14
May 2024
Renew Holdings
plc
("Renew" or the "Group" or
the "Company")
Half-year
Report
Continued momentum and strong
organic growth underpins record first half
performance
Renew (AIM: RNWH), the leading
Engineering Services Group supporting the maintenance and renewal
of critical UK infrastructure, announces its interim results for
the six months ended 31 March 2024 ("the period").
Financial Highlights
Six
months ended 31 March 2024
|
HY24
|
HY23
|
Change
|
Group revenue
|
£552.8m
|
£471.8m
|
+17.2%
|
Adjusted operating profit
|
£33.1m
|
£28.3m
|
+17.0%
|
Operating profit
|
£30.5m
|
£26.9m
|
+13.3%
|
Adjusted operating margin
|
6.0%
|
6.0%
|
-
|
Profit before tax
|
£30.3m
|
£26.3m
|
+15.2%
|
Adjusted earnings per
share
|
31.3p
|
27.4p
|
+14.2%
|
Interim dividend
|
6.33p
|
6.00p
|
+5.5%
|
·
|
Group order book development to
£898m (HY23: £890m)
|
·
|
Strong organic revenue growth of
16.9% driven by the differentiated nature of our high-quality,
low-risk business model, alongside the continued strong demand in
our end markets
|
·
|
Equally strong operating profit
growth demonstrates robustness of our operating model and quality
of earnings
|
·
|
Robust net cash (pre-IFRS16)
position of £42.5m (HY23: £17.0m)
|
·
|
Increased interim dividend reflects
strong trading performance, cash generation and forward order book
visibility
|
Operational Highlights
·
|
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
|
·
|
Already secured and extended a
number of new and existing CP7 frameworks with Network Rail with
further tender opportunities expected later this year
|
·
|
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
|
Current Trading & Outlook
·
|
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
|
·
|
Continue to focus on increasing
collaboration between our businesses which, with their
complementary skillsets, positions us well to leverage our
expertise to tender for larger frameworks going forward
|
·
|
Commence CP7 in a stronger position
including a larger number of frameworks across a greater
geographical area than in CP6
|
·
|
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
|
Paul Scott, CEO of Renew, commented:
"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."
For further information, please
contact:
Renew Holdings plc
|
www.renewholdings.com
|
Paul Scott, Chief Executive
Officer
|
via FTI
Consulting
|
Sean Wyndham-Quin, Chief Financial
Officer
|
020 3727
1000
|
|
|
Numis Securities Limited (Nominated Adviser and Joint
Broker)
|
020 7260
1000
|
Stuart Skinner / Kevin Cruickshank /
William Wickham
|
|
|
|
Peel Hunt LLP (Joint Broker)
|
020 7418
8900
|
Ed Allsopp / Pete Mackie / Charlotte
Sutcliffe
|
|
|
|
FTI
Consulting (Financial PR)
|
020 3727
1000
|
Alex Beagley / Tom Hufton / Amy
Goldup / Matthew Young
|
Renew@fticonsulting.com
|
Renew HY24 Results
Chief Executive Officer's Review
Continued momentum and strong market dynamics underpin record
first half performance
The Group delivered another record
trading performance for the first six months of the financial year,
continuing the strong momentum seen in FY23. This excellent
performance, which was achieved despite a number of macroeconomic
headwinds facing the wider market, serves to demonstrate the
continued resilience and differentiated nature of our high-quality,
low-risk business model, alongside the continued strong demand in
our end markets.
We have established a track record
of delivering consistent, sustainable growth across all our
financial metrics which we are able to achieve as a result of a
number of key characteristics of the Group. The critical nature of
our work across non-discretionary maintenance and renewals tasks
and the visibility of the highly committed and long-term spending
cycles within our markets give us confidence in our continued
strong growth trajectory.
It was pleasing to see the
Government's 2024 Spring Budget re-affirm its commitment to invest
in the UK's infrastructure, with over £600 billion[1] of public sector investment planned over the next
five years to meet the target of net zero carbon emissions by 2050.
The Government has committed to advancing the UK's net zero efforts
with nuclear and green energy with an £800m1
allocation to scale up affordable, clean, homegrown power. This
will be achieved through focusing on the decarbonisation of the
UK's grid, the purchase of two nuclear sites and further investment
in the Green Industries Growth Accelerator (Giga), all of which
offer significant opportunities for the Group. Further, with
pressure on public expenditure as a result of the difficult
macroeconomic environment, we are seeing increased funding being
directed towards the maintenance and renewal of existing assets and
away from major infrastructure enhancement projects which bodes
well for our business.
Regardless of the outcome of the
upcoming UK general election and wider economic pressures, we
believe the mission-critical nature of our work and the highly
visible, reliable, committed regulatory spending periods which
underpin our markets give us confidence that such challenges will
not impact the Group's opportunities now or in the
future.
Of particular note during the period
has been the Group's strong double digit organic growth which has
been driven by ongoing demand across our markets for our
non-discretionary services as well as the impact of multiple
weather events over the winter that have required a reactive
response to ensure that the networks continue to operate safely.
This strong organic growth performance, alongside our robust
balance sheet and cash generative model provides us with the
strength and agility to invest further in organic opportunities and
value-accretive M&A to fully capitalise on the opportunities
available to us.
In October 2023, we successfully
completed the bolt-on acquisition of TIS, which is now fully
integrated into the Group and is starting to deliver the planned
strategic benefits. Post period end, in April, we acquired Route
One Infrastructure and we are pleased to say that the integration
plan is progressing well. Both businesses are trading in line with
expectations and represent an excellent strategic fit for the
Group, expanding our service offering and provide both internal
synergies and new development opportunities. We continue to
consider a number of acquisition opportunities that meet our strict
criteria and that would complement the Group's existing
capabilities or extend our footprint into our target
markets.
Another record trading period in the
first six months of FY24 continues to demonstrate the consistent
and resilient nature of our business model. We enter the second
half of the year with good momentum and a strong forward order book
which underpins our confidence in our full year outturn. We are
seeing continued demand for our services across all our markets and
that is largely due to the outstanding work of our directly
employed colleagues who continue to go above and beyond for our
clients. On behalf of the Board, I would like to take this
opportunity to thank all our dedicated colleagues for their
valuable work and continued commitment to providing our clients
with mission critical, highly responsive services at all
times.
