Renew upbeat after full-year growth in revenue, profit

Infrastructure engineering services company Renew Holdings reported a 13.2% improvement in group revenue in its final results on Tuesday, to £960.9m.

The AIM-traded firm said the growth was primarily organic, with a 10% increase in revenue excluding external factors.

It reported an adjusted operating profit of £63.6m for the 12 months ended 30 September, up 8.2% year-on-year, while its operating profit surged 18% to £59m.

The adjusted operating margin decreased 31 basis points to 6.6%.

Profit before tax increased 17.4% to £58.1m, and adjusted earnings per share rose 6.7% to 63.5p.

The board declared a full-year dividend of 18p per share, reflecting a 5.8% increase from the prior year’s distribution.

Renew reported a solid net cash position pre-IFRS 16 of £35.7m, up from £20.2m a year earlier.

On the operational front, Renew noted its expansion into new business areas, strategic acquisitions such as Enisca and Rail Electrification Limited, and its status as the largest provider of maintenance and renewal services to Network Rail.

Additionally, Renew secured significant contracts in the water, rail and highways sectors.

Regarding safety and sustainability, Renew exceeded its prior year safety benchmarks and retained the LSE Green Economy Mark, with more than 50% of its revenues contributing to environmental objectives.

Looking ahead, Renew said it was positioned to capitalise on both organic and acquisitive growth opportunities, benefiting from favourable structural growth drivers.

It anticipated growth in the water sector, as increased sector expenditure was expected over the next decade.

Renew recently announced the acquisition of TIS Cumbria, a leading nuclear manufacturing and fabrication specialist.

The board said on Tuesday that the move would further strengthen the company’s presence in the growing nuclear decommissioning and new-build markets.

Its trading momentum remained positive, with Renew optimistic about the opportunities ahead across its business segments.

With the government prioritising investment in maintaining and renewing existing infrastructure, Renew said it was well-positioned for continued success in its mission to support critical UK infrastructure needs.

“I am very pleased to report that we have once again delivered record results despite the turbulent macroeconomic landscape,” said chief executive officer Paul Scott.

“Continued growth in revenue, profit and our solid operating cash generation is a testament to the strength of our business model and the group’s well-established positions in attractive and sustainable growth markets.

“On behalf of the board, I would like to sincerely thank all of our dedicated colleagues whose hard work and commitment has enabled the group to deliver yet another record performance.”

Scott said the company’s core strengths left it well-placed to build on its long-term value creation track record as it looked ahead with momentum and a strong forward order book.

“We remain excited about the significant growth opportunities across the group, underpinned by the increasing national demand for the maintenance and renewal of existing UK infrastructure, which will continue to be a domestic priority regardless of the outcome of the next election.”

At 1448 GMT, shares in Renew Holdings were up 2.15% at 806p.

Reporting by Josh White for Sharecast.com.