Specialist engineering division lifts profit at Renew

Renew Holdings yesterday reported a 32 per cent rise in its first-half underlying operating profit, helped by a strong performance at its specialist engineering division.

The specialist construction and engineering services provider, which recently acquired Amco to expand its operations, expects margins to improve steadily, and revenue and operating profit to grow.

Leeds-based Renew Holdings, whose order book increased by 16 per cent to £334m, said it would continue to look for suitable acquisitions in the engineering sector.

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In February, Renew bought Amco Group Holdings for £19.8m from private equity house Endless to boost its profits and broaden its expertise.

The purchase accelerated Renew’s shift away from construction towards higher-margin specialist engineering.

Amco’s 700 staff grew Renew’s workforce to about 2,100. Its work does not overlap with Renew’s existing operations.

Renew secured a £15m debt facility from HSBC for the deal.

The company said yesterday: “2011 is a transformational year for the group as it repositions itself as a specialist provider of engineering support to UK infrastructure, particularly in the fields of energy, environmental and rail.”

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In March, Renew also revealed that it was closing its Northern construction business with the loss of about 120 jobs.

Its October to March underlying operating profit rose to £2.2m from £1.7m last year.

Revenue rose 12 per cent to £155.5m, while revenue in its specialist engineering division increased by 24 per cent.

The company’s specialist engineering division provides construction for rail operators, land remediation services and electrical fit outs for the nuclear sector.

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In a statement, the company said yesterday: “The integration of Amco is progressing well and in line with our expectations. The board is pleased to announce that Amco’s strategically important core frameworks with Network Rail have recently been renewed and extended to encompass a national service, including the south east region for the first time.”

Renew also announced the appointment of David Forbes as a non-executive director with effect from June 1. Mr Forbes worked at NM Rothschild & Son from 1989 until 2010, most recently as a managing director in its investment banking division.

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