Renold (RNO) chief executive Robert Purcell says there are signs of recovery in its engineering end-markets after a tough year in which sales dipped around 9%.

The world’s second-largest manufacturer of industrial chains posted revenue of £165.2 million in the year to 31 March and underlying operating profit of £14.2 million, down 8.2%.

Difficult industrial markets, hit by a slowdown in demand among mining and resources companies, are beginning to show signs of easing, Purcell said in an interview alongside results.

‘On revenue and current trading, we have said in our outlook that comparatives get a little easier in our second quarter [July to September],’ Purcell said.

‘Order intake we are seeing is consistent with that and so sales should start to level off around that time.’

Sales declined 6.5% for the year in Renold’s Chains unit and 16% in the smaller Torque Transmission division.

Underlying earnings per share at 4.7p was down 6%.

Profit declined less than sales because of cost-cutting initiatives completed under a set of management targets scheduled to be delivered by 2020.

They include increasing Renold’s operating profit margin to 10% from the current 8.6%.

‘The key thing for us to highlight is while it’s been a difficult year it’s been very productive and there are a lot of projects going on in the background’ Purcell said.

‘Top line growth has been tough but progress on our operating margin targets have been good.

‘Our belief in terms of where we want to get for 2020 remains even if it may be a little more difficult while markets are weak.’

Shares in Renold gained 1.2% to 41p.

Issue Date: 31 May 2016