Renew Holdings reveals packed order book

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ENGINEER Renew Holdings reported strong trading in its first quarter following a 27 per cent rise in its order book and a good performance in all its markets.

The Leeds-based group, which counts Sellafield nuclear plant, Northumbrian Water and Network Rail among its biggest clients, said its order book at the end of December stood at £433m, up from £340m last year.

The firm, Yorkshire’s third best share performer in 2013, said trading is well ahead of last year and this is expected to continue for the rest of the first half.

It reported a strong performance in its specialist engineering division, particularly so in infrastructure where its rail business reported record levels of activity.

In energy, revenue in nuclear was at record levels.

Renew’s chairman Roy Harrison told shareholders at the group’s annual general meeting yesterday that in the environmental market, its recently acquired water subsidiary Lewis is performing ahead of expectations, as is Seymour, its water business in the North East.

The group said that in its specialist building division, high quality residential and new build affordable housing both performed in line with expectations and potential future work lists offer “excellent opportunities”.

The engineering services order book stood at £306m at the end of December, up 25 per cent on the previous year.

Analyst Nick Spoliar, at WH Ireland, said: “Our pre-tax profit forecasts are upgraded for 2014 and 2015 on the back of the strong first quarter trading revealed in Renew’s AGM update this morning.

“Given the weighty order book, we believe further potential upside remains, and we note the growing cash on the balance sheet which augurs well for potential future earnings enhancing acquisitions.”