m
Cost
At 1 April 2023 22.8 1.7 24.5
Exchange adjustment (0.5) - (0.5)
Additions 1.7 1.4 3.1
Recategorisation - (0.1) (0.1)
Disposals (4.4) (0.5) (4.9)
At 31 March 2024 19.6 2.5 22.1
Exchange adjustment (0.6) (0.1) (0.7)
Additions 2.4 1.0 3.4
Recategorisation (0.5) - (0.5)
Disposals (3.4) (0.5) (3.9)
Acquisition of subsidiary (Note 18) 5.5 - 5.5
At 31 March 2025 23.0 2.9 25.9
Accumulated depreciation and impairment
At 1 April 2023 7.1 0.9 8.0
Exchange adjustment (0.1) 0.1 -
Charge for the year 2.0 0.6 2.6
Recategorisation - (0.1) (0.1)
Disposals (3.0) (0.5) (3.5)
At 31 March 2024 6.0 1.0 7.0
Exchange adjustment (0.1) - (0.1)
Charge for the year 2.5 0.6 3.1
Recategorisation (0.5) - (0.5)
Disposals (2.7) (0.5) (3.2)
At 31 March 2025 5.2 1.1 6.3
Net book amount
At 31 March 2025 17.8 1.8 19.6
At 31 March 2024 13.6 1.5 15.1
Lease liabilities
2025 2024
£m £m
Maturity analysis - contractual undiscounted cash flows
Less than one year 3.5 2.9
One to two years 3.4 2.6
Two to five years 10.0 4.4
More than five years 9.8 11.2
Total undiscounted lease liabilities at 31 March 26.7 21.1
Less: Interest allocated to future periods (6.9) (6.0)
Lease liabilities included in the Consolidated Balance Sheet 19.8 15.1
Current 2.5 2.3
Non-current 17.3 12.8
Amounts recognised in profit or loss
2025 2024
£m £m
Interest on lease liabilities (1.0) (0.8)
Non-recurring profit on disposal of right-of-use asset and associated lease 0.5 2.3
liability
Expenses relating to short-term leases and leases of low-value assets (0.2) (0.1)
10. Leasing and right-of-use assets (continued)
Amounts recognised in the Consolidated Statement of Cash Flows
2025 2024
£m £m
Repayment of principal under lease liabilities 3.0 2.5
Repayment of interest on lease liabilities 1.0 0.8
Cash outflows in relation to short-term leases and leases of low-value assets 0.2 0.1
Total cash outflows for leases 4.2 3.4
11. Inventories
2025 2024
£m £m
Raw materials 10.9 8.9
Work in progress 8.0 7.2
Finished products and production tooling 48.3 44.5
67.2 60.6
Inventories pledged as security for liabilities amounted to £48.7m (2024:
£42.7m).
The Group expensed £86.4m (2024: £81.1m) of inventories during the period.
In the year to 31 March 2025, £1.6m (2024: £1.9m) was charged for the
write-down of inventory and £0.3m (2024: £1.5m) was released from inventory
provisions no longer required.
12. Trade and other receivables
2025 2024
£m £m
Trade receivables 38.6 33.2
Less: Loss allowance (0.4) (0.4)
Trade receivables: net(1) 38.2 32.8
Other receivables 6.1 3.0
Prepayments 3.9 4.0
48.2 39.8
(1) Financial assets carried at amortised cost.
The Group has no significant concentration of credit risk but does have a
concentration of translational and transactional foreign exchange risk in both
US Dollars and Euros; however, the Group hedges against these risks. The
carrying amount of trade and other receivables approximates their fair value.
Trade receivables are non-interest bearing and are generally on 30-90 days
terms. The average credit period on sales of goods is 52 days (2024: 51 days).
Other receivables largely relate to accrued insurance income resulting from
the Valencia flood and VAT. Given that the counterparties are insurers and
governments, no provision for loss allowance has been made. Included within
other receivables is a related party balance of £15k (FY24: £15k) in
relation to a share subscription for preference shares in Renold (Thailand)
Limited held by Timblick & Partners Limited, who provide annual corporate
secretarial services to Renold (Thailand) Limited.
