Renew has been winding down its building business in recent years and today generates 90% of group revenue and more than 95% of operating profit from infrastructure services in such markets as the railways, nuclear decommissioning and water.
It is now planning to pursue work in the highways sector, specifically structures, to get a slice of the government’s £25bn road programme.
For the year to 30th September 2019, Renew’s group revenue grew 11% to £600.6m (2018: £541.5m) and pre-tax profit almost doubled, rising to £27.0m (2018: £14.7m).
It was a record year for the company, partly reflecting a full year's contribution of QTS, a specialist rail services provider acquired in May 2018.
Net debt was reduced during the year from £21.4m to £10.2m.
The year also saw Renew strengthen its market position, securing all the Network Rail CP6 renewals frameworks for which it tendered, and more recently has secured new positions on the CP6 Wales and Western Renewals Frameworks across all five lots, delivering a programme of engineering services to assets including bridges, embankments, tunnels and shafts as well as the delivery of signalling, power and communications schemes.
Its client base in the water sector includes Welsh Water, Wessex Water, Bristol Water and Yorkshire Water.
Chief executive Paul Scott said: “The group's appointment to a number of key frameworks in the period increases our addressable market and provides significant opportunity for continued organic growth. The markets in which we operate remain large and fragmented and, as such, provide the group with the opportunity to grow its Engineering Services business in the UK through selective, earnings enhancing acquisitions that are in line with our strategy. We also continue to seek opportunities in new regulated markets which align with the group's established and proven capabilities.”
He said: “As part of the group's growth strategy, we continue to seek opportunities in new regulated markets that exhibit characteristics and programmes of infrastructure maintenance and renewal spending which align with the group's established and proven capabilities. Our initial focus is on highway structures and technology as well as power infrastructure. In highways, the government announced a £25bn investment in the Road Investment Strategy 2 while investment in the electricity network during RII0-1 is expected to be c.£37bn and focus on improving existing power assets. Entering these markets is part of our long-term strategic plan.”