Strong demand pushes Renew’s results ahead of expectations

Engineering services group Renew Holdings said its annual results will be “materially ahead” of current market expectations following strong demand.
Renew workers clear fallen branches on a railway lineRenew workers clear fallen branches on a railway line
Renew workers clear fallen branches on a railway line

The Leeds-based group said that since the announcement of its half year results in May, it has delivered a strong trading performance, driven by ongoing demand for its critical asset maintenance and renewals services.

The firm said it has also seen operational progress across its diversified engineering services end markets.

Hide Ad
Hide Ad

Renew said its adjusted operating profit for the year to September 30 is expected to be no less than £50m versus a current consensus forecast of £45.8m.

It said that activity levels are being supported by long term regulatory spending and the positive outlook for UK infrastructure.

It added that the integration of the group’s two acquisitions during the period, Browne and REL, are proceeding to plan and trading is in line with management’s expectations.

The group reported a strong order book, underpinned by its long term framework positions while net debt and cash generation are in line with expectations.

Hide Ad
Hide Ad

Renew said that its differentiated, low risk, highly cash generative business model, combined with the mission critical nature of its work and exposure to markets with long term growth dynamics, leaves the board confident in its ability to capitalise on long term opportunities ahead.

Analyst Andrew Nussey at Peel Hunt said: “Following the better than expected interim results, Renew has continued to deliver a strong trading performance.

“Activity levels remain high, supported by the strategic differentiation through self delivered, essential multi-disciplinary services to key infrastructure assets.

“Moreover, the operational focus and improving quality and mix of earnings has supported an increase to our margin expectations.

Hide Ad
Hide Ad

“We note that the integration of the two cash financed acquisitions in the period, Browne and REL (for a combined price of £32.5m), are proceeding to plan and trading in line with management’s expectations.”

The firm will report its annual results on December 7.

Related topics: