TIDMRNWH
RNS Number : 4548S
Renew Holdings PLC
19 May 2009
Renew Holdings plc
("Renew" or the "Group")
Interim results for the half year ended 31 March 2009
Renew, the specialist engineering and construction services group, announces
results with operating profit* sustained at GBP3.2m and the interim dividend
maintained at 1.0p.
Financial Highlights
+---------------------------------+-----------+---------------+
| | H1 2009 | H1 2008 |
+---------------------------------+-----------+---------------+
| Revenue | GBP171.6m | GBP192.9m |
+---------------------------------+-----------+---------------+
| Operating profit* | GBP3.2m | GBP3.2m |
+---------------------------------+-----------+---------------+
| Profit before tax* | GBP3.5m | GBP3.9m |
+---------------------------------+-----------+---------------+
| Adjusted earnings per share* | 5.22p | 5.82p |
+---------------------------------+-----------+---------------+
| Earnings per share | 3.74p | 5.61p |
+---------------------------------+-----------+---------------+
| Dividend per share | 1.0p | 1.0p |
+---------------------------------+-----------+---------------+
*prior to exceptional items and amortisation charges
Operational Highlights
* Operating margin* increased to 1.8% (2008: 1.7%)
* Group order book at 31 March 2009 GBP221m (30 September 2008: GBP219m)
* 77% of orders secured in the period from specialist sectors
* Specialist Engineering growth of 15%
* Specialist Engineering now expected to represent 40% of Group revenue going
forward
* Decisive action taken to reduce capacity in Specialist Building, providing
annual savings of GBP7m
* Net cash balance GBP17.5m (2008: GBP25.7m)
* Two bolt-on Specialist Engineering acquisitions enhancing offering in Water and
Nuclear sectors
* Interim dividend maintained at 1.0p (2008: 1.0p)
Roy Harrison OBE, Chairman, commented:
"The economic climate continues to provide a challenging business environment.
Despite these difficult trading conditions, our Specialist Engineering business
has continued to grow with stable margins. Our healthy cash position and debt
free balance sheet adds security to the resilient characteristics of our
specialist businesses."
19 May 2009
+------------------------------------------------+--------------------------+
| Renew Holdings plc | Tel: 0113 281 4200 |
+------------------------------------------------+--------------------------+
| Brian May, Group Chief Executive | |
+------------------------------------------------+--------------------------+
| John Samuel, Group Finance Director | |
+------------------------------------------------+--------------------------+
| | |
+------------------------------------------------+--------------------------+
| Brewin Dolphin | Tel: 0845 213 4730 |
+------------------------------------------------+--------------------------+
| Andrew Kitchingman | |
+------------------------------------------------+--------------------------+
| Sean Wyndham-Quin | |
+------------------------------------------------+--------------------------+
| | |
+------------------------------------------------+--------------------------+
| College Hill | Tel: 020 7457 2020 |
+------------------------------------------------+--------------------------+
| Adam Aljewicz | |
+------------------------------------------------+--------------------------+
| Mark Garraway | |
+------------------------------------------------+--------------------------+
CHAIRMAN'S STATEMENT
The six months ended 31 March 2009 has produced satisfactory results with Group
operating profit, prior to exceptional items and amortisation charges, of
GBP3.2m (2008: GBP3.2m) on revenue of GBP171.6m (2008: GBP192.9m). This
improvement in operating margin from 1.7% to 1.8% reflects the Group's continued
emphasis on quality of earnings rather than revenue growth.
Group profit after tax, prior to exceptional items and amortisation charges, was
GBP3.1m (2008: GBP3.5m). An exceptional charge of GBP1.0m relating to the final
account settlement of the last legacy construction contract has been borne in
the first half. A tax charge of GBP0.1m has been sustained all of which relates
to deferred tax. No current year corporation tax charge is expected for the
year. Earnings per share, prior to exceptional items and amortisation charges,
were 5.22p (2008: 5.82p).
As previously announced, the deteriorating market conditions in Specialist
Building necessitate a 23% reduction in capacity and an exceptional charge of
GBP2.5m for redundancy and other restructuring costs in the second half of the
financial year. Annual savings of over GBP7m will result.
