Renew’s interim results for the six months ended 31st March 2017 show that revenue for the half-year was up 9% to £289.4m (2016 H1: £265.1m).
However, profit before tax was down substantially from £8.8m last year to £4.8m this time. This was because of £7.1m of exceptional items, including a £5.8m impairment charge to cover Renew’s withdrawal from low pressure, small diameter gas pipe replacement activities, which had been making a loss.
“We have repositioned the gas business which is now focused exclusively on medium pressure and larger diameter gas activities in London and the southeast,” explained chief executive Paul Scott. “This market is driven by the long-term 30/30 Iron Mains Replacement Programme which gives good visibility to 2032. A key factor going forward is our exclusive regional position on the medium pressure framework for Southern Gas Networks which is gaining momentum.”
Excluding exceptional items and amortisation charges, Renew’s adjusted pre-tax profit for the first half was up 11% to £12.0m.
The order book at 31st March 2017 was £517m (2016: £515m).
Chairman Roy Harrison said: “Our established strategy of providing engineering services in regulated UK infrastructure markets continues to deliver positive results for Renew. This has been another record half year, with strong growth in both revenue and operating profit. I am particularly pleased with the improvement in group operating margin to 4.2%, on track to meet our target of 4.5% for the year. As a result, the board has increased the interim dividend by 13% and we are confident of delivering full year results in line with market expectations.”