20th May 2014 13:25
LONDON (Alliance News) - Renew Holdings PLC said Tuesday revenue and pretax profit jumped in its first-half, buoyed by a strong performance of its Engineering Services division and increased demand in the Rail business, leading the company to boost its interim dividend for the period by more than a third.
The engineering services firm said pretax profit rose 65% to GBP7.6 million from GBP4.6 million in the first-half 2013. Revenue came in at GBP225.8 million, up 48% from the GBP152.4 million record in the comparable period.
The company reported pretax profit and revenue on an adjusted basis, which excludes amortisation charges.
Renew increased its interim dividend for the half-year by 36% to 1.50 pence per share, up from 1.10 pence per share paid in the comparable period last year.
The company said its order book as of March 31, 2014 stood at GBP427 million, up 18% from GBP361 million in 2013, and that its expected revenue for the second-half of the financial year is fully secured.
In its interim results for the six months to March 31, 2014, the company said revenue in its Engineering Services rose 53% to GBP169.2 million, up from GBP110.4 million - representing 75% of group revenue - as the division's order book rose 17% to GBP306 million from GBP261 million last year.
The Specialist Building business maintained its operating profit at GBP1.0 million on increased revenue of GBP56.6 million from GBP42.0 million.
Subsequent to the period end, the firm announced the GBP17 million acquisition of Clarke Telecom Limited, a leader in the wireless telecoms infrastructure delivery market, a field which is enjoying strong structural growth. CTL is expected to enhance the company's operating margin in the Engineering Services business, said the company.
"Whilst continuing to develop organic growth in Engineering Services, the Group continues to look for earnings enhancing, complementary acquisitions to improve and expand our range of services," said Chief Executive Brian May.
During the first-half of the financial year Renew said that its Rail business experienced very high levels of demand, partly due to the necessary emergency repair works following the very bad weather conditions which caused substantial damage to the rail network most notably in the South West of England.
Due in part to the increased demand in the rail business the Board considers that its first-half results may prove to be slightly higher than those for the second half, both in revenue and operating profit. "The excellent underlying organic growth achieved in the first half, subsequent acquisitive growth and strong order book gives the Board great confidence that the Group will meet market expectations for the full financial year," said Renew.
Chairman R Harrison said that the results are "a positive reflection on the Group's long term strategy of providing engineering services in regulated markets which benefit from established spending plans."
Looking ahead, "The strong order book justifies the Board's confidence that the Group will meet market expectations for the full financial year," added Harrison.
Shares in Renew Holdings were trading 1.80% lower at 243.05 pence per share Tuesday afternoon.
By Alice Attwood; [email protected]; @AliceAtAlliance
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