The Board is maintaining the interim dividend at 1.0p per share (2008: 1.0p)
which will be paid on 6 July 2009 to shareholders on the register on 5 June
2009.
In October 2008, we acquired C.&A. Pumps Limited ("C.&A.") which added to our
Water industry capability. In May 2009, we agreed to acquire Mothersill
Engineering, a specialist machining and fabrication business, which enhances our
offering to the Nuclear industry.
The Group's net cash balance was GBP17.5m (2008: GBP25.7m). The reduction mainly
comprises the outflow of working capital attributable to lower revenue, the
GBP1.8m acquisition of C.&A. and the GBP3.0m cash settlement of the legacy BB&EA
pension scheme statutory debt.
The Group's strategy remains to grow our Specialist Engineering business both
organically and by acquisition. Specialist Engineering is currently expected to
represent 40% of future revenue and 70% of operating profit. We remain active in
seeking out further complementary acquisitions.
In Specialist Building, the Board has acted promptly and decisively to reduce
the operational fixed cost base in response to deteriorating market conditions.
While the current trading conditions endure for Specialist Building, the Group
will continue to focus on project selectivity, risk management and cost control
to ensure that this business stream remains profitable albeit on lower levels of
activity.
Our balance sheet remains debt free with substantial cash resources enabling the
Group to take advantage of selective opportunities as they arise. The specialist
nature of our business provides a resilient platform for the Group to trade
profitably through the recession.
ROY HARRISON OBE
Chairman
19 May 2009
CHIEF EXECUTIVE'S REVIEW
Overview
Our Specialist Engineering business grew first half revenue by 15% from GBP50.4m
to GBP58.2m. Operating profit also grew by 14% from GBP1.9m to GBP2.2m in the
period. This represented 70% (2008: 63%) of Group operating profit and an
operating margin of 3.8% (2008: 3.9%), and reflects the growing importance of
Specialist Engineering to the Group. The Board has reclassified our Rail
infrastructure activities from Specialist Building to Specialist Engineering as
this reflects better the nature of work carried out.
Specialist Building recorded an operating profit of GBP1.7m (2008: GBP2.4m) on
revenue of GBP113.4m (2008: GBP139.7m). The lower operating margin of 1.5%
(2008: 1.7%) and the reduced revenue reflect the difficult economic
circumstances within which this business stream is operating, and, as previously
announced, further reductions in both revenue and margin are expected to occur
in the second half. Emphasis has remained on project selectivity both to manage
risk and to protect quality of earnings.
The Group's order book at 31 March 2009 was GBP221m compared to GBP219m at 30
September 2008 and GBP248m one year ago. 41% of this is in Specialist
Engineering. The order book excludes potential workflow from the Group's 35
framework agreements, 15 of which are in Specialist Engineering. It is the
Board's continuing view that the potential value of these frameworks should not
be included in the confirmed order book. During the first half, 85% of work
secured in the period was in the public sector. 77% of orders secured were in
our specialist sectors with 75% on negotiated or two stage terms and 86% with
repeat customers.
Review of Operations
Specialist Engineering
Nuclear
Shepley Engineers continues to be engaged at five different Nuclear licensed
sites including a major presence at Sellafield where it has been operating for
over 50 years and continues to be the largest Tier 2 mechanical and electrical
contractor.
The majority of the workload is secured through four Sellafield frameworks all
of which have been extended during the period. In addition, preferred bidder
positions are expected to provide a further GBP10m of revenue over the next two
years.
In May 2009, we agreed the acquisition of Mothersill Engineering, a specialist
machining and fabrication business located near Sellafield and serving the
Nuclear industry, for GBP0.4m in cash. In the year ended 31 December 2008,
Mothersill recorded revenue of GBP0.8m and an operating profit of GBP0.2m.
Safety remains of primary importance and, in addition to receiving a number of
awards during the period, both Shepley and its subsidiary PPS Electrical
achieved the milestone of 1m man hours without a reportable accident.
