Renew Holdings reports another record trading performance

14th May 2024 12:56

(Sharecast News) - Engineering services group Renew Holdings reported another record trading performance in its half-year results on Tuesday, with revenue rising 17.2% year-on-year to £552.8m.

The AIM-traded firm said adjusted operating profit advanced 17% to £33.1m, while operating profit climbed 13.3% to £30.5m.

Its adjusted operating margin remained steady at 6%, maintaining the same level as the prior year's interim period.

Profit before tax jumped 15.2% to £30.3m, while adjusted earnings per share rose 14.2% to 31.3p.

An interim dividend of 6.33p was declared, up 5.5% over the half-year distribution a year earlier.

The group's order book expanded to £898m, while the company's organic revenue growth came in at 16.9%.

Renew said that growth was further fuelled by robust demand in its target markets, while it maintained a robust net cash position of £42.5m.

Operationally, Renew noted the successful integration of acquisitions like TIS and Route One Infrastructure.

The company said it secured and extended numerous frameworks with Network Rail and made substantial investments in tendering AMP8 frameworks, which weer expected to yield fruitful outcomes.

Renew also made considerable progress in the highways sector, and was strategically positioned to capitalise on the forthcoming Road Investment Strategy RIS3.

Looking ahead, Renew was optimistic about its trading prospects, with strong momentum carrying over into the second half of the financial year.

The company said it aimed to enhance collaboration among its business units to tender for larger frameworks efficiently.

With a solid foothold in CP7 and upcoming opportunities in AMP8, Renew said it was well-positioned to leverage its expertise and capitalise on the substantial investment commitments in infrastructure renewal and maintenance.

Renew added that it remained confident in its prospects despite potential short-term political uncertainties, given the critical nature of its work and the reliable regulatory spending landscape.

"I am very pleased to report we have delivered another record trading performance in the period," said chief executive officer Paul Scott.

"We are delighted with our early success in extending and securing frameworks across the new funding periods in water and rail.

"These successes, together with the core characteristics which underpin the markets in which we operate, provide highly visible revenue streams and reinforce our significant confidence in delivering against our growth targets in the medium to long term.

"The recent acquisitions of TIS and Route One have further strengthened our unique offering as we broaden our expertise in our target markets and we continue to look forward to executing on the significant growth opportunities, both organic and inorganic, in line with our strategy."

At 1231 BST, shares in Renew Holdings were up 2.59% at 1,028p.

Reporting by Josh White for Sharecast.com.