Renew has announced a fall in revenue and profit in its latest interim results, for the six months ending 31 March 2010.
Revenue sank to £138.6m, compared to £171.6m for the same period a year ago, while pre-tax profit dropped from £2.3m to £1.6m.
The operating margin was also down at 1.2% (H1 2009: 1.8%), though Renew said it improved by 0.2% over the second half of 2009.
The group's order book was up at £289m (H1 2009: £221m), 31% higher than one year ago and 43% higher than last year end. Some £175m of this is secured work which extends beyond the current financial year. The order book excludes the value of work from frameworks.
Renew is debt free with a net cash balance of £10.5m (H1 2009: £17.5m) at the period end. The Board expects the Group's cash balance to increase in the second half.
The group said its strategy remains “to increase revenue in Specialist Engineering both organically and by acquisition whilst maintaining margins in the target range of 3% to 4%”.
Sector highlights
The Specialist Engineering business revenue was stable at £58.6m (H1 2009: £58.2m) and now accounts for 42% of Group revenue compared with 34% at the same stage in 2009. Operating profit during the first half was £1.9m, an increase of 3%. The Specialist Engineering order book stands at £84m.
In nuclear, Shepley Engineers continues to operate on five nuclear licensed sites in the UK with a significant presence at Sellafield. Shepley has secured extensions to three major frameworks with Sellafield during the period, plus work on the Evaporator D, Encapsulated Product Store and Separation Area Ventilation projects at Sellafield worth £23m.
In water, Renew's subsidiaries Seymour and C&A Pumps have framework agreements with Northumbrian Water and Scottish Water until March 2011. Seymour is “actively engaged” in the process of tendering for the AMP5 framework and has been appointed to a water distribution framework by Northumbrian Water.
Renew's Specialist Building business delivered revenue of £81.2m in the period. The forward order book stands at £205m, compared with £130m at the same point in 2009, and includes the award of the £44m Kirklees College Waterfront Campus contract.
In social housing, Allenbuild has a position on 10 social housing framework agreements, which give access to £650m of potential work annually. During the first half more than £65m of work was secured including the £21m Windmill Park project with Notting Hill Home Ownership.
Chief executive Brian May said: “The reduction in capacity made over the last 18 months has sized the business appropriately for current market conditions.
“The benefits of a focused approach to identified target sectors, where experience and specialist capabilities are emphasised, continue to mitigate the risks adherent in a very competitive market.
“The Group remains debt free and has a very strong confirmed order book which gives confidence and opportunity for both the short and medium term.”
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