Land Remediation
As anticipated, due to the downturn in the UK house building industry, activity
in our specialist land remediation business, VHE, remains subdued and supports
our decision to reposition this business last year. This repositioning was
marked by the significant award of the GBP15m Cudworth and West Green Bypass for
Barnsley MBC, our fifth recent project for this client.
Remediation activity continues to be secured through opportunities arising under
Part 11A of the Environment Act and from our National Grid Properties framework.
Water
Seymour and C.&A. currently have five frameworks with Northumbrian Water ("NWL")
and the Environment Agency ("EA"). The largest framework, with NWL under AMP4,
continues until 2011 and during the period experienced good activity levels with
over GBP8m of new projects secured. Both businesses are in the process of new
framework negotiations with these and other clients.
In October 2008, we acquired C.&A. for GBP1.8m. Together, Seymour and C.&A. form
a GBP30m specialist Water business in the North East. Since the acquisition,
C.&A. has performed in line with expectations, securing one of its largest ever
projects, from NWL, during the period.
Rail
In October 2008, YJL Infrastructure was appointed to the Vendor Capital
Programme framework with London Underground. In the first six months, we have
received three significant orders. These include major upgrades to Marble Arch
and Notting Hill Gate underground stations jointly valued at GBP30m. During the
period, we have extended our client base and successfully completed a complex
GBP5m project to create a Peak Hour Subway at Waterloo for Network Rail.
Specialist Building
Social Housing
Following the recent success in securing a framework with Notting Hill Housing
Trust, Allenbuild now has a position on 10 frameworks which jointly provide
access to a GBP650m market. During the period we successfully completed the
GBP16m Mare Street project for Metropolitan Housing and secured over GBP40m of
new orders including projects for Network Housing (GBP14m), Hexagon Housing
(GBP13m) and Genesis Housing (GBP9m).
Retail
As anticipated the retail sector has been quiet throughout the first six months
of the year, although a number of smaller value projects have been secured with
repeat clients.
Science and Education
In addition to four existing frameworks in the North West, Allenbuild has also
been appointed to the LHC Education Framework for the North which is expected to
provide annual opportunities of GBP20m for a four year period. Contracts secured
in the period included projects for Liverpool Hope University and Wakefield MBC.
Work is nearing completion on the Queen Mary Innovation Centre (GBP20m) and the
science fit out project for Eisai Pharmaceuticals (GBP12m). Allenbuild remains
in preferred builder status for the GBP58m Kirklees College Waterfront project.
Restoration and Refurbishment
The high-end residential sector in London continues to provide good workload for
Walter Lilly. Work continues on the GBP37m scheme at Grosvenor Crescent and a
GBP25m private residence in Regents Park. We are preferred bidder on a further
GBP38m project for a private client in London. During the period we were also
awarded the 7 July Memorial in Hyde Park, work at Chiswick House and the first
phase of the restoration of the cast iron roof at the Palace of Westminster.
