‘Satisfactory’ second half for Renew

The Leeds-based company has increasingly been shifting its focus to engineering from construction.

Analysts at Brewin Dolphin said it has been a “year of significant progress for Renew following the transformational acquisition of energy and rail specialist Amco and the announcement of the full exit from general construction activities”.

Brewin analyst Michael Parkinson said: “Over 80 per cent of forecast profits now come from specialist engineering where demand is underpinned by regulatory drivers and committed expenditure plans.”

Renew’s shares slipped 0.5p to 57.97p last night.

“Renew has suffered badly in the recent market sell-off and in our view the current share price fails to reflect the improving resilience of the group’s earnings,” said Mr Parkinson.

When Renew bought Amco earlier this year from private equity house Endless for £20m, it said the deal would boost its profits and broaden its expertise.

The purchase accelerated Renew’s strategy of shifting away from construction towards higher-margin specialist engineering, which now make up more than 50 per cent of revenues.

Barnsley-based Amco’s clients include Network Rail, E-On, National Grid and Scottish & Southern Energy.

Rail work makes up about 52 per cent of its sales, with most projects “non-discretionary”. Its work includes repairing tunnels and shafts, refurbishing stations and installing electrical plant gear.