Cost-cutting puts Renold back in black

COST cuts and redundancies have returned Renold Group, one of Britain's most famous industrial names, to profit.

The chains and gears manufacturer made pounds 1.2m before tax in the year to 3 April against pounds 3m losses last time. The group was once a household name for its bicycle chains.

Trading profits soared to pounds 4.6m from pounds 400,000, but redundancy costs ate up a further pounds 1.4m after pounds 1.6m in 1991/2. The workforce was reduced by 200 to a total of 2,700.

John Allan, finance director, said sales volumes were flat and the improved figures resulted mainly from reduced costs and better productivity.

'So far as the chains division is concerned, we have reached the end of a long reorganisation process during which we were continually taking out costs,' he said.

'We are now getting far more consistent results from chains, but there is still work to be done in other areas of the business and we are continually looking at costs.'

He added that trade had picked up in Australasia but remained weak in Europe, particularly in France, Germany and the Benelux countries.

There were some indications of stronger demand in the UK, and Mr Allan expected further benefits to flow from sterling's devaluation.

He said the company wanted to concentrate on the gears and chains business and expected to benefit from the growing market for automotive chains.

Renold makes chains for Nissan in Sunderland, Mercedes and BMW in Germany and General Motors and Chrysler in the US.

The dividend is held at 1p and the shares lost 1p to 60p.