Renew's strengths
Renew has a number of core strengths
which provide distinct competitive advantages in our chosen markets
and leave us well placed to build on our strong track record of
long-term value creation:
·
|
We remain committed to ensuring the
health, safety, and wellbeing of our team and those impacted by our
operations. In this regard, we have a robust set of safety
standards across all of our operations which are reviewed on a
regular basis to ensure standards remain at the highest
level.
|
·
|
Our business model is robust,
diverse, and low risk. We focus on essential asset maintenance and
renewal services, that are not dependent on large, high-risk,
capital-intensive contract awards.
|
·
|
Our flexible model allows us to
engage with clients as individual companies, as a larger group or
as a collaboration of brands to meet their ever-changing
operational requirements.
|
·
|
With our directly employed
workforce, we deliver valuable, efficient and responsive solutions
to our clients, minimising the impact of sub-contractor pricing
fluctuations.
|
·
|
We ensure that we remain agile in
our ability to proactively and efficiently manage cost inflation
through commercial terms within our frameworks.
|
·
|
Our businesses work in complex,
challenging and highly regulated markets with significant barriers
to entry, which demand a highly skilled and experienced workforce
and a proven track record of safe delivery.
|
·
|
Our markets offer steady, long-term
growth and predictable cash flows due to committed regulatory
spending. We have shown a consistent track record of value
creation, reliable revenue growth and strong returns on capital
which has been achieved through our highly cash generative earnings
model.
|
·
|
We remain committed to achieving
growth both organically and through selective acquisitions while
maintaining a disciplined approach to capital allocation and risk
underpinned by a strong balance sheet.
|
·
|
We continue to hold strong
relationships with all stakeholders including our workforce,
customers, suppliers, communities and shareholders.
|
·
|
Our high-quality model of
compounding earnings through the redeployment of internally
generated cashflows enables us to execute on our strategy of
delivering reliable growth for all our stakeholders.
|
Compelling market drivers
Our business is well positioned to
benefit from attractive, long-term, non-discretionary structural
growth drivers. Increasing demand for the maintenance and renewal
of existing UK infrastructure is driven by a number of factors
including:
·
|
a renewed commitment by the
Government to level up the economy by investing over £600 billion
in an infrastructure-led recovery. Two-thirds of this will be
injected in the transport and energy sectors, with fiscal stimulus
measures likely to flow through to lower cost infrastructure
maintenance programmes ahead of larger, more capital-intensive
enhancement schemes;
|
·
|
a greater focus on sustainability
and climate change as part of the UK's target of reaching net-zero
carbon emissions by 2050, together with flood risk prevention
measures and investment in nuclear projects, renewables and rail
electrification programmes;
|
·
|
sustained population growth is
continuing to increase pressure on transportation, energy, water
and demand for natural resources;
|
·
|
technological innovation driving a
shift towards digital roads, smart cities and the transformation of
transport and telecommunications networks; and
|
·
|
increased Government regulation to
improve safety, efficiency and resilience of key infrastructure
assets leading to more demanding maintenance, renewal and upgrading
requirements.
|
Results overview
During the period, Group revenue
increased 17.2% to £552.8m (HY23: £471.8m) which included organic
growth of 16.9%. The adjusted operating profit increased by 17.0%
to £33.1m (HY23: £28.3m) with adjusted operating margin maintained
at 6.0% (HY23: 6.0%).
As at 31 March 2024, the Group had
pre-IFRS16 net cash of £42.5m (31 March 2023: £17.0m). The Group's
order book at 31 March 2024 had strengthened to £898m (HY23: £890m)
underpinned by long-term framework positions.
Dividend
The Group's resilient trading
performance, cash position and strong forward order book have
consistently allowed the Group to pursue its progressive dividend
policy. It has declared an interim dividend of 6.33p (HY23: 6.00p)
per share. This represents a 5.5 per cent increase on the last
interim dividend paid. This will be paid on 10 July 2024 to
shareholders on the register as at 7 June 2024, with an ex-dividend
date of 6 June 2024.
Engineering Services
Our Engineering Services activities
delivered a 16.0% increase in revenue to £505.4m (HY23: £435.8m)
with an 18.2% increase in adjusted operating profit to £35.1m
(HY23: £29.7m), resulting in an operating margin of 6.9% (HY23:
6.8%). Our Engineering Services organic growth rate in the period
was 15.6%. As at 31 March 2024, the Engineering Services order book
was £831m (HY23: £780m). This strong performance was achieved
through the continued momentum within our Rail, Infrastructure and
Environmental sectors which see increasing demand for our
mission-critical offering.
Rail
We welcome the ongoing planning and
legislative processes aimed at reforming our national rail network,
including the formation of Great British Railways. We also continue
to closely follow the reaction to the recent announcement by the
opposition government regarding their own rail reform proposals.
The Group fully supports reform of the rail network and is
confident that at the heart of these plans is an imperative to
improve the efficiency, reliability and safe operation of the
entire network. Crucially, in order to satisfy these requirements,
any government, and its chosen delivery body, will need to
accelerate its commitment to the renewal and maintenance of the
rail infrastructure across the UK. It is in these areas that we
have established a market leading position as we continue to
deliver long-term national frameworks and remain deeply embedded in
establishing leading renewal and maintenance programmes in all of
the national rail regions.
The Government's increased focus on
this critical national infrastructure priority bodes very well for
our specialisms and we are pleased to
report, in line with expectations, the demand for our industry-leading services remained strong
across the sector during the period. As such, our three rail brands
entered the new Control Period in a healthy position. At the
beginning of April, Network Rail, a significant strategic customer
for the Group, announced the start of its five-year rail
improvement plan, worth £45.4 billion[2],
aimed at providing the highest level of rail performance whilst
simultaneously ensuring the network is resilient to the worsening
extremes of climate change. Over the course of CP7, which runs from
1 April 2024 through to 31 March 2029, Network Rail will spend
approximately
£31.9 billion on renewals and maintenance2,
perfectly aligning with our core strengths as we continue to be the
largest provider of multidisciplinary maintenance and renewal
engineering services to the network.
Set out in the April announcement by
Network Rail2, in a change from CP6,
enhancements will be funded separately on a case-by-case basis by
central government, evidencing Network Rail's greater focus on
reliability through increased funding of renewals and maintenance
programmes.
The Group continues to assist
Network Rail's day-to-day operations through our mission-critical
renewals and maintenance services supporting assets including
bridges, embankments, tunnels, drainage systems, signalling,
electrification, devegetation, fencing and plant, all of which are
essential as we work together with the network to help it
effectively respond to the challenges of managing ageing critical
infrastructure while improving climate resilience. The mix of work
across this sector included a significant number of emergency call
outs due to the impact of winter storms and prolonged periods of
rainfall.
Importantly, our early successes in
securing Network Rail CP7 frameworks has been maintained and we are
delighted to report in Scotland that we
have won the Buildings & Civils Framework as well as the
Geotechnical Framework. In Eastern, we have won the Buildings and
Civils Framework and in the North West and Central region we have
been awarded a range of civils & buildings renewals frameworks
as well a number of civils and building asset management
frameworks. In addition to these appointments, there are a number
of live tenders that are the subject of an ongoing procurement
process. Overall, we commence CP7 in a
stronger position than at the start of CP6. In addition to the
above noted appointments, numerous frameworks have been extended
into this period and we are now appointed to a larger number of
frameworks.
Other significant UK rail market
growth opportunities that we are targeting include the ongoing
Transpennine Route Upgrade, the Midland Rail Hub, Project Reach
(rail telecommunications upgrade) and the Southern Integrated
Delivery Framework.
We have also continued to prioritise
inter-group collaboration which goes hand in hand with our focus on
expanding our credentials in rail innovation, a key illustration of
this being the specialised drill rigs that have been fitted to the
Mega Reach, the largest Road Rail Vehicle lorry loading crane
working on the UK rail network, first deployed at the Severn
Estuary followed by an emergency scheme at Braybrook
Embankment.
We continue to drive recruitment and
mobilise additional resources to deliver the Overhead Line
Equipment work bank, which is a part of the existing Wales &
Western framework, awarded to us as ARQ, a
collaboration between the Group's three rail businesses, and
provides us access to the Paddington to Bristol Great Western
Mainline upgrade.
Our commitment to the training and
development of our rail colleagues is unwavering and a great deal
of our work continues to be recognised externally. During the
period, we were awarded a Training Excellence Award for the
innovative Controller Of Site Safety ("COSS") Academy Programme
which has revolutionised delivery and lineside safety both
internally and throughout our supply chain. The Group's Rail Skills Academy is recognised as a leader in
the delivery of vocational training and is aimed at increasing the
available skill sets to support the growth ahead of us.
Infrastructure
Highways
The Group delivered further
operational and strategic progress in the period as we continued
executing on work banks that are a part of the current National
Highways Scheme Delivery Framework (SDF) that runs to 2027 and
includes five framework lots covering civil engineering, road
restraint systems and drainage disciplines, worth more than £147m
over the six-year period.
The current SDF also involves
preparing for the start of Road Investment Strategy 3 ("RIS3"),
which is scheduled to start in April 2025. Preparatory
consultations have indicated RIS3 will centre its focus on carbon
reduction, with a notable shift away from enhancements to
maintenance work that will involve prioritising funding on
structures, renewals and road restraints. This clearly plays to our
strengths as a business and uniquely positions us to deliver
continued growth and to take further market share across the
sector.
Moreover, as part of the SDF
framework our specialist engineering services anticipate
significant work on the legacy concrete pavements (LCP) programme
and in addition, the AGC collaboration (AmcoGiffen & Carnell),
a leading barrier supplier to National Highways, continues to grow
its work bank.
Elsewhere, in April we were very
pleased to announce that Carnell Group Holdings Ltd had acquired
Route One Holdings (Wakefield) Ltd for an Enterprise Value of £5.0m. Based in West Yorkshire, Route One
is a multi-disciplinary specialist engineering business operating
in the UK Highways sector providing
end-to-end solutions for bridge deck maintenance and protection.
Route One has a number of long-term frameworks on the SDF
across England, as such the acquisition
represented an excellent strategic fit for the Group. Route One has
expanded our offering by adding new capabilities to the Group's
highways business, with particular expertise in bridge and
structures maintenance and repairs. The integration of Route One
continues to progress well and are well positioned to increase the
number of framework appointments and renewals as a larger Group
uniquely positioned to capitalise on the distinctive capabilities
within each business.
Aviation
Our capabilities involve delivering
airside operational support and asset care at a number of UK
airports. In the period we were awarded an Airside Maintenance
Framework at Leeds Bradford, another significant achievement for
the Group that we are well placed to replicate at additional
locations.
Aviation continues to be an area of
focus for the Group and we are pleased to have organically moved
into this sector, which has significant barriers to entry. We look
forward to continuing to seize new opportunities as we develop our
credentials in this area.
Wireless Telecoms
Momentum has remained strong off the
back of a record performance in FY23. The nation's connectivity is
becoming even more critical in the digital age and, as a result,
demand for our services across the Wireless Telecoms sector remains
strong and we continue to establish ourselves as a trusted partner
to the nation's largest network providers. We have also seen
significant commitment to changes in the market during the period,
with substantial capital spend committed to reversing the historic
underinvestment in critical assets in this sector meaning there are
considerable growth opportunities for us going forward. Our plan to
broaden our route to market has progressed well and we are
delighted that we now have frameworks in place with all four major
mobile networks.
During the first half we expanded
our position with Virgin Media O2 (VMO2) and our work now includes
several new regions on a larger framework for 4/5G networks as well
as unwind works, demergers and building new mast
infrastructure. Our 3-year framework with VMO2 for design and
construction services is worth up to £50m over the term,
successfully securing our position as a key delivery partner for
VMO2 across the UK.
We continue to develop our small
cell work banks with BT and some small private providers. This
work, along with our focus on growing our capabilities in servicing
the private 5G market, are just some of the ways we are continuing
to expand our reach across the sector. Our teams are also working
to further develop our non-core routes to market through supporting
the UK's tower providers, including Cornerstone and Cellnex.
Through the Shared Rural Network programme, in March 2024 we were
proud to activate the first SRN site to go live in the
UK.
Energy
Nuclear
With more than 75 years' specialist
experience in civil nuclear and a large complement of highly
skilled employees, we continued to see strong demand for our
multidisciplinary service offering during the period.
Through the previously announced Sellafield
Project Partnership Programme (PPP) frameworks that were secured in
summer 2023, our nuclear businesses have now been awarded numerous
contracts with a combined value of over £50m. Recent awards include
contracts to support Sellafield in their highly complex Post
Operational Cleanout of Facilities to support the decommissioning
programme. We are also tendering for two separate £1 billion lots
on the Sellafield Decommissioning Nuclear Waste Partnership (DNWP),
the successor framework to the Decommissioning Delivery
Partnership. We continue to focus on developing our existing
capabilities and are encouraged that there remains further growth
opportunities at Sellafield, including additional new long-term
frameworks.
Elsewhere, we continue to secure
opportunities outside of Sellafield, steadily growing our presence
in the civil nuclear market at Springfields, Capenhurst and AWE. We
also remain excited about the new growth opportunities that will be
generated as part of the long-term frameworks for Nuclear
Restoration Services (formerly Magnox) and nuclear newbuild. Here
the Government's focus on the decarbonisation of our energy supply
as a key means of achieving carbon neutrality necessitates that the
UK will need to deliver a radical shift in the running of our
energy system towards cleaner, more affordable energy sources, of
which new nuclear is an essential component. This demand
underpinned the creation of Great British Nuclear and the
Government's target to commence construction of up to three new
nuclear plants in the next 10 years3. This
commitment ensures long-term and sustainable demand for our
specialist manufacturing capabilities in high-grade nuclear
components.
As we announced in October 2023,
Shepley acquired TIS, a nuclear manufacturing specialist, doubling
our nuclear manufacturing capacity to better support our reach into
additional nuclear opportunities across the UK. We are pleased to
confirm the integration of TIS is now complete and is providing
further growth opportunities in this sector.
Electric Vehicle Charging
The transition to electric vehicles
("EV") continues to play a key role in supporting the UK's ambition
of achieving net zero emissions by 2050 and we are strategically
positioned to play a significant role in helping drive the creation
of the UK's EV charging infrastructure landscape. Through our
collaborations with major charge point operators, we have already
established a strong foundation in this sector and our success in
securing new framework agreements demonstrates our commitment to
growth and fostering long-term partnerships in this relatively new
market.
During the period we were delighted
that as part of BT Group's commitment to utilise its existing
infrastructure to support the roll out of EV charging, we completed
the first installation of an EV charger from its green streetside
cabinets. This milestone marked the start of a significant rollout
programme.
Environmental
Water
In Water, we have continued to
benefit from the UK Government's committed £51 billion investment
in AMP7, which extends through to March 2025. Throughout the period
this has seen continued expenditure on capital maintenance, asset
optimisation and supply resilience including dam safety and
infrastructure refurbishment schemes.
As we move into AMP8 (2025-2030), we
see a significant opportunity to leverage the combined expertise
across our four water brands to secure new frameworks, with AMP8
investment expected to be significantly larger than AMP7.
Ofwat is expected to publish its draft
determinations in June 2024 and proposed plans would see £96
billion invested in clean and wastewater infrastructure between
2025 and 20304. This significant growth creates
an excellent opportunity for Renew to expand its water
activities.
We have made a significant
investment in tendering AMP8 frameworks with good progress having
been made in securing key framework appointments with leading
clients. The following new regional frameworks have been confirmed:
major civils, electrical and mechanical frameworks for Dŵr Cymru
Welsh Water ("Welsh Water"); infrastructure and treatment
frameworks for Northumbrian Water Group; an infrastructure
framework for South West Water; and a non-infrastructure framework
for Thames Water.
Extensions to major frameworks into
AMP8 include with South East Water, Thames Water and Welsh
Water.
In addition to these major
appointments and extensions, there are a number of live tenders
that are the subject of an ongoing procurement process.
Overall, we will commence AMP8 with additional
clients and a stronger position including a larger number of
frameworks across a greater geographical area.
News of Thames Water's current
financial position has been widely reported in the media and whilst
this brings understandable concern for many in the sector, we are
pleased to note that all Thames Water operations remain unaffected
by internal issues and our maintenance and renewal frameworks will
remain intact regardless of any ownership changes. This serves to
highlight the mission critical nature of our work, the funding
underpin that it generally sees and the sustained necessity for
maintenance to UK infrastructure that we provide.
Our Water client base has continued
to grow and the Group is now working with 10 of the 12 combined
waste or water companies in the UK as well as selected water only
companies including Affinity Water, Bristol Water and South East
Water.
Flood and Coastal
Increasingly volatile weather
conditions have served to highlight the urgent need for additional
investment in flood defences in the UK and as a combined Group, we
are well positioned to benefit from increasing investment in this
sector. As such, during the period we were appointed to positions
across four geographical regions on the Environment Agency's new
asset operation, maintenance and response framework through to
2028.5
These framework appointments further
consolidate our position as a leading engineering provider in this
sector.
Land Remediation and Specialist Restoration
In Land Remediation, we continue to
pursue long-term demand as part of the green infrastructure agenda
for these services. In Specialist Restoration, our work at Edinburgh Botanical Gardens to develop the Glass
Houses is progressing well and we
recently secured a programme of work
associated with the restoration of a listed cast iron gasholder in
Bethnal Green.
Specialist Building
Our Specialist Building business
focuses on the High Quality Residential, Landmark and Science
markets in London and the Home Counties.
The High Quality Residential sector
remains resilient and, in Science, work continues on the Medical
Research Council Framework at Harwell and on our existing Defra
frameworks.
The Specialist Building business
delivered revenues of £47.4m (HY23: £36.0m), with operating profit
of £0.8m (HY23: £0.5m) and operating margin of 1.7% (HY23: 1.4%).
As at 31 March 2024, the order book was £67m (31 March 2023:
£110m), reflecting our diligent approach to contract
selectivity.
ESG
The UK Government's investment in
low carbon infrastructure will be essential to delivering on its
net zero emissions targets by 2050 and Renew is well positioned to
play an integral role in these efforts.
We are pleased to have retained our
LSE Green Economy Mark, recognising London-listed companies and
funds that derive more than 50% of their revenues from products and
services that are contributing to the environmental objectives such
as climate change mitigation and adaptation, waste and pollution
reduction, and the circular economy.
We continue to focus our energy on,
and are making progress against, our four key areas: climate
action; operating responsibly; empowering our people; and building
social value.
We have established quantitative
sustainability targets to embed our ESG strategy across the
business and it is the Board's ambition that the Group will achieve
net zero by no later than 2040. A more detailed update on progress
against these targets will be included in our Final Results in
November 2024.
Ensuring the health and safety of
our staff and those potentially impacted by our activities is at
the heart of everything we do. We are proud to note that
our SHEQ performance in the first half was
strong and ahead of the targets we set ourselves.
Directorate changes
As announced on 2 April 2024,
Andries Liebenberg will leave the senior management team on 31
January 2025, having served over eight years as Executive Director
of Rail. He will leave the Board at the same time. Simon Ellison
joined the Group's senior management team in April 2024 as Rail
Sector Director, ensuring a smooth transition period. Simon brings
a wealth of experience gained over 25 years at Costain in senior
leadership roles across Rail and Transportation.
The Board would like to take this
opportunity to thank Andries for the significant contribution he
has made to the Group since his appointment and to wish him well in
his retirement.
Outlook
Following a record trading
performance in the first six months of FY24, we enter the second
half with strong momentum and confidence in the full year outturn
as we continue to capitalise on the broad range of opportunities
available to us across our markets. We have seen notable success
across all of our businesses and, following an intensive period of
tendering, we have a strong pipeline of new and extended
frameworks, particularly in Water and Rail as we move towards new
investment cycles. The strong foundations we have built across our
markets present excellent organic growth potential.
The UK government's commitment to
invest £600 billion in infrastructure provides attractive long-term
growth drivers within our wider market and, with an expanded
offering providing greater cross selling capabilities, the Group is
in a strong position to leverage growth opportunities from
increased investment across our markets.
The resilient nature of our business
model, alongside the highly visible, reliable and committed
regulatory spending periods that underpin our markets, position us
well to continue on our positive growth trajectory no matter the
outcome of the upcoming general election.
Further to the two recent
complementary acquisitions, we continue to see a healthy M&A
pipeline of opportunities in existing and target
markets.
