Renew, Leeds engineering firm, reports £878m orders

Leeds-based engineering services group Renew Holdings said its order book has grown about £8 million to £898 million over the past year.

Reporting results for the six months ended March 31, 2024, Renew said its first-half revenue increased 17.2% to £552.8 million and profit before tax rose 15.2% to £30.3 million.

Interim dividend of 6.33p is up 5.5%.

Renew Holdings’ shares rose about 2.5% to around £10.26 to give the firm a currejt stock market value of about £812 million. The firm’s share have risen more than 40% over the past 12 months.

Renew said it successfully completed the bolt-on acquisitions of TIS Ltd and post period end, Route One Infrastructure, with the integration of both businesses progressing well, and both continue to trade in-line with expectations.

The firm said it has already secured and extended a number of new and existing CP7 frameworks with Network Rail with further tender opportunities expected later this year.

The firm added: “Investment made in tendering AMP8 frameworks coming to fruition with extensions to major AMP8 frameworks with South East Water, Thames Water and Welsh Water; a number of new frameworks already confirmed; and several live tenders ongoing …

“Delivered further operational and strategic progress in Highways as we continued to execute on workbanks that are a part of five framework lots worth more than £147m …

“Ongoing preparations for the start of the Road Investment Strategy RIS3, due to commence in April 2025.

“Preparatory consultations have indicated a notable shift away from enhancements to maintenance work on structures, renewals and road restraints, meaning we are uniquely positioned to take further market share.”

On Current Trading & Outlook, Renew said: “The strong momentum seen in the first six months has carried through to the start of the second half, underpinning the board’s confidence in the full year outturn …

“From 1 April 2024 – 31 March 2029, Network Rail has committed to spending £31.9bn on renewals and maintenance, perfectly aligning with our core strengths as the network’s largest provider of multidisciplinary maintenance and renewal engineering services …

“Significant opportunity available as we transition into AMP8, with investment expected to be larger than AMP7, and considerable scope to leverage the combined expertise across our four water brands …

“The mission-critical nature of our work and the highly visible, reliable, committed regulatory spending periods give us confidence that any short-term political ambiguity from a general election will not impact the group’s opportunities now or in the future.”

Renew Holdings CEO Paul Scott said: “I am very pleased to report we have delivered another record trading performance in the period.

“Our success in delivering sustainable growth is testament to the hard work of our dedicated colleagues and the resilient and differentiated nature of our high-quality, low-risk business model as well as the mission-critical nature of our work.

“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.”