The following table details the risk profile of trade receivables based on the
Group's provision matrix. As the Group's historical credit loss experience
does not show significantly different loss patterns for different customer
segments, the provision for loss allowance based on past due status is not
further analysed:
Trade receivables - days past due
At 31 March 2025 Not past due <30 days 30-60 days 60-90 days >90 days Total
Trade receivables: gross 33.5 4.0 0.5 0.2 0.4 38.6
Expected credit loss rate, % 0.3% 0.0% 0.3% 0.0% 61.1% 1.0%
Estimated gross carrying amount at default, £m 0.1 - - - 0.3
Lifetime expected credit loss, £m 0.4
12. Trade and other receivables (continued)
Trade receivables - days past due
At 31 March 2024 Not past due <30 days 30-60 days 60-90 days >90 days Total
Trade receivables: gross 27.8 3.6 0.5 0.5 0.8 33.2
Expected credit loss rate, % 0.3% 0.0% 0.2% 1.2% 43.1% 1.2%
Estimated gross carrying amount at default, £m 0.1 - - - 0.3
Lifetime expected credit loss, £m 0.4
The following table shows the movement in the lifetime expected credit losses;
there has been no change in the estimation techniques or significant
assumptions made during the current reporting period:
2025 2024
Loss allowance £m £m
At 1 April 0.4 0.8
Amounts written off as uncollectable - (0.4)
At 31 March 0.4 0.4
13. Cash and cash equivalents
In the Group cash flow statement, net cash and cash equivalents are shown
after deducting bank overdrafts as follows:
2025 2024
£m £m
Cash and cash equivalents 22.0 17.8
Less: Overdrafts (Note 14) (2.9) (3.7)
Net cash and cash equivalents 19.1 14.1
14. Borrowings
2025 2024
£m £m
Current borrowings:
Overdrafts (Note 13) 2.9 3.7
Capitalised costs (0.3) (0.3)
Bank loans 0.4 0.4
Current borrowings 3.0 3.8
Non-current borrowings:
Bank loans 63.4 38.8
Capitalised costs (0.1) (0.4)
Non-current borrowings 63.3 38.4
Preference stock 0.5 0.5
63.8 38.9
Total borrowings 66.8 42.7
The above loans form part of the Renold plc Group core banking facilities. The
UK banking facility matures in May 2026, therefore is classed as non-current
borrowings.
All financial liabilities above are carried at amortised cost.
Core banking facilities
On 23 April 2025, the Group renewed its core banking facility that was due to
mature in May 2026. The existing multi-currency revolving facility has been
amended and extended by a period of two years and will be in place until May
2028 and is fully committed and available until maturity. The existing
facility has been increased to £105.0m from the previous level of £85.0m and
will be provided by the existing banks: HSBC UK, Allied Irish Bank (GB), and
Citibank.
At the year end, the undrawn core banking facility was £21.3m (2024:
£45.9m). The Group also benefits from a UK overdraft and a number of overseas
facilities totalling £4.5m (2024: £5.0m) with availability at year end of
£1.5m. The Group pays interest at SONIA, SOFR, Euribor and CORRA plus a
variable margin in respect of the core banking facility. The average rate of
interest paid in the year was SONIA, SOFR, Euribor and CORRA plus 2.35% for
Sterling, Euro, US and Canadian Dollar denominated facilities (2024: plus
1.60% for Sterling, Euro and US Dollar denominated facilities).
The core banking facility is subject to two covenants, which are tested
semi-annually: net debt to EBITDA (leverage, maximum ratio 3.0 times) and
EBITDA to net finance charges (interest cover, minimum ratio 4.0 times).
