Renew redoubles focus on UK infrastructure as profits slide

Engineering services group Renew said it was well placed to take advantage of government spending plans, despite a fall in full-year profits.

Renew carried out its largest ever acquisition in May when it bought specialist rail contractor QTS in an £80m deal. It also pulled out of the gas market as it sought to refocus on the UK’s critical infrastructure networks.

Disposal and acquisition costs mean final pre-tax profits fell 25.8% to £14.7m, while revenues were largely flat, down 0.8% at £541.5m, after an expected temporary decline in rail revenues offset growth in engineering services. Net debt was £21.4m, against a net cash position of £3.9m in 2017, because of acquisition costs.

Adjusted operating profits, however, were ahead 9.6% at £31.1m, while the order book as at 30 September was £558m, against £511m in 2017.

Chief executive Paul Scott said the results demonstrated “continued progress and the delivery of our strategic objectives”.

Chairman David Forbes added: “Over the next five-year investment period in rail, the government has stated that Network Rail spending must have greater emphasis on renewals and maintenance, with a focus on improving the customer experience.

“This spending aligns with Renew’s expanded range of rail service capabilities as we continue to under large volumes of day-to-day maintenance tasks to keep the network operational.”

Forbes added that alongside Rail, Renew was targeting the nuclear, wireless telecoms and water markets, which “also benefit from similar long-term programmes of investment to support their essential operational assets”.