Following more difficult than expected trading in December and January compounded by the rapid fall of the US dollar, Renold plc announces that its underlying second half performance is likely to be similar to last year resulting in a pre-exceptional full year result lower than 2003, rather than the expected improvement as detailed in the half year statement.

Market conditions in Europe have weakened, particularly with distributors who support maintenance and repair business, and whilst there has been some improvement in US OEM markets, the recent substantial fall in the US dollar has adversely impacted margins.

The Automotive Systems business continues to make progress in improving production efficiencies but margins here have also been affected by the adverse US  dollar/Euro exchange rate movement.

Management continues to control costs tightly and maximise new product sales and new business opportunities.  As a result, forward orders for the core business in local currency terms have shown a strengthening over recent months.

Renold plc will announce its full year results for the year ending 3rd April 2004 in June 2004.