FAST-GROWING engineering services group Renew Holdings reported record half year results, boosted by its work on the Great Western main line to reconnect Devon and Cornwall to the rest of the UK after storms wreaked havoc on the rail line.
Leeds-based Renew said £22m of its half-year revenues came from work related to the exceptional weather conditions which battered the Western half of the country in February.
In Devon, 100 metres of sea wall was destroyed by the storms causing a significant stretch of the railway to collapse into the sea, leaving the West Country stranded.
Renew worked around the clock with Network Rail to restore the line in time for the Easter holidays, following eight weeks of painstaking repairs to the storm-ravaged railway.
Network Rail’s chief executive Mark Carne said: “Our army of engineers has done an amazing job of putting back together a railway that was ravaged by the elements.
“They have overcome every obstacle thrown at them, winning many battles along the way to restore this critical piece of the network, ahead of schedule, and in time for the Easter holi- days.”
Renew’s chief executive Brian May said: “The work was completed on time and the line re-opened on schedule. That project plus other emergency works have resulted in our rail business experiencing higher levels of activity than are likely to be recorded in the second half of the financial year.
“We were able to react very quickly. We put in a temporary wall to enable the trains to get moving again.
“It was a massive amount of work.”
He was speaking yesterday as Renew reported a 48 per cent rise in revenue to £225.8m and a 59 per cent leap in operating profits to £7.8m in the six months to March 31.
Renew, one of Yorkshire’s top share gainers last year, said it had achieved “excellent“ underlying organic growth together with good cash generation.
It added that its strong order book means the group is confident it will meet market expectations for the full financial year.
As well as Network Rail, Renew counts Sellafield nuclear plant and Northumbrian Water among its biggest clients.
Analysts welcomed the results.
Howard Seymour, at Numis, said: “Good interim results from Renew reflect very strong organic revenue and margin growth across all engineering services operations in the first half plus the positive impact of bad weather on Network Rail in the first half – demonstrating the importance of subsidiary Amco in emergency repair situations.
“Couple this with benefits from recent acquisitions and the strong cash profile, and we maintain our view that Renew’s growth profile remains one of the best in our universe and we accordingly raise our target price to reflect this and maintain a positive recommendation.”
Renew raised the interim dividend by 36 per cent to 1.5p.