Record results for Renew as rail and water boost profits

Renew's chief executive Paul Scott said he was pleased to be presenting record results
Renew's chief executive Paul Scott said he was pleased to be presenting record results
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Engineering services group Renew Holdings ​reported record interim results with strong growth in both revenue and operating profit.​

The​ Leeds-based ​firm said it has a strong order book and ​it will increase the interim dividend by 13​ per cent.

Renew's chief executive Paul Scott said: "We are pretty pleased to be presenting record results, principally due to engineering services. Both rail and water have been strong in the first half."

Renew provides engineering support services to the UK’s water and sewer infrastructure networks as well as to flood alleviation and coastal protection programmes.

In the rail industry, it is a major provider of infrastructure services to Network Rail and undertakes a wide range of planned maintenance and renewals tasks alongside a 24/7 emergency reactive service across the rail network.

It also has a sizeable nuclear business and operates at 12 of the Nuclear Decommissioning Authority’s 17 nuclear licenced sites in the UK.

The investment required to clean up the UK’s nuclear legacy is estimated at £70bn and will take over 120 years to complete.

The largest of the sites on the decommissioning programme is Sellafield, which is currently allocated 73 per cent of this expenditure. Mr Scott said the scale of the decommissioning challenge there requires much of the work to be delivered through long-term programmes of work.

Renew said revenue rose 9 per cent to £289m in the six months to March 31 while pre-tax profit increased 11 per cent to £12m.

The group is looking for further acquisitions that would fit with its current operations. It said it was pleased with the integration of rail business Giffen, which it bought last year.

Analyst Nick Spoliar at WH Ireland said: "Renew has generated a positive set of first half results with double digit profit growth.

"Forecast revenues for 2017 are fully covered by the order book, which is up overall by 5 per cent in the key Engineering Services business at £435m.

"Water is benefiting strongly from the AMP6 cycle, and infrastructure (rail) remains strong, while nuclear continues to offer long-term opportunities.

"Net cash on the balance sheet is expected to stand at a healthy £4m to £5m at the year end. With the shares close to our current target price, we retain our market perform recommendation unchanged."