Another day, another profit warning. Small cap manufacturer Renold (RNO) adds itself to the swathe of businesses reporting tough trading conditions, sending shares 28% lower to 31p.
Volatility in order patterns across the world means sales at the global torque transmission and industrial chains producer are now expected to be 10% lower than the prior year at constant currencies.
That marks a deterioration in trading from the half-year stage when underlying revenue was around 7% lower.
Renold’s trading statement covers the period 1 October 2015 to 31 January 2016.
‘Our focus remains on getting the business into the right shape to withstand the current volatility and to deliver growth in the longer term,’ says chief executive Robert Purcell.
Cost reductions should mitigate some of the decline in sales and management guidance says operating profit for the full year will be around 13% lower.
There was a bit of a silver lining in Renold’s update – trading in January improved slightly year-on-year.
First quarter updates from other industrial engineers are well worth checking to see if conditions are starting to improve or if Renold’s result is a flash in the pan.