Record annual results for Renew prompts an increase in dividend

The Leeds-based group said revenue rose 12 per cent to £520m and pre-tax profit increased 22 per cent to £20m in the year to September 30.

The group reported an 11 per cent improvement in operating margin to 3.9 per cent and said it is on track to deliver operating margins of 4.5 per cent by 2017.

Chief executive Brian May said: “It’s been another strong year. The growth in margin is the real achievement – that’s driving the bottom line.

“Our order book is at a record and we are in good shape for the year ahead.”

Renew is increasing its annual dividend by 40 per cent to 7.0p a share.

Finance director John Samuel said: “We are trying to keep cover at a constant level and we felt it was appropriate to up it. We come into the new year with some confidence.”

At the end of September, the group’s order book stood at £502m, a rise of 14 per cent on last year.

Renew said the order book reflects its established position in attractive markets with long-term revenue visibility.

“We are very responsive with clients. We do small tasks well and clients come back to us,” said Mr May.

“That’s what’s driving the business.”

The group has been highly acquisitive in the past, making six major acquisitions over the last nine years without tapping investors for cash, but no acquisitions were made this year.

However, it said it has seen a number of good quality potential acquisitions over the past few weeks.

“I’d be very disappointed if we don’t do an acquisition in the second half,” said Mr May.

Analyst Nick Spoliar at WH Ireland said: “Renew has delivered an excellent set of results, hitting our top of the range forecast. Acquisitions have helped, but organic growth in the Engineering Services division was 22 per cent, a very good result.”