Engineering services group Renew delivers record results in face of inflationary pressures

Engineering services group Renew today revealed it had delivered record half year results, despite facing industry-wide material shortages and inflation.

Renew said its performance for the six months ended 31 March 2022 was boosted by a strong forward order book and robust balance sheet

During the period, group revenue increased to £414.3m, from £366.4m in the same period the year before. The group delivered an adjusting operating profit of £26.0m, which is an increase on the £22.0m recorded the year before.

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Engineering services group Renew today revealed it had delivered record half year results, despite facing industry-wide material shortages and inflation.

Paul Scott, CEO of Renew, commented: “The first six months of this financial year have presented a unique set of circumstances and the group’s record performance clearly demonstrate the resilient and differentiated nature of our business. Supported by the commercial terms within our frameworks, we continue to successfully manage the industry-wide material shortages and inflation challenges effectively, without any material impact on trading.

"We look to the future confident in the knowledge our strong market positions underpinned by long-term, non-discretionary spending cycles mean we are well positioned to take advantage of the UK Government’s pledge to invest £650bn in a green infrastructure-led recovery that will bring significant opportunities for Renew and our differentiated, diversified, low-risk business model.

"I would like to thank my colleagues across the entire Group for their hard work and continued commitment to our clients.

"Trading has started well in the second half of the year and we remain confident of achieving our full year expectations.”

Mr Scott said around one third of Renew's 4,500 staff are based in Yorkshire, adding: "We have made a great investment in Yorkshire. We are proud of our continuous commitment to training and development programmes; that protects us in terms of resource availability in future years."

He said there was "every chance" Renew would hire more staff in Yorkshire.

In a statement to accompany the results, Renew said it performed a critical role in keeping the nation's infrastructure functioning efficiently and safely.

It provides essential maintenance and engineering services, operating in regulated markets including rail, highways, mobile telecommunications, civil nuclear, water and environmental.

The statement added: "As part of the UK Government’s pledge to level up the economy and reach net zero carbon emissions by 2050, it has committed to a record £650bn investment in transforming the UK's infrastructure and we are continuing to benefit from an increased focus on maintaining and renewing assets as part of this shift.

"Renew has a vital role to play in supporting the green and sustainable infrastructure of the future and we continue to make progress on our own sustainability agenda."

"Our businesses are exposed to attractive long-term, non-discretionary structural growth drivers."

Renew said it would benefit from greater focus on sustainability and climate change, together with the creation of flood risk prevention measures and investment in decarbonisation through nuclear projects, renewables and electrification programmes.

Population growth and socio-economic trends will also increase the pressure on housing, energy, water and demand for natural resources, Renew said.

The statement added: "We continuously seek to develop and implement industry-leading innovations to improve operational performance including the introduction of bespoke plant-led technology to deliver cost, time and environmental improvements for routine maintenance and renewal activities for our clients.

"In 2021 we deployed the Rail MegaVac, a unique Road Rail Vehicle which significantly improves the capacity and efficiency of drain management operations on the rail network. We also introduced a UK first in the form of the Vegetation Compactor, which reduces noise pollution resulting in less disturbance to wildlife and neighbouring lineside properties.

"Following these successful launches, in 2022 we introduced the Forwarder V2, which has a mounted Mega Chipper which can process significantly larger trees and features a metal detector in its feed bed, an industry first for this type of machine, improving reliability and efficiency."

"Network Rail, a significant strategic customer for the Group, is investing £53bn over the current control period (CP6), which runs to 2024. This increased focus on operational support, renewal and maintenance plays to our strengths as does the Government’s commitment to its rail decarbonisation programme, including a significant investment in electrification, as part of the overall UK target to deliver net zero by 2050."