RNWH Renew Holdings Plc

 

TIDMRNWH 
 
RNS Number : 2717P 
Renew Holdings PLC 
23 March 2009 
 

Renew Holdings plc 
("Renew" or the "Group") 
 
 
Trading Update 
 
 
Results for the first half of the year are expected to be satisfactory, however 
the outlook has deteriorated and as a result the Board does not now expect the 
Group's results to meet full year market expectations. 
 
 
In Specialist Building, the last two months have been challenging, with project 
cancellations and deferrals leading to reduced trading expectations for the 
second half of this financial year. As a result of these weaker market 
conditions, the Board is acting to reduce capacity in this business stream by a 
further 23%, giving a reduction of 37% over the last year. These cost reductions 
will be implemented progressively through the second half of the year. 
 
 
This action will result in an exceptional charge in the second half of GBP2.5m 
for redundancy and other restructuring costs. The resultant savings in annual 
costs will be more than GBP7m. The Board believes that this further reduced cost 
base positions its Specialist Building business appropriately in the current 
difficult economic climate. The focus in this area will remain on project 
selectivity and quality of earnings.  Operating margins in Specialist Building 
will decrease reflecting the economic pressures currently prevailing in this 
market. 
 
 
In Specialist Engineering, the market and the forward order book remain stable 
with trading for the full year anticipated to be in line with market 
expectations. The Board has decided to reclassify its Rail Infrastructure 
business from Specialist Building into Specialist Engineering as this reflects 
better the nature of work performed. Specialist Engineering is expected to 
represent approximately 40% of Group revenues going forward with operating 
margins remaining stable. 
 
 
The Board intends to continue to strengthen and develop its Specialist 
Engineering activities both organically and by acquisition and can report that 
C.&A. Pumps has integrated well into the Group since its acquisition on 1 
October 2008. 
 
 
The Group has recently reached final account settlement on the last of the 
basket of legacy construction contracts, which were originally provided against 
in 2005. This has led to an exceptional charge of GBP1m which will be reported 
in the first half results. 
 
 
Renew's balance sheet remains debt free with substantial cash resources and the 
Board intends to declare an unchanged interim dividend of 1.0p per share. 
 
 
Renew's interim results for the six months ended 31 March 2009 will be announced 
on Tuesday 19 May 2009. 
 
 
23 March 2009 
 
 
ENQUIRIES: 
 
 
 
+-----------------------------------------+------------------------------+ 
| Renew Holdings plc                      |    Tel: 0113 281 4200        | 
+-----------------------------------------+------------------------------+ 
| Brian May, Chief Executive              |                              | 
+-----------------------------------------+------------------------------+ 
| John Samuel, Group Finance Director     |                              | 
+-----------------------------------------+------------------------------+ 
|                                         |                              | 
+-----------------------------------------+------------------------------+ 
| Brewin Dolphin Investment Banking       |    Tel: 0845 213 4730        | 
+-----------------------------------------+------------------------------+ 
| Andrew Kitchingman                      |                              | 
+-----------------------------------------+------------------------------+ 
| Sean Wyndham-Quin                       |                              | 
+-----------------------------------------+------------------------------+ 
|                                         |                              | 
+-----------------------------------------+------------------------------+ 
| College Hill                            |    Tel: 020 7457 2020        | 
+-----------------------------------------+------------------------------+ 
| Mark Garraway                           |                              | 
+-----------------------------------------+------------------------------+ 
| Adam Aljewicz                           |                              | 
+-----------------------------------------+------------------------------+ 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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