Renew’s (RNWH) numbers were weighed down by the disposal of Forefront – its small-diameter gas pipe business – at the full year mark. The group sold Forefront to Ferns Group for £1 in February this year, taking a loss on it as a discontinued operation and restating the prior year figures. Look at the adjusted numbers, however, and things look better, with operating profit up 9.6 per cent to £31.1m, on a margin of 5.7 per cent, from 5.2 per cent previously.
The other factor weighing on the statutory numbers was the acquisition of rail contractor QTS. The £80m deal pushed the group into a debt position from net cash of £3.9m at FY2017, but it strengthens its position in the UK rail sector at a crucial time. Control Period 6 – the next five-year regulatory period for the rail industry – begins in 2019 and is expected to lead to increased spending and a focus on maintenance and renewal works that Renew is well placed to provide.
House broker Numis is forecasting an adjusted pre-tax profit of £37.1m for the year to September 2019, giving earnings per share of 39.9p (from £30.3m and 35.5p in FY2018).
| RENEW HOLDINGS (RNWH) | ||||
| ORD PRICE: | 365p | MARKET VALUE: | £275m | |
| TOUCH: | 363-370p | 12-MONTH HIGH: | 460p | LOW: 355p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 100p* | NET DEBT: | 28% | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 465 | 13.1 | 16.8 | 5.00 |
| 2015 | 520 | 16.1 | 21.3 | 7.00 |
| 2016 | 526 | 19.4 | 23.5 | 8.00 |
| 2017 (restated) | 544 | 19.8 | 24.5 | 9.00 |
| 2018 | 541 | 14.7 | 13.6 | 10.00 |
| % change | -0.4 | -26 | -44 | +11 |
| Ex-div: | 31 Jan | |||
| Payment: | 8 Mar | |||
| *Includes intangible assets of £121m, or 161p a share | ||||
