Profits at Renew Holdings jumped 230 per cent in the 12 months to 30 September 2010 despite revenue falling to £290.4 million from £316.6m in 2009.
Before charging £0.6m for exceptionals, Renew’s pre-tax profit was £4.6 million. When taking the exceptional charge into account, profits of £4m represent a 233 per cent increase on the £1.2m the firm made last year.
The strong profit performance was also reflected in the firm’s cash balance, which increased from £14.6m at the end of the last financial year, to £16.2m in the 2010 financial year, which ended 30 September.
Renew chairman R J Harrison said: “The group has made good progress during the year in moving the balance of group revenue further towards specialist engineering in line with our strategy. Our strong order book, debt free balance sheet and healthy cash position provides confidence that the group will deliver growth in both revenue and profits in 2011.”
In line with its previous strategy, Renew has targeted the higher margin specialist engineering sector as its primary focus for growth. Exposure to the specialist sector increased during the year, as Renew secured £127.4m in revenue from the specialist sector. This is equivalent to 44 per cent of the group’s revenue, up from 36 per cent in the last financial year.
Of the firm’s £0.6m exceptional charge, half of this relates to the legal fees it has incurred fighting the OFT fine imposed after the cover pricing investigation.
After an internal investigation, Renew has concluded that the impact of the recent Comprehensive Spending Review on the frim will be limited.
The group’s order book has seen a big increase over the last financial year, rising by 50 per cent, to £304m, compared to £202m at the end of the 2009 financial year.