CONDENSED
CONSOLIDATED INCOME STATEMENT
for the six
months ended 31 March 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before
exceptional items and amortisation of intangible assets
|
Exceptional items and amortisation of intangible
assets
(see Note
3)
|
Six
months ended
31
March
|
Before
exceptional items and amortisation of intangible assets
|
Exceptional items and amortisation of intangible
assets
(see Note
3)
|
Year
ended
30
September
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2024
|
2024
|
2023*
|
2023
|
2023
|
2023
|
|
Note
|
Unaudited
£000
|
Unaudited
£000
|
Unaudited
£000
|
Unaudited
£000
|
Audited
£000
|
Audited
£000
|
Audited
£000
|
|
|
|
|
|
|
|
|
|
Revenue: Group including share of
joint ventures
|
2
|
552,798
|
-
|
552,798
|
471,823
|
960,937
|
-
|
960,937
|
Less share of joint ventures'
revenue
|
|
(25,022)
|
-
|
(25,022)
|
(18,138)
|
(39,383)
|
-
|
(39,383)
|
Group revenue from continuing activities
|
2
|
527,776
|
-
|
527,776
|
453,685
|
921,554
|
-
|
921,554
|
Cost of sales
|
|
(456,680)
|
-
|
(456,680)
|
(387,229)
|
(786,503)
|
-
|
(786,503)
|
Gross profit
|
|
71,096
|
-
|
71,096
|
66,456
|
135,051
|
-
|
135,051
|
Administrative expenses
|
|
(40,209)
|
(2,497)
|
(42,706)
|
(41,088)
|
(75,384)
|
(4,413)
|
(79,797)
|
Other operating income
|
|
2,250
|
-
|
2,250
|
1,695
|
3,865
|
-
|
3,865
|
Share of post-tax result of joint
ventures
|
|
9
|
(134)
|
(125)
|
(127)
|
77
|
(231)
|
(154)
|
Operating profit
|
2
|
33,146
|
(2,631)
|
30,515
|
26,936
|
63,609
|
(4,644)
|
58,965
|
Finance income
|
|
388
|
-
|
388
|
52
|
360
|
-
|
360
|
Finance costs
|
|
(623)
|
-
|
(623)
|
(666)
|
(1,285)
|
-
|
(1,285)
|
Other finance income - defined
benefit pension schemes
|
|
-
|
-
|
-
|
-
|
66
|
-
|
66
|
Profit before income tax
|
2
|
32,911
|
(2,631)
|
30,280
|
26,322
|
62,750
|
(4,644)
|
58,106
|
Income tax expense
|
5
|
(8,190)
|
620
|
(7,570)
|
(5,439)
|
(12,600)
|
1,554
|
(11,046)
|
Profit for the period from continuing
activities
|
|
24,721
|
(2,011)
|
22,710
|
20,883
|
50,150
|
(3,090)
|
47,060
|
Loss for the period from
discontinued operations
|
4
|
|
|
(1,803)
|
(920)
|
|
|
(3,676)
|
Profit for the period attributable to equity holders of the
parent company
|
|
|
|
20,907
|
19,963
|
|
|
43,384
|
|
|
|
|
|
|
|
|
|
Basic earnings per share from
continuing operations
|
6
|
31.29p
|
(2.55)p
|
28.74p
|
26.47p
|
63.47p
|
(3.91)p
|
59.56p
|
Diluted earnings per share from
continuing operations
|
6
|
31.22p
|
(2.54)p
|
28.68p
|
26.39p
|
63.28p
|
(3.90)p
|
59.38p
|
Basic earnings per share
|
6
|
31.29p
|
(4.83)p
|
26.46p
|
25.31p
|
63.47p
|
(8.56)p
|
54.91p
|
Diluted earnings per
share
|
6
|
31.22p
|
(4.82)p
|
26.40p
|
25.23p
|
63.28p
|
(8.54)p
|
54.74p
|
|
|
|
|
|
|
|
|
|
Proposed dividend
|
7
|
|
|
6.33p
|
6.00p
|
|
|
18.00p
|
*Operating profit for the six months
ended 31 March 2023 is stated after charging £2,999,000 of
amortisation cost, £554,000 acquisition cost and a credit of
£2,154,000 goodwill measurement (see Note 3).
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
for the six
months ended 31 March 2024
|
Six
months ended
|
Year
ended
|
|
|
31
March
|
30
September
|
|
|
2024
|
2023
|
2023
|
|
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
£000
|
£000
|
£000
|
|
|
|
|
|
Profit for the period attributable
to equity holders of the parent company
|
|
20,907
|
19,963
|
43,384
|
|
|
|
|
|
Items that will not be reclassified
to profit or loss:
|
|
|
|
|
Movement in actuarial valuation of
the defined benefit pension schemes
|
|
-
|
-
|
387
|
Movement on deferred tax relating to
the defined benefit pension schemes
|
|
-
|
-
|
(106)
|
Total items that will not be reclassified to profit or
loss
|
|
-
|
-
|
281
|
Items that are or may be
reclassified subsequently to profit or loss:
|
|
|
|
|
Exchange movement in
reserves
|
|
-
|
-
|
-
|
Total items that are or may be reclassified subsequently to
profit or loss
|
|
-
|
-
|
|
-
|
Total comprehensive income for the period attributable to
equity holders of the parent company
|
|
20,907
|
19,963
|
|
43,665
|
|
|
|
|
|
| |
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six
months ended 31 March 2024
|
|
Share
|
Capital
|
Share
based
|
|
Total
|
|
Share
|
premium
|
redemption
|
payments
|
Retained
|
equity
|
|
capital
|
account
|
reserve
|
reserve
|
earnings
|
Unaudited
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
At 1 October 2022
|
7,886
|
66,378
|
3,896
|
1,375
|
69,143
|
148,678
|
Transfer from income statement for
the period
|
|
|
|
|
19,963
|
19,963
|
Dividends paid
|
|
|
|
|
(8,936)
|
(8,936)
|
New shares issued
|
27
|
41
|
|
|
|
68
|
Recognition of share based
payments
|
|
|
|
336
|
|
336
|
Vested share option
transfer
|
|
|
|
(777)
|
777
|
-
|
At 31 March 2023
|
7,913
|
66,419
|
3,896
|
934
|
80,947
|
160,109
|
Transfer from income statement for
the period
|
|
|
|
|
23,421
|
23,421
|
Dividends paid
|
|
|
|
|
(4,747)
|
(4,747)
|
Recognition of share based
payments
|
|
|
|
333
|
|
333
|
Actuarial movement recognised in the
pension schemes
|
|
|
|
|
387
|
387
|
Movement on deferred tax relating to
the pension schemes
|
|
|
|
|
(106)
|
(106)
|
At 30 September 2023
|
7,913
|
66,419
|
3,896
|
1,267
|
99,902
|
179,397
|
Transfer from income statement for
the period
|
|
|
|
|
20,907
|
20,907
|
Dividends paid
|
|
|
|
|
(9,497)
|
(9,497)
|
New shares issued
|
1
|
|
|
|
|
1
|
Recognition of share based
payments
|
|
|
|
356