BRIAN MAY
Chief Executive
19 May 2009
Group Income Statement
for the six months ended 31 March 2009
+---------------------------+-------+--------------+--------------+------+------------+-----------+--------------+--------------+-----------+
| |Notes | Before | Exceptional | Six months | Six | Before | Exceptional | Year |
| | | Exceptional | items and | ended | months | Exceptional | items and | ended |
| | | items and | amortisation | 31 March | ended | items and | amortisation | 30 |
| | | amortisation | of | | 31 | amortisation | of | September |
| | | of | intangible | | March | of | intangible | |
| | | intangible | assets | | | intangible | assets | |
| | | assets | (see Note 2) | | | assets | (see Note 2) | |
+---------------------------+-------+--------------+--------------+-------------------+-----------+--------------+--------------+-----------+
| | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| | | Unaudited | Unaudited | Unaudited | Unaudited | Audited | Audited | Audited |
| | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| | | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Group revenue from | 2 | 171,602 | - | 171,602 | 192,850 | 390,557 | - | 390,557 |
| continuing activities | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Cost of sales | | (150,351) | (1,006) | (151,357) | (169,232) | (347,820) | - | (347,820) |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Gross profit | | 21,251 | (1,006) | 20,245 | 23,618 | 42,737 | - | 42,737 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Administrative expenses | | (18,092) | (162) | (18,254) | (20,532) | (35,137) | (2,765) | (37,902) |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Operating profit | 2 | 3,159 | (1,168) | 1,991 | 3,086 | 7,600 | (2,765) | 4,835 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Finance income | | 395 | - | 395 | 800 | 1,618 | - | 1,618 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Finance costs | | (41) | - | (41) | (207) | (254) | - | (254) |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Other finance income - | | - | - | - | 250 | 543 | - | 543 |
| defined benefit pension | | | | | | | | |
| scheme | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Profit before income tax | 2 | 3,513 | (1,168) | 2,345 | 3,929 | 9,507 | (2,765) | 6,742 |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Income tax expense | 3 | (389) | 282 | (107) | (569) | (2,209) | 727 | (1,482) |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Profit for the period | | 3,124 | (886) | 2,238 | 3,360 | 7,298 | (2,038) | 5,260 |
| attributable to equity | | | | | | | | |
| holders of the parent | | | | | | | | |
| company | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Basic earnings per share | 4 | | | 3.74p | 5.61p | | | 8.78p |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Diluted earnings per | 4 | | | 3.62p | 5.47p | | | 8.55p |
| share | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| | | | | | | | | |
+---------------------------+-------+--------------+---------------------+------------+-----------+--------------+--------------+-----------+
| Proposed dividend | 5 | | | 1.00p | 1.00p | | | 2.00p |
+---------------------------+-------+--------------+--------------+------+------------+-----------+--------------+--------------+-----------+
There were no exceptional items in the six months ended 31 March 2008.
Administrative expenses for that period included an amortisation charge of
GBP124,000.
Group Statement of Recognised Income and Expense
for the six months ended 31 March 2009
+----------------------------------------------+--------------+---------------+------------+
| | Six months | Six months | Year ended |
| | ended 31 | ended 31 | 30 |
| | March | March | September |
+----------------------------------------------+--------------+---------------+------------+
| | 2009 | 2008 | 2008 |
+----------------------------------------------+--------------+---------------+------------+
| | Unaudited | Unaudited | Audited |
+----------------------------------------------+--------------+---------------+------------+
| | GBP000 | GBP000 | GBP000 |
+----------------------------------------------+--------------+---------------+------------+
| | | | |
+----------------------------------------------+--------------+---------------+------------+
| Profit for the period attributable to equity | 2,238 | 3,360 | 5,260 |
| holders of the parent company | | | |
+----------------------------------------------+--------------+---------------+------------+
| Exchange movements in reserves | 1,279 | 20 | 574 |
+----------------------------------------------+--------------+---------------+------------+
| Movements in actuarial deficit | - | - | (497) |
+----------------------------------------------+--------------+---------------+------------+
| Movement on deferred tax relating to the | - | - | 116 |
| defined pension scheme | | | |
+----------------------------------------------+--------------+---------------+------------+
| Total recognised income and expense for the | 3,517 | 3,380 | 5,453 |
| period attributable to equity holders of the | | | |
| parent company | | | |
+----------------------------------------------+--------------+---------------+------------+
+--------------------------+-------+------------+------------+----------------+
| Group Balance Sheet | | | |
