PROFITS at engineering group Renold have been wiped out by high steel prices and a strong Euro. The Wythenshawe-based firm has announced pre-tax losses of '6.8m to March 31, compared with profits of '4.7m in 2004, despite a six per cent rise in turnover from '192.1m to '197m.

Chief executive Bob Davies said that a 40 per cent increase in raw material prices and a poor exchange rate had knocked '5.5m off the company's turnover.

The firm was also hit by one-off costs of '4.3m for cutting 130 jobs at its Burton-upon-Trent factory and restructuring its business, and '2.4m following a strategic review of subsidiary Jones & Shipman.

Shareholders will not receive a final dividend because of reduced earnings and ongoing restructuring costs. Shares fell 2.9 per cent, or 1.5p, to 50p.

The group, which manufactures chains and gears used in rollercoasters, engines and London Tube station escalators, employs 900 staff in Britain and 2,600 across 18 countries.

Mr Davies confirmed that plans to transfer operations to low-cost countries, including Poland and the Far East, do not involve further undisclosed job cuts in the UK.

He said: "The last 12 months have been difficult. The chain business, whose products consist almost entirely of steel, have suffered the worst impact. We are pushing hard to combat increases in steel costs through increasing selling prices." Tweet