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Renew sales rise 23pc as engineering shift pays off

Renew saw revenue climb by 23 per cent in the six months to 30 September as its shift to engineering services paid off.

Announcing preliminary results for the half year, the engineering and construction services firm said sales were up to £356.7 million compared with £290.4m in the same period last year. Pre tax profit – before exceptional items and amortisation – rose 86 per cent from £4.6 million to £8.1m.

The group said its 2009 strategy to achieve at least 50 per cent of revenue from engineering services has been hit a year early, after revenue in this sector rose 39 per cent to £176.7m, with operating profit up 78 per cent to £7.4m.

Those results include seven months of Amco’s trading, the engineering firm Renew acquired in February for £19.8m.

Chairman Roy Harrison OBE said: “The results demonstrate that the group can deliver sustainable, profitable growth from our key markets of energy, environmental and infrastructure. Our strong order book provides us with confidence that this will continue in 2012.”

The majority of infrastructure revenue has been generated in the rail sector as a main provider of maintenance works to Network Rail.

Specialist building revenue increased to £178.9m (2010: £163.1m), with operating profit pre-exceptional items of £1.9m (2010: £1.8m), as the firm focused on London and the Home Counties.

The group order book was down from £304m to £285m, which it said is “entirely due to our planned lower levels of activity in specialist building”. The engineering services order book was £179m (2010: £82m), an increase of 118 per cent.

The firm said the developmernt of engineering services business also improved group operating margin and created a platform of sustainable revenue generated from over 50 framework agreements with major clients, most of which operate in regulated markets.

The board is proposing a final dividend at 2p per share, maintaining the full year dividend at 3p.


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