Secured borrowings
Included in Group borrowings are secured borrowings of £66.7m (2024:
£42.9m). Security is provided by fixed and floating charges over assets
(including certain property, plant and equipment and inventory) primarily in
the UK, USA, Germany and Australia. Certain Group companies have provided
cross-guarantees in respect of these borrowings
Preference stock
At 31 March 2025, there were 580,482 units of preference stock in issue (2024:
580,482).
All payments of dividends on the preference stock have been paid on the due
dates. The preference stock has the following rights:
i. a fixed cumulative preferential dividend at the rate of 6% per annum
payable half yearly on 1 January and 1 July in each year;
ii. rank both with regard to dividend (including any arrears on the
commencement of a winding up) and return of capital in priority to all other
stock or shares in the Company, but with no further right to participate in
profits or assets;
iii. no right to attend or vote, either in person or by proxy, at any general
meeting of the Company or to have notice of any such meeting, unless the
dividend on the preference stock is in arrears for six calendar months; and
iv. no redemption entitlement and no fixed repayment date.
There is no significant difference between the carrying value of financial
liabilities and their equivalent fair value.
15. Trade and other payables
2025 2024
Current Non-current Current Non-current
£m £m £m £m
Trade payables(1) 23.8 - 16.2 -
Other taxation and social security(1) 2.8 - 3.3 -
Other payables(1) 3.3 - 7.9 -
Accruals(1) 31.3 - 26.3 -
61.2 - 53.7 -
(1) Financial liabilities carried at amortised cost.
Trade payables are non-interest bearing and are normally settled within 60-day
terms. The Group does have a concentration of translational foreign exchange
risk in both US Dollars and Euros; however, the Group hedges against this
risk.
The Group did not operate supplier financing or reverse factoring programmes
during the current or prior financial year.
The Directors consider that the carrying amount of trade payables approximates
to their fair value.
16. Provisions
Business restructuring Environmental and other provisions Total provisions
Dilapidations
£m £m £m £m
At 1 April 2024 0.9 2.7 3.0 6.6
Arising during the year - 0.1 - 0.1
Utilised in the year (0.5) - - (0.5)
Disposed - (1.1) - (1.1)
(Released)/charged during the year (0.2) - 0.1 (0.1)
At 31 March 2025 0.2 1.7 3.1 5.0
2025 2024
Allocated as: £m £m
Current provisions 1.0 1.6
Non-current provisions 4.0 5.0
5.0 6.6
Business restructuring
During the year ended 31 March 2025, a provision was recognised for legal and
redundancy costs in relation to the reduction of headcount within a number of
the Groups locations, especially within mainland Europe. Despite a number of
the legal processes involved with this restructuring being lengthy, it is
anticipated that the provision will be utilised within the next 12 months
(£0.2m).
Environmental and other provisions
During the year ended 31 March 2025, a provision was recognised for
environmental costs in relation to a number of the Group's closed sites,
including sites within both the UK and France. It is anticipated that the
provision recorded will be utilised over a number of future years, accordingly
the majority of the provision is recorded as non-current (£2.3m).
During the year ended 31 March 2025, a provision was recognised for
anticipated costs relating to customer claims concerning products supplied by
the Group. It is anticipated that the provision will be utilised within the
next 12 months (£0.8m). The claims could result in a range of outcomes from
£0.3m to £1.4m.
Dilapidations
Provisions are recognised in relation to contractual obligations to reinstate
leasehold properties to the state of repair specified in the property lease.
The provision includes costs, as required within the lease, to rectify or
reinstate modifications to the property and to remediate general wear and tear
incurred to the balance sheet date. The provision to rectify or reinstate
modifications is recognised on inception, with a corresponding fixed asset
that is depreciated in line with the underlying asset. The provision to
rectify general wear and tear is recognised as it is incurred over the life of
the lease.
