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Renew to axe 80 jobs in specialist building
CONSTRUCTION services company Renew Holdings is to axe 80 jobs and warned that conditions in the house building market have deteriorated considerably over the last few months.
The Leeds company is to make the 80 staff redundant at its specialist building division, the equivalent of 15 per cent of the division's workforce.
The job losses will be spread evenly across the North-East, North-West, South-West and Central London. The division covers social housing, retail, science and education, restoration and refurbishment.
Following the downturn in the house building market Renew is to switch its land remediation business away from the housebuilding sector and into the more robust regional civil engineering market. The land remediation arm clears land and makes it environmentally safe for construction.
The job losses and the realignment of the land remediation business will result in an exceptional charge of 1.5m to cover redundancy payments and other restructuring costs.
But the group said the move will result in a reduction of over 5m in annual costs.
Renew also warned that its non-specialised business, which covers developer-led and private sector construction, is likely to see weaker market conditions.
In spite of the gloomy predictions, the company said it expects underlying 2008 pre-tax profits to be in line with market expectations of 9.4m.
Group shares fell 12 per cent to close the day down 9p at 63.5p following the news of the job cuts and the deteriorating market conditions.
Analysts at Brewin Dolphin downgraded their stock rating on the company from "buy" to "hold". It said the company's management had taken decisive action to address the housing market challenges which will lead to reduced revenues in the short term, but will protect margins.
The broker is cutting the group's full-year 2009 pre-tax profit forecast by 25 per cent to 8.2m. Brewin Dolphin said that Renew's cash position remains strong and it sees clear longer term value in the firm, but in the current economic environment it sees limited short-term potential for the shares.
Renew also said it has completed the acquisition of County Durham-based C&A Pumps for 1.75m, including a freehold property independently valued at 800,000.
The group will announce annual results on November 26.
Renew has a number of high profile schemes in Yorkshire. It recently secured a 5.25m contract to build Yorkshire Forward's Yorkshire Environmental Energy Technology Centre, near Sheffield, which is aiming to have the lowest carbon footprint of any building in Britain.
It also won a coastal protection contract at Whitby Marina.
Two centuries of history
Renew Holdings, formerly Montpellier Group, has a history spanning over 200 years.
The company went public in 1968 and over the following years the group's activities have expanded to include a building division, plant hire operation, developments division, timber operation, and overseas interests in land development.
Following the appointment of Roy Harrison as chairman in 2004 and of Brian May as chief executive in 2005, the group was renamed Renew Holdings.
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Saturday 11 February 2012
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