|
|
356
|
Vested share option
transfer
|
|
|
|
(602)
|
(253)
|
(855)
|
At
31 March 2024
|
7,914
|
66,419
|
3,896
|
1,021
|
111,059
|
190,309
|
CONDENSED
CONSOLIDATED BALANCE SHEET
at 31 March
2024
|
|
31 March
|
31
March
|
30
September
|
|
|
2024
|
2023
|
2023
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
£000
|
£000
|
£000
|
Non-current assets
|
|
|
|
|
Intangible assets -
goodwill
|
|
149,517
|
148,805
|
148,805
|
- other
|
|
26,350
|
30,849
|
27,869
|
Property, plant and
equipment
|
|
22,347
|
18,291
|
19,400
|
Right of use assets
|
|
21,609
|
17,414
|
19,174
|
Investment in joint
ventures
|
|
3,852
|
4,009
|
3,979
|
Retirement benefit assets
|
|
2,456
|
2,230
|
2,456
|
Deferred tax assets
|
|
-
|
3,095
|
-
|
|
|
226,131
|
224,693
|
221,683
|
Current assets
|
|
|
|
|
Inventories
|
|
4,002
|
3,566
|
4,169
|
Trade and other
receivables
|
|
193,725
|
168,267
|
187,311
|
Current tax assets
|
|
3,184
|
1,266
|
814
|
Cash and cash equivalents
|
|
42,503
|
17,012
|
35,657
|
|
|
243,414
|
190,111
|
227,951
|
|
|
|
|
|
Total assets
|
|
469,545
|
414,804
|
449,634
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
|
(12,161)
|
(9,554)
|
(10,733)
|
Retirement benefit
obligation
|
|
(822)
|
(1,049)
|
(822)
|
Deferred tax liabilities
|
|
(8,515)
|
(11,360)
|
(7,363)
|
Provisions
|
|
(338)
|
(338)
|
(338)
|
|
|
(21,836)
|
(22,301)
|
(19,256)
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
(233,032)
|
(217,788)
|
(228,677)
|
Lease liabilities
|
|
(7,660)
|
(6,521)
|
(6,945)
|
Provisions
|
|
(16,708)
|
(8,085)
|
(15,359)
|
|
|
(257,400)
|
(232,394)
|
(250,981)
|
|
|
|
|
|
Total liabilities
|
|
(279,236)
|
(254,695)
|
(270,237)
|
|
|
|
|
|
Net
assets
|
|
190,309
|
160,109
|
179,397
|
|
|
|
|
|
Share capital
|
|
7,914
|
7,913
|
7,913
|
Share premium account
|
|
66,419
|
66,419
|
66,419
|
Capital redemption
reserve
|
|
3,896
|
3,896
|
3,896
|
Share based payments
reserve
|
|
1,021
|
934
|
1,267
|
Retained earnings
|
|
111,059
|
80,947
|
99,902
|
Total equity
|
|
190,309
|
160,109
|
179,397
|
|
CONDENSED
CONSOLIDATED CASHFLOW STATEMENT
for the six
months ended 31 March 2024
|
Six months
ended
|
Year
ended
|
|
31 March
|
30
September
|
|
2024
|
2023
|
2023
|
|
Unaudited
|
Unaudited
|
Audited
|
|
£000
|
£000
|
£000
|
Profit for the period from
continuing operating activities
|
22,710
|
20,883
|
47,060
|
Share of post-tax trading result of
joint ventures
|
125
|
127
|
154
|
Amortisation of intangible assets
and goodwill remeasurement
|
2,346
|
712
|
6,014
|
Gain on remeasurement of existing
equity interest
|
-
|
-
|
(2,164)
|
Research and development expenditure
credit
|
(1,556)
|
(725)
|
(1,249)
|
Depreciation
|
5,974
|
5,129
|
10,688
|
Profit on sale of property, plant
and equipment
|
(181)
|
(302)
|
(822)
|
Decrease/(increase) in
inventories
|
179
|
505
|
(1,348)
|
(Increase)/decrease in
receivables
|
(6,024)
|
3,734
|
(14,060)
|
Increase/(decrease) in
payables
|
3,005
|
(4,940)
|
11,247
|
(Credit)/charge in respect of share
options
|
(499)
|
336
|
669
|
Finance income
|
(388)
|
(52)
|
(360)
|
Finance expense
|
623
|
666
|
1,219
|
Interest paid
|
(623)
|
(666)
|
(1,285)
|
Income taxes paid
|
(7,462)
|
(6,136)
|
(11,767)
|
Income tax expense
|
7,570
|
5,439
|
11,046
|
Net
cash inflow from continuing operating activities
|
25,799
|
24,710
|
55,042
|
Net cash outflow from discontinued
operating activities
|
(454)
|
(611)
|
(1,265)
|
Net
cash inflow from operating activities
|
25,345
|
24,099
|
53,777
|
Investing activities
|
|
|
|
Interest received
|
388
|
52
|
360
|
Proceeds on disposal of property,
plant and equipment
|
369
|
422
|
1,251
|
Purchases of property, plant and
equipment
|
(1,115)
|
(1,979)
|
(5,509)
|
Acquisition of subsidiaries net of
cash acquired
|
(4,208)
|
(13,334)
|
(13,324)
|
Net
cash outflow from investing activities
|
(4,566)
|
(14,839)
|
(17,222)
|
|
|
|
|
Financing activities
|
|
|
|
Dividends paid
|
(9,497)
|
(8,936)
|
(13,683)
|
Issue of Ordinary Shares
|
1
|
68
|
68
|
New loan
|
20,000
|
23,000
|
23,000
|
Loan repayments
|
(20,000)
|
(23,000)
|
(23,000)
|
Repayment of obligations under
finance leases
|
(4,437)
|
(3,598)
|
(7,501)
|
Net
cash outflow from financing activities
|
(13,933)
|
(12,466)
|
(21,116)
|
|
|
|
|
Net
increase/(decrease) in continuing cash and cash
equivalents
|
7,300
|
(2,595)
|
16,704
|
Net decrease in discontinued cash
and cash equivalents
|
(454)
|
(611)
|
(1,265)
|
Net
increase/(decrease) in cash and cash equivalents
|
6,846
|
(3,206)
|
15,439
|
Cash and cash equivalents at the
beginning of the period
|
35,657
|
20,218
|
20,218
|
Cash and cash equivalents at the end of the
period
|
42,503
|
17,012
|
35,657
|
|
|
|
|
Bank balances and cash
|
42,503
|
17,012
|
35,657
|
Bank overdraft
|
-
|
-
|
-
|
Cash and cash equivalents at end of period
|
42,503
|
17,012
|
35,657
|
NOTES TO THE
CONDENSED CONSOLIDATED ACCOUNTS
1 Basis of
preparation
a) The condensed
consolidated interim financial report for the six months ended 31
March 2024 and the equivalent period in 2023 has not been audited
or reviewed by the Group's auditor. It does not comprise statutory
accounts within the meaning of Section 435 of the Companies Act
2006. It has been prepared under the historical cost
convention and on a going concern basis in accordance with
applicable law and international accounting standards in conformity
with the requirements of the Companies Act 2006 ("Adopted
IFRSs").
