Renew profits surge 21% in half-year results

Renew Holdings has published its half-year results showing a solid performance.  

The engineering services company revealed a nearly 21 per cent rise in profits and an order book at £890 million. 

It said trading had started well in the second half of FY 2023. And while it is not immune to ongoing inflation pressures, it is well positioned to mitigate its impact, “due to the nature of our variable, cost-plus contracts”.  

“We remain confident that the full year will be in line with the Board’s expectations,” it added. 

Financial – key takeaways 

• Revenue: +13.9 per cent to £471.8 million (HY22: £414.3 million). 
• Adjusted operating profit: +9 per cent to £28.3 million (HY22: £26 million). 
• Operating profit: +21.9 per cent to £26.9 million (HY22: £22.1 million). 
• Adjusted operating margin: -0.3bps to 6 per cent (HY22: 6.3 per cent). 
• Profit (before tax): +20.9 per cent to £26.3 million (HY22: £21.8 million). 

The company reported a 4.7 per cent rise in adjusted earnings per share to 27.4 pence, up from 26.2 pence HY22. 

Interim dividends (distribution of profits to shareholders) rose 5.8 per cent to 6 pence, up from 5.67 pence HY22. 

Renew said the increased interim dividend reflected a resilient trading performance, healthy cash generation and strong forward order book by the company. 

Adding its operating profit and revenue is “well ahead of strong prior half-year comparatives”. 

• Order book: stands at £890 million (HY22: £771 million). 
• Net cash (pre-IFRS16): £17 million (HY22: net debt £1.2 million). 
• Organic revenue growth of 11.6 per cent, driven by focus on brand collaboration, particularly in the Highways market.  

Operational – key takeaways 

Welsh Water has awarded Renew major civils, major electrical and major mechanical packages on a framework. 

Renew also secured new CP7 framework contracts with Network Rail in the Wales & Western regions. 

It has seen the successful integration of Enisca since its acquisition in November last year. 

Renew also said it has identified a growing opportunity for collaboration between brands in the Water sector – and seen organic growth in its Aviation projects. 

“We are pleased to report another period of outstanding performance, once again illustrating the resilient and differentiated nature of our high-quality, low-risk business model,” said Renew CEO, Paul Scott. 

“Supported by the commercial terms within our frameworks, the Group has been able to successfully alleviate inflation challenges throughout the period, delivering operating profit and revenue ahead of strong prior half-year comparatives.  

“Our results in a difficult macroeconomic environment highlight the strength of our business model, which is underpinned by committed regulatory spending periods and long-term frameworks resulting in repeatable revenue streams and highly visible earnings.  

“Further, the mission-critical nature of the work we perform fosters long-lasting relationships with our clients illustrated through our strong track record of repeat contract wins. 

“With ongoing strong demand in our end markets, we enter the second half of the year confident in our full year performance and, longer term, in the attractiveness of the structural growth drivers.” 

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