The provision is assessed based on the expected cost at the balance sheet
date, using recent cost estimates from suitably qualified property
professionals. These estimates are adjusted to reflect the impact of inflation
between the date of assessment and the expected timing of the payments, and
are then discounted back to present value. A range of inflation and discount
rates have been used in order to best reflect the circumstances of the lease
to which the dilapidation obligation relates. The inflation rate applied
ranges from 2.9% to 4.5% and the discount rate ranges from 3.9% to 5.5%. These
rates are most notably impacted by the country of lease and length of lease.
The majority of the dilapidation provision relates to cash outflows which are
expected to take place at the end of each respective lease term; none of which
are expected to end within the next 12 months. The associated outflows are
estimated to arise over a period of up to 21 years from the balance sheet
date. As a result substantially all of the provision is classed as non-current
(£1.7m).
17. Additional cash flow information
Reconciliation of operating profit to net cash flows from operations:
2025 2024
£m £m
Cash generated from operations:
Operating profit from continuing operations 28.5 30.5
Depreciation of property, plant and equipment - owned assets 6.3 6.1
Depreciation of property, plant and equipment - right-of-use assets 3.1 2.6
Amortisation of intangible assets 2.8 2.1
Loss on disposals of plant and equipment 1.8 -
Profit on disposals of right-of-use assets - (2.4)
Share-based payments 1.5 1.4
Increase in inventories (1.1) -
(Increase)/decrease in receivables (5.9) 2.9
Increase/(decrease) in payables 2.7 (2.7)
(Decrease)/increase in provisions (1.6) 1.5
Cash contribution to pension schemes (6.1) (6.0)
Cash generated from operations 32.0 36.0
Reconciliation of net change in cash and cash equivalents to movement in net
debt:
2025 2024
£m £m
Increase/(decrease) in cash and cash equivalents (Consolidated Statement of 5.4 (2.7)
Cash Flows)
Change in net debt resulting from cash flows
- Proceeds from borrowings (45.6) (58.8)
- Repayment of borrowings 20.7 67.4
Foreign currency translation differences - (0.7)
Non-cash movement on capitalised finance costs (0.4) (0.3)
Change in net debt during the period (19.9) 4.9
Net debt at start of year (24.9) (29.8)
Net debt at end of year (44.8) (24.9)
Net debt comprises:
Cash and cash equivalents (Note 13) 22.0 17.8
Total borrowings (Note 14) (66.8) (42.7)
(44.8) (24.9)
17. Additional cash flow information (continued)
The table below details changes in the Group's liabilities arising from
financing activities, including both cash and non-cash changes. Assets and
liabilities arising from financing activities are those for which cash flows
were, or future cash flows will be, classified in the Group's consolidated
cash flow statement as cash flows from financing activities.
Opening balance Accrued interest Financing cash flows New leases Lease disposal Net debt acquired Other non-cash changes(1) Closing balance
2025 £m £m £m £m £m £m £m £m
Bank loans (Note 14) 39.2 4.1 20.9 - - - (0.4) 63.8
Capitalised costs (Note 14) (0.7) - (0.1) - - - 0.4 (0.4)
Preference stock (Note 14) 0.5 - - - - - - 0.5
Lease liabilities (Note 10) 15.1 1.0 (4.0) 8.9 (0.9) - (0.3) 19.8
Total liabilities from financing activities 54.1 5.1 16.8 8.9 (0.9) - (0.3) 83.7
Overdrafts (Note 14) 3.7 2.9
Less: Lease liabilities (Note 10) (15.1) (19.8)
Total borrowings (Note 14) 42.7 66.8
Add: Cash and cash equivalents (Note 13) (17.8) (22.0)
Net debt 24.9 44.8
(1) Non-cash changes include the amortisation of capitalised finance costs and
foreign exchange translation.
Opening balance Accrued interest Financing cash flows New leases Lease disposal Net debt acquired Other non-cash changes(1) Closing balance
2024 £m £m £m £m £m £m £m £m
Bank loans (Note 14) 46.8 3.7 (10.8) - - - (0.5) 39.2
Capitalised costs (Note 14) - - (1.0) - - - 0.3 (0.7)
Preference stock (Note 14) 0.5 - - - - - - 0.5
Lease liabilities (Note 10) 20.2 0.8 (3.3) 3.1 (5.2) - (0.5) 15.1
Total liabilities from financing activities 67.5 4.5 (15.1) 3.1 (5.2) - (0.7) 54.1
Overdrafts (Note 14) 1.8 3.7
Less: Lease liabilities (Note 10) (20.2) (15.1)
Total borrowings (Note 14) 49.1 42.7
Add: Cash and cash equivalents (Note 13) (19.3) (17.8)
Net debt 29.8 24.9
(1) Non-cash changes includes the amortisation of capitalised finance costs
and foreign exchange translation.
18. Business combinations
During the period the Group acquired the trade and net assets of Mac Chain
Company Ltd (U.S.) and the entire issued share capital of Mac Chain Company
Limited (Canada), for a total cash consideration of US$30.9m (£23.8m). Of
which US$27.8m (£21.4m) was paid on the date of the acquisition with the
remaining US$3.1m (£2.4m) being deferred, US$1.57m (£1.2m) to be paid on 9
September 2025 and US$1.57m (£1.2m) on 9 September 2026. Mac Chain has
operations in the Pacific Northwest of the USA, British Columbia, and Quebec,
and is a manufacturer and distributor of high quality conveyor chain and
ancillary products, with a significant presence in the forestry and broader
industrial markets.
The transaction has been accounted for as a business combination under IFRS 3
and is summarised below:
Recognised values on acquisition
£m
Fair value of net assets acquired:
Intangible assets 9.5
Property, plant and equipment 1.0
Right-of-use assets 5.5
Inventories 6.9
Trade and other receivables 3.3
Cash and cash equivalents 1.0
Trade and other payables (2.1)
Lease liabilities (5.5)
Provisions (0.1)
Deferred tax liabilities (1.4)
Net identifiable assets and liabilities 18.1
Goodwill 5.7
Total consideration 23.8
Consideration:
Cash consideration 21.4
Deferred consideration 2.4
Total consideration transferred/to be transferred 23.8
Net cash outflow arising on acquisition:
Cash consideration paid (21.4)
Add: cash and cash equivalents acquired 1.0
(20.4)
Increase in net debt arising on acquisition:
Net cash outflow arising on acquisition (20.4)
Less: Acquisition costs (1.3)
(21.7)
Acquisition related costs amounted to £1.6m and have been included in the
Income Statement. Only £1.3m of this was paid by the period end.
The gross contractual value of the trade and other receivables was £3.3m. The
best estimate at the acquisition date of the contractual cash flows not
expected to be collected was £nil.
Deferred consideration of £2.4m is payable within two years.
The goodwill arising on acquisition has been allocated to the Americas CGU and
is expected to be deductible for tax purposes. The goodwill is attributable
to:
• the anticipated profitability of the distribution of the Group's
services in new markets; and
• the synergies that can be achieved in the business combination
including management, processes and maximising site capacities.
The business was acquired on 9 September 2024 and contributed £9.3m revenue
and £1.3m adjusted operating profit for the period between the date of
acquisition and the balance sheet date.
If the acquisition had been completed on the first day of the financial
period, the acquisition would have contributed £17.0m to Group revenue,
£0.8m to Group operating profit and £1.9m to adjusted operating profit
(after adding back £0.5m amortisation of acquired intangibles and £0.6m
unwind of fair value inventory uplift on acquisition).
During the year deferred consideration of €2.0m (£1.7m) was also paid in
relation to the acquisition of the conveyor chain business of Industrias YUK
S.A. in the year ended 31 March 2023.
Total net cash outflow arising on acquisitions: £m
Mac Chain (20.4)
Industrias YUK S.A. (1.7)
(22.1)
Total increase in net debt arising on acquisitions: £m
Mac Chain (21.7)
Industrias YUK S.A. (1.7)
(23.4)
19. Post balance sheet event
On 25 June 2025, the Group acquired the entire issued share capital of
Ognibene S.p.a. ("Ognibene") for a total cash consideration of €10.0m
(£8.4m). Ognibene is being acquired on a cash free, debt free basis, and will
consist of an initial cash consideration of €9.0m (£7.6m), followed by a
further cash payment of €1.0m (£0.8m), payable 12 months from the
anniversary of completion of the acquisition. Ognibene is a manufacturer and
distributor of high-quality transmission chain ("TRC") and ancillary products
servicing a range of end markets, including the packaging machinery,
distribution and food processing markets. The acquisition increases the
Group's access to the Italian, and wider Southern European market, allowing
Renold to improve its customer service offering by accommodating local
stocking of our complete chain range in Italy, which in turn will generate
manufacturing synergies between Ognibene and Renold's existing international
operations.
The book value of the net assets acquired is as follows:
Recognised values on acquisition
£m
Total net assets acquired 7.7
At the date of authorisation of these financial statements a detailed
assessment of the fair value of the identifiable net assets has not been
completed.
Management acknowledge there are disclosures under IFRS 3 that haven't been
made because of the timing of the acquisition in relation to the time of the
announcement, which doesn't allow sufficient time for the fair value
adjustments to be performed.
Fair value of consideration paid:
Consideration: £m
Cash consideration 7.6
Deferred consideration 0.8
Total consideration transferred/to be transferred 8.4
On 23 April 2025, the Group renewed its core banking facility that was due to
mature in May 2026. The existing multi-currency revolving facility has been
amended and extended by a period of two years and will be in place until May
2028 and is fully committed and available until maturity. The existing
facility has been increased to £105.0m from the previous level of £85.0m and
will be provided by the existing banks: HSBC UK, Allied Irish Bank (GB), and
Citibank.
On 21 May 2025, the Board of Renold confirmed that it has received two
separate unsolicited and non-binding all-cash proposals from a consortium
comprising Buckthorn Partners LLP and One Equity Partners IX, L.P, and Webster
Industries, Inc, a company majority-owned by a fund managed and controlled by
Morgenthaler Private Equity ("MPE"), to acquire the entire issued and to be
issued ordinary share capital of Renold plc.
On 13 June 2025, MPE Bid Co made a formal offer to acquire the entire issued
and to be issued ordinary share capital of Renold plc at 82p per ordinary
share.
20. Alternative performance measures
In order to provide users of the accounts with a clear and consistent
presentation of the performance of the Group's ongoing trading activity, the
Group uses various alternative performance measures (APMs), including the
presentation of the income statement in a three-column format with 'Adjusted'
measures shown separately from statutory items. Amortisation of acquired
intangibles, restructuring costs, discontinued operations and material one-off
items or remeasurements are included in a separate column as management seek
to present a measure of performance which is not impacted by material
non-recurring items or items considered non-operational. Performance measures
for the Group's ongoing trading activity are described as 'Adjusted' and are
used to measure and monitor performance as management believe these measures
enable users of the financial statements to better assess the trading
performance of the business. In addition, the Group reports sales and profit
measures at constant exchange rates. Constant exchange rate metrics exclude
the impact of foreign exchange translation, by retranslating the comparative
to current year exchange rates.