The report does not comply with IAS 34
"Interim Financial Reporting" which is not currently required to be
applied for AIM companies and it was approved by the Directors on
13 May 2024.
b) The accounts for the year ended 30
September 2023 were prepared under UK-adopted International
Accounting Standards and have been delivered to the Registrar of
Companies. The report of the auditor on those accounts was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under Section 498 (2) or (3) of the
Companies Act 2006. In this report, the comparative figures for the
year ended 30 September 2023 have been audited. The comparative
figures for the period ended 31 March 2023 are
unaudited.
c) The accounting policies
applied in preparing the condensed consolidated interim financial
information are the same as those applied in the preparation of the
annual financial statements for the year ended 30 September 2023 as
described in those financial
statements.
d) The principal risks and
uncertainties affecting the Group are unchanged from those set out
in the Group's Accounts for the year ended 30 September 2023.
The Directors have reviewed financial forecasts and are satisfied
that the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, the Group
continues to adopt the going concern basis in preparing the
condensed consolidated interim financial report.
This condensed consolidated interim financial
report is being sent to all shareholders and is also available upon
request from the Company Secretary, Renew Holdings plc, 3175
Century Way, Thorpe Park, Leeds, LS15 8ZB, or via the
website, www.renewholdings.com.
2
Segmental analysis
Operating segments have been identified based
on the internal reporting information provided to the Group's Chief
Operating Decision Maker. From such information, Engineering
Services and Specialist Building have been determined to represent
operating segments.
|
Group
including share of joint ventures
2024
Unaudited
|
Less share
of joint ventures
2024
Unaudited
|
Group
revenue from continuing activities
Six
months ended
31
March
|
Group
including share of joint ventures
2023
Audited
|
Less share
of joint ventures
2023
Audited
|
Group
revenue from continuing activities
Year
ended
30
September
2023
Audited
|
|
2024
Unaudited
|
2023
Unaudited
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
Analysis of revenue
|
|
|
|
|
|
|
|
|
Engineering Services
|
505,382
|
(25,022)
|
480,360
|
417,690
|
887,541
|
(39,383)
|
848,158
|
|
Specialist Building
|
47,416
|
-
|
47,416
|
35,995
|
73,375
|
-
|
73,375
|
|
Segment revenue
|
552,798
|
(25,022)
|
527,776
|
453,685
|
960,916
|
(39,383)
|
921,533
|
|
Central activities
|
-
|
-
|
-
|
-
|
21
|
-
|
21
|
|
Group revenue from continuing operations
|
552,798
|
(25,022)
|
527,776
|
453,685
|
960,937
|
(39,383)
|
921,554
|
|
|
Before
exceptional items and amortisation of intangible
assets
2024
Unaudited
|
Exceptional items and
amortisation of intangible assets
2024
Unaudited
|
Six
months ended
31
March
|
Before
exceptional
items and
amortisation of intangible
assets
2023
Audited
|
Exceptional items and
amortisation of intangible assets
2023
Audited
|
Year
ended
30
September
2023
Audited
|
|
2024
Unaudited
|
2023*
Unaudited
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
Analysis of operating profit
|
|
|
|
|
|
|
|
|
Engineering Services
|
35,059
|
(2,631)
|
32,428
|
28,852
|
64,275
|
(4,084)
|
60,191
|
|
Specialist Building
|
807
|
-
|
807
|
517
|
1,269
|
-
|
1,269
|
|
Segment operating profit
|
35,866
|
(2,631)
|
33,235
|
29,369
|
65,544
|
(4,084)
|
61,460
|
|
Central activities
|
(2,720)
|
-
|
(2,720)
|
(2,433)
|
(1,935)
|
(560)
|
(2,495)
|
|
Operating profit
|
33,146
|
(2,631)
|
30,515
|
26,936
|
63,609
|
(4,644)
|
58,965
|
|
Net financing expense
|
(235)
|
-
|
(235)
|
(614)
|
(859)
|
-
|
(859)
|
|
Profit before income tax
|
32,911
|
(2,631)
|
30,280
|
26,322
|
62,750
|
(4,644)
|
58,106
|
|
|
|
|
|
|
|
|
|
| |
*Operating profit for the six months
ended 31 March 2023 is stated after charging £2,999,000 of
amortisation cost, £554,000 acquisition cost and a credit of
£2,154,000 goodwill remeasurement (see Note 3).
3
Exceptional items and amortisation of intangible
assets
|
Six
months ended
|
|
Year
ended
|
|
31
March
|
|
30
September
|
|
2024
|
|
2023
|
|
2023
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
£000
|
|
£000
|
|
£000
|
Acquisition costs
|
151
|
|
554
|
|
560
|
Total losses arising from
exceptional items
|
151
|
|
554
|
|
560
|
Amortisation of intangible
assets
|
2,480
|
|
2,999
|
|
6,245
|
Goodwill remeasurement
|
-
|
|
(2,154)
|
|
(2,161)
|
Total exceptional items and
amortisation charge before income tax
|
2,631
|
|
1,399
|
|
4,644
|
Taxation credit on exceptional
items and amortisation
|
(620)
|
|
(657)
|
|
(1,554)
|
Total exceptional items and
amortisation charge
|
2,011
|
|
742
|
|
3,090
|
During the
period the Company incurred £151,000 of costs acquiring TIS
(Cumbria) Limited.
4 Loss for
the period from discontinued operations
|
Six
months ended
|
|
Year
ended
|
|
31
March
|
|
30
September
|
|
2024
|
|
2023
|
|
2023
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
£000
|
|
£000
|
|
£000
|
Expenses
|
(1,803)
|
|
(920)
|
|
(3,676)
|
Loss before income tax
|
(1,803)
|
|
(920)
|
|
(3,676)
|
Income tax charge
|
-
|
|
-
|
|
-
|
Loss for the period from
discontinued operations
|
(1,803)
|
|
(920)
|
|
(3,676)
|
The Group has increased provisions
as a result of an internal reassessment of the likely costs
required to settle Allenbuild Ltd's other known contractual
claims.