+----------------------------------+------------+------------+----------------+
| at 31 March 2009 | | | | |
+--------------------------+-------+------------+------------+----------------+
| |Notes | 31 March | 31 March | 30 September |
+--------------------------+-------+------------+------------+----------------+
| | | 2009 | 2008 | 2008 |
+--------------------------+-------+------------+------------+----------------+
| | | Unaudited | Unaudited | Audited |
+--------------------------+-------+------------+------------+----------------+
| | | GBP000 | GBP000 | GBP000 |
+--------------------------+-------+------------+------------+----------------+
| Non-current assets | | | | |
+--------------------------+-------+------------+------------+----------------+
| Intangible assets: | | 9,351 | 8,516 | 8,548 |
| goodwill | | | | |
+--------------------------+-------+------------+------------+----------------+
| Intangible assets: other | | 621 | 744 | 620 |
+--------------------------+-------+------------+------------+----------------+
| Property, plant and | | 5,719 | 5,035 | 4,503 |
| equipment | | | | |
+--------------------------+-------+------------+------------+----------------+
| Deferred tax assets | | 3,962 | 4,987 | 4,069 |
+--------------------------+-------+------------+------------+----------------+
| | | 19,653 | 19,282 | 17,740 |
+--------------------------+-------+------------+------------+----------------+
| Current assets | | | | |
+--------------------------+-------+------------+------------+----------------+
| Inventories | | 8,557 | 8,499 | 6,367 |
+--------------------------+-------+------------+------------+----------------+
| Trade and other | | 80,008 | 94,149 | 87,766 |
| receivables | | | | |
+--------------------------+-------+------------+------------+----------------+
| Current tax assets | | - | - | 455 |
+--------------------------+-------+------------+------------+----------------+
| Cash and cash | | 17,656 | 25,817 | 28,289 |
| equivalents | | | | |
+--------------------------+-------+------------+------------+----------------+
| | | 106,221 | 128,465 | 122,877 |
+--------------------------+-------+------------+------------+----------------+
| | | | | |
+--------------------------+-------+------------+------------+----------------+
| Total assets | | 125,874 | 147,747 | 140,617 |
+--------------------------+-------+------------+------------+----------------+
| | | | | |
+--------------------------+-------+------------+------------+----------------+
| Non-current liabilities | | | | |
+--------------------------+-------+------------+------------+----------------+
| Obligations under | | (12) | (59) | (10) |
| finance leases | | | | |
+--------------------------+-------+------------+------------+----------------+
| Retirement benefit | | (518) | (2,702) | (1,479) |
| obligations | | | | |
+--------------------------+-------+------------+------------+----------------+
| Deferred tax liabilities | | (306) | (418) | (256) |
+--------------------------+-------+------------+------------+----------------+
| Provisions | | (1,068) | (1,172) | (1,068) |
+--------------------------+-------+------------+------------+----------------+
| | | (1,904) | (4,351) | (2,813) |
+--------------------------+-------+------------+------------+----------------+
| Current liabilities | | | | |
+--------------------------+-------+------------+------------+----------------+
| Borrowings | | (139) | (85) | (110) |
+--------------------------+-------+------------+------------+----------------+
| Trade and other payables | | (106,402) | (126,751) | (119,246) |
+--------------------------+-------+------------+------------+----------------+
| Obligations under | | (48) | (243) | (67) |
| finance leases | | | | |
+--------------------------+-------+------------+------------+----------------+
| Current tax liabilities | | - | (1,049) | (159) |
+--------------------------+-------+------------+------------+----------------+
| Provisions | | (689) | (2,530) | (3,941) |
+--------------------------+-------+------------+------------+----------------+
| | | (107,278) | (130,658) | (123,523) |
+--------------------------+-------+------------+------------+----------------+
| | | | | |
+--------------------------+-------+------------+------------+----------------+
| Total liabilities | | (109,182) | (135,009) | (126,336) |
+--------------------------+-------+------------+------------+----------------+
| | | | | |
+--------------------------+-------+------------+------------+----------------+
| Net assets | | 16,692 | 12,738 | 14,281 |
+--------------------------+-------+------------+------------+----------------+
| | | | | |
+--------------------------+-------+------------+------------+----------------+
| Share capital | | 5,990 | 5,990 | 5,990 |
+--------------------------+-------+------------+------------+----------------+
| Share premium account | | 5,893 | 5,893 | 5,893 |
+--------------------------+-------+------------+------------+----------------+
| Capital redemption | | 3,896 | 3,896 | 3,896 |
| reserve | | | | |
+--------------------------+-------+------------+------------+----------------+
| Cumulative translation | | 1,703 | (130) | 424 |
| adjustment | | | | |
+--------------------------+-------+------------+------------+----------------+
| Share based payments | | 323 | 165 | 233 |
| reserve | | | | |
+--