The APMs used by the Group include:
APM Reference Explanation of APM
• adjusted operating profit A Adjusted measures are used by the Group as a measure of underlying business
performance, adding back items that do not relate to underlying performance
• adjusted profit before taxation B
• adjusted EPS C
• return on sales D
• operating profit gearing D
• revenue at constant exchange rates E Constant exchange rate metrics adjusted for constant foreign exchange
translation and are used by the Group to better understand year on year
changes in performance
• adjusted operating profit at constant exchange rates F
• adjusted return on sales at constant exchange rates G
• EBITDA H EBITDA is a widely utilised measure of profitability, adjusting to remove
non-cash depreciation and amortisation charges
H
• adjusted EBITDA H
• operating cash flow H
• net debt I Net debt, leverage and gearing are used to assess the level of borrowings
within the Group and are widely used in capital markets analysis
• leverage ratio J
• gearing ratio K
• legacy pension cash costs L The cost of legacy pensions is used by the Group as a measure of the cash cost
of servicing legacy pension schemes
• average working capital ratio M Working capital as a ratio of rolling 12-month revenue is used to measure cash
performance and balance sheet strength
20. Alternative performance measures (continued)
APMs are defined and reconciled to the IFRS statutory measure as follows:
(A) Adjusted operating profit
Year ended 31 March 2025
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Operating profit 29.5 10.9 (11.9) 28.5
Add back/(deduct):
Amortisation of acquired intangible assets 1.6 - - 1.6
Acquisition costs - - 1.6 1.6
Impact of Valencia flood 0.4 - - 0.4
Unwind of fair value inventory uplift on acquisition 0.6 - - 0.6
Release of dilapidation provision on acquisition of leased property - (0.5) - (0.5)
Adjusted operating profit 32.1 10.4 (10.3) 32.2
Year ended 31 March 2024
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Operating profit 32.8 8.4 (10.7) 30.5
Add back/(deduct):
Amortisation of acquired intangible assets 1.0 - - 1.0
Acquisition costs - - 0.5 0.5
Assignment of lease and cost of closed sites (2.3) - - (2.3)
Adjusted operating profit 31.5 8.4 (10.2) 29.7
(B) Adjusted profit before taxation
2025 2024
£m £m
Profit before taxation 20.6 22.9
Add back/(deduct):
Amortisation of acquired intangible assets 1.6 1.0
Acquisition costs 1.6 0.5
Impact of Valencia flood 0.4 -
Unwind of fair value inventory uplift on acquisition 0.6 -
Release of dilapidation provision on acquisition of leased property (0.5) -
Assignment of lease and cost of closed sites - (2.3)
Adjusted profit before taxation 24.3 22.1
(C) Adjusted earnings per share
Adjusted EPS is reconciled to statutory EPS in Note 5.
(D) Return on sales and operating profit gearing
Year ended 31 March 2025
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Adjusted operating profit 32.1 10.4 (10.3) 32.2
Total revenue (including inter-segment sales) 195.3 54.8 (5.0) 245.1
Return on sales % 16.4% 19.0% - 13.1%
20. Alternative performance measures (continued)
Year ended 31 March 2024
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Adjusted operating profit 31.5 8.4 (10.2) 29.7
Total revenue (including inter-segment sales) 192.8 53.5 (4.9) 241.4
Return on sales % 16.3% 15.7% - 12.3%
Year ended 31 March 2025
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Adjusted operating profit - 2025 32.1 10.4 (10.3) 32.2
Adjusted operating profit - 2024 31.5 8.4 (10.2) 29.7
Year on year change in adjusted operating profit (a) 0.6 2.0 (0.1) 2.5
Total revenue (including inter-segment sales) - 2025 195.3 54.8 (5.0) 245.1
Total revenue (including inter-segment sales) - 2024 192.8 53.5 (4.9) 241.4
Year on year change in total revenue (b) 2.5 1.3 (0.1) 3.7
Adjusted operating profit gearing % ((a)/(b)) 24% 154% n/a 68%
Year ended 31 March 2024
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
Adjusted operating profit - 2024 31.5 8.4 (10.2) 29.7
Adjusted operating profit - 2023 27.2 5.4 (8.4) 24.2
Year on year change in adjusted operating profit (a) 4.3 3.0 (1.8) 5.5
Total revenue (including inter-segment sales) - 2024 192.8 53.5 (4.9) 241.4
Total revenue (including inter-segment sales) - 2023 202.4 48.8 (4.1) 247.1
Year on year change in total revenue (b) (9.6) 4.7 (0.8) (5.7)
Adjusted operating profit gearing % ((a)/(b)) -45% 64% n/a -96%
(E), (F) & (G) Revenue, adjusted operating profit and adjusted operating
profit margin at constant exchange rates
Year ended 31 March 2025
Chain Torque Transmission Head office costs and eliminations Consolidated
£m £m £m £m
External customer - transferred at a point in time 194.6 44.3 - 238.9
External customer - transferred over time - 6.2 - 6.2
Inter-segment 0.7 4.3 (5.0) -
Foreign exchange retranslation 5.0 0.7 - 5.7
Revenue at constant exchange rates 200.3 55.5 (5.0) 250.8
Adjusted operating profit 32.1 10.4 (10.3) 32.2
Foreign exchange retranslation 0.8 0.1 - 0.9
Adjusted operating profit at constant exchange rates 32.9 10.5 (10.3) 33.1
Return on sales at constant exchange rates % 16.4% 18.9% - 13.2%
20. Alternative performance measures (continued)
(H) EBITDA, adjusted EBITDA (earnings before interest, taxation, depreciation
and amortisation) and operating cash flow
2025 2024
£m £m
Statutory operating profit from continuing operations 28.5 30.5
Depreciation and amortisation 12.2 10.8
Share-based payments 1.5 1.4
EBITDA(1) 42.2 42.7
Add back/(deduct):
Profit on disposals of plant & equipment (0.1) -
Acquisition costs 1.6 0.5
Impact of Valencia flood 0.4 -
Unwind of fair value inventory uplift on acquisition 0.6 -
Release of dilapidation provision on acquisition of leased property (0.5) -
Assignment of lease and cost of closed sites - (2.3)
Adjusted EBITDA(1) 44.2 40.9
Inventories (Note 11) (1.1) -
Trade and other receivables (Note 12) (5.9) 2.9
Trade and other payables (Note 15) 2.7 (2.7)
Provisions (Note 16) (1.6) 1.5
Movement in working capital (5.9) 1.7
Purchase of property, plant and equipment (Consolidated Statement of Cash (11.8) (8.3)
Flows)
Purchase of intangible assets (Consolidated Statement of Cash Flows) (1.5) (1.3)
Proceeds from property disposals 0.2 0.1
Cash outflow on disposal of right-of-use assets (0.2) (0.6)
Net capital expenditure (13.3) (10.1)
Operating cash flow 25.0 32.5
(1) The calculation of EBITDA, adjusted EBITDA and operating cash flow
deliberately excludes an add back for the non-cash share-based payment charge
of £1.5m for the year (2024: £1.4m). This is done in order to ensure
consistency with the metrics used to assess performance against the annual
bonus plan targets.
(I) Net debt
Net debt is reconciled to the statutory balance sheet in Note 17.
(J) Leverage ratio
2025 2024
£m £m
Net debt (Note 17) 44.8 24.9
Adjusted EBITDA 44.2 40.9
Leverage ratio 1.0 x 0.6 x
(K) Gearing ratio
2025 2024
£m £m £m £m
Net debt (Note 17) 44.8 24.9
Equity attributable to equity holders of the parent 67.4 50.2
Net debt (Note 17) 44.8 24.9
Total capital plus net debt 112.2 75.1
Gearing ratio % 40% 33%
20. Alternative performance measures (continued)
(L) Legacy pension cash costs
2025 2024
£m £m
Cash contributions to pension schemes 5.5 5.5
Pension payments in respect of unfunded schemes 1.1 1.1
Scheme administration costs 0.5 0.5
7.1 7.1
(M) Average working capital ratio
2025 2024
£m £m
Inventories 67.2 60.6
Trade and other receivables 48.2 39.8
Trade and other payables (61.2) (53.7)
Total working capital 54.2 46.7
Average working capital(1) (a) 50.5 47.4
Revenue (b) 245.1 241.4
Average working capital ratio ((a)/(b)) 21% 20%
(1) Calculated as a simple average of the opening and closing balance sheet
working capital.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR RPMPTMTIMBJA