5 Income
tax expense
|
Six
months ended
|
Year
ended
|
|
31
March
|
30
September
|
|
2024
|
2023
|
2023
|
|
Unaudited
|
Unaudited
|
Audited
|
|
£000
|
£000
|
£000
|
Current tax:
|
|
|
|
UK corporation tax on profit for the
period
|
(6,672)
|
(4,676)
|
(12,447)
|
Adjustments in respect of previous
periods
|
-
|
-
|
1,164
|
Total current tax
|
(6,672)
|
(4,676)
|
(11,283)
|
Deferred tax
|
(898)
|
(763)
|
237
|
Income tax expense
|
(7,570)
|
(5,439)
|
(11,046)
|
|
|
|
|
6 Earnings
per
share
Six months ended 31 March
|
Year
ended 30 September
|
|
|
|
2024
|
|
|
|
2023
|
|
|
|
2023
|
|
|
|
|
Unaudited
|
|
|
|
Unaudited
|
|
|
|
Audited
|
|
|
Earnings
|
EPS
|
DEPS
|
|
Earnings
|
EPS
|
DEPS
|
|
Earnings
|
EPS
|
DEPS
|
|
£000
|
Pence
|
Pence
|
|
£000
|
Pence
|
Pence
|
|
£000
|
Pence
|
Pence
|
Earnings before exceptional items
and amortisation
|
24,721
|
31.29
|
31.22
|
|
21,625
|
27.41
|
27.33
|
|
50,150
|
63.47
|
63.28
|
Exceptional items and
amortisation
|
(2,011)
|
(2.55)
|
(2.54)
|
|
(742)
|
(0.94)
|
(0.94)
|
|
(3,090)
|
(3.91)
|
(3.90)
|
Basic earnings per share -
continuing activities
|
22,710
|
28.74
|
28.68
|
|
20,883
|
26.47
|
26.39
|
|
47,060
|
59.56
|
59.38
|
Loss for the period from
discontinued activities
|
(1,803)
|
(2.28)
|
(2.28)
|
|
(920)
|
(1.16)
|
(1.16)
|
|
(3,676)
|
(4.65)
|
(4.64)
|
Basic earnings per share
|
20,907
|
26.46
|
26.40
|
|
19,963
|
25.31
|
25.23
|
|
43,384
|
54.91
|
54.74
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares
|
|
79,011
|
79,178
|
|
|
78,888
|
79,130
|
|
|
79,011
|
79,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
The dilutive effect of share options
is to increase the number of shares by 167,350 (March 2023:
242,160; September 2023: 242,000) and reduce the basic earnings per
share by 0.06p (March 2023: 0.08p; September 2023:
0.17p).
7
Dividends
The proposed interim dividend is 6.33p (2023:
6.00p) per share. This will be paid out of the Company's available
distributable reserves to shareholders on the register on 7 June
2024, payable on 10 July 2024. The ex-dividend date will be 6
June 2024. In accordance with IAS 1 "Presentation of
Financial Statements", dividends are recorded only when paid and
are shown as a movement in equity rather than as a charge in the
income statement.
8
Acquisition of subsidiary
undertaking - TIS (Cumbria) Limited
On 26 October 2023 West Cumberland Engineering
Ltd, a wholly-owned subsidiary of Renew Holdings Plc, acquired the
whole of the issued share capital of TIS Cumbria Ltd ("TIS") for a
gross cash consideration of £4.2m less a net working capital
adjustment of £1.3m. The net £2.9m acquisition cost was
funded from the Group's cash reserves. There is no deferred
consideration payable.
Based in Cumbria, TIS is a leading nuclear
manufacturing and fabrication specialist. This acquisition will
allow the Group to continue to support its existing clients and
take advantage of increasing demand across the decommissioning and
new nuclear build programmes. The added manufacturing
capacity will allow Renew to better support its existing clients,
as well as strengthening its broader market position. TIS
represents an excellent strategic fit with the Group's existing
multidisciplinary nuclear capability, which offers attractive long
term structural growth opportunities underpinned by highly visible
committed regulatory spend in a sector where the Group has
extensive experience.
The provisional fair value of the
assets and liabilities of TIS at the date of acquisition
were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
value
|
|
|
|
|
|
|
|
£000
|
|
Non-current assets
|
|
|
|
|
|
|
Intangible assets
|
|
|
|
827
|
|
Property, plant and
equipment
|
|
3,894
|
|
Right of use assets
|
|
|
|
|
26
|
|
Inventories
|
|
|
|
12
|
|
Trade and other
receivables
|
|
390
|
|
Current tax asset
|
|
|
|
24
|
|
Total assets
|
|
|
|
|
5,173
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
(1,290)
|
|
Lease liabilities
|
|
|
|
|
(69)
|
|
Trade and other payables
|
|
(1,353)
|
|
Deferred tax liabilities
|
|
(254)
|
|
Total liabilities
|
|
|
|
|
(2,966)
|
|
|
|
|
|
|
|
|
Total identifiable net assets at fair value
|
|
2,207
|
|
|
|
|
|
|
|
|
Goodwill arising on acquisition
|
|
711
|
|
|
|
|
|
|
|
|
|
Purchase consideration transferred
|
|
2,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill of £711,000 arose on
acquisition and is attributed to the expertise and workforce of the
acquired business. Other intangible assets valued at £827,000,
which represent customer relationships and contractual rights, were
also acquired and will be amortised over their useful economic
lives in accordance with IAS 38 and as defined within accounting
policy Note 1.v Intangible assets. Amortisation of this intangible
asset commenced from November 2023. Deferred tax has been provided
on this amount.
Right of use assets and obligations under finance
leases
The Group measured the acquired
lease liabilities using the present value of the remaining lease
payments at the date of acquisition. The right of use assets were
measured at an amount equal to the lease liabilities.
Fair value adjustments arising from the
acquisition
In accordance with IFRS 3, the Board
will review the fair value of assets and liabilities using
information available during the 12 months after the date of
acquisition. Fair value has been calculated using Level 3 inputs as
defined by IFRS 13.
The fair value of trade and other
receivables was £0.4m. The gross amount of trade and other
receivables was £0.4m and it is expected that the full contractual
amounts will be collected.
Transaction costs of £0.2m were
expensed and are included in exceptional items (please see Note
3).
Note 9 Post
balance sheet event
On 9 April 2024, Carnell Group Holdings Ltd, a
wholly-owned subsidiary of Renew Holdings Plc, acquired the whole
of the issued share capital of Route One Holdings (Wakefield) Ltd
("Route One") for an Enterprise value of £5.0m. The cash
consideration will be funded from the Group's existing cash
resources and there is no deferred or contingent consideration
payable.
Based in West Yorkshire, Route One is a
multi-disciplinary specialist engineering business operating in the
UK Highways sector providing end-to-end solutions for bridge deck
maintenance and protection. Route One has a number of
long-term frameworks on the National Highways Scheme Delivery
Frameworks across England.
The acquisition represents an excellent
strategic fit for the Group. Route One will expand Carnell's
offering by adding new capabilities to the Group's highway
business, with particular expertise in bridge and structures
maintenance and repairs. The UK Government's planned
investment in the next Road Investment Strategy (RIS 3) from 2025
to 2030 will provide good growth opportunities, where the
structures renewal programme has been identified as a key
priority.
The acquisition will be reported in more detail
in the final results for the year ending 30 September
2024.