Renold returns to profit but looks set to close French facility

The company also warned of impending closures as part of its review of costs and manufacturing operations. Formal discussions with employee representatives on the future of the manufacturing arm of the Seclin facility in France could result in its closure and the loss of 20 people, Renold said. Also, a "warehouse consolidation project" is underway in the US. Chairman Matthew Peacock said: "The business is now enjoying the combined benefits of previous work to reduce the cost base and strong revenue growth in the first half. Order books are being replenished and the outlook for second half sales continues the positive trend. Profits have been generated consistently throughout the period and this will continue as further improvements are made to our cost base. The Group is very well placed to take advantage of improving markets and gains in market share." Peacock said the results – revenues up 17% to £92.9m and an operating profit of £2.9m compared to a loss of £3.7m for the same period last time – exceeded expectations as a result of recovering markets, new sales growth following recent investments in China and India and actions to reduce costs and resize the manufacturing footprint of the business over the last two years. Renold Chain, which generates three quarters of group revenue, saw sales increase by 31% with particularly strong growth in European, US, Chinese and Indian operations. Restructuring activities in previous years in the chain division combined with increased sales had created significantly improved profitability. Looking ahead, Renold said market conditions had improved and the strengthening order book provided confidence for the second half of the year. It expects the sales trends established in the first half to continue and promised it would "continue to actively manage our cost base and global manufacturing footprint". The implementation of a world-wide ERP system would also enhance the Group's ability to generate profits.