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Order book boost for Renew

RESULTS: Construction and engineering services specialist Renew Holdings saw an impressive order book hike at the half-year stage, while debt levels are falling sharply
May 21, 2013

Construction and engineering services group Renew Holdings (RNWH) saw its order group jump 19 per cent at the half-year stage to £361m - that effectively secures all of the second half's revenue. Moreover, adjusted operating profit rose 8 per cent in the period to £5.2m.

IC TIP: Buy at 104p

At the divisional level, the engineering services unit's revenue rose 4.8 per cent to £110m, and operating profit here grew 6.5 per cent to £4.9m - helped by a steady stream of nuclear, rail and water infrastructure work. The division now generates 72 per cent of group revenue, up from 58 per cent, and chief executive Brian May says the group is considering engineering services acquisitions. Still, the specialist building operation was hit by delayed construction projects - so revenue here slumped 45 per cent to £42m. Although, Mr May expects a stronger second half and, despite the slow start, profits were flat at £1m, while the unit's order book rose a third to £100m. Cash generation was also strong, helped by falling working capital levels on the back of delayed building work, and net debt fell 54 per cent to £3.2m.

Broker Numis Securities expects full-year adjusted pre-tax profits of £10.4m, giving EPS of 13.5p (from £10m and 13.3p in 2012).

RENEW HOLDINGS (RNWH)

ORD PRICE:104pMARKET VALUE:£62.3m
TOUCH:103-105p12-MONTH HIGH:104pLOW: 70p
DIVIDEND YIELD:3.1%PE RATIO:12
NET ASSET VALUE:20p*NET DEBT:27%

Half-year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20121824.325.341.05
20131524.595.891.10
% change-16+6+10+5

Ex-div: 5 Jun

Payment: 8 Jul

*Includes intangible assets of £28.9m, or 48p a share