Shares in Renold PLC (AIM:RNO) rose by more than 7% in early trades after the company’s adjusted operating profits surged by 56% in the six months to 30 September 2023.
Renold said its adjusted operating profit grew to £15 million in the half year, up from £9.6 million a year earlier.
The AIM-listed manufacturer of chains, gears and couplings said it grew sales and profits after making progress on cost-reduction initiatives and capital investments such as its acquisition of Australian chain maker Davidson Chain.
It said it made an exceptional profit of £2.2 million from the assignment of a lease for a closed legacy site.
Revenues climbed 7.5%, or 10.7% at constant currency, year over year to £125.3 million for the half year.
The company said its return on sales increased by 370 basis points over the period to 12%.
Its order book stood at £83.6 million as of 30 September, less than the £99 million of orders it had under its belt a year earlier, due to shorter durations and a “normalisation of supply chains”.
Renold’s chief executive officer Robert Purcell said: "Sales, margins, profits and cash generation have all progressed well. Global markets continue to be uncertain and we remain vigilant for changes in patterns of demand beyond the current order book shortening.
“There remains uncertainty over the implication of global economic pressures in the medium term, however the board is increasingly confident in delivering a result for the current year ahead of previous market expectations."
Its share price peaked at 32.28p per share this morning, closing at about 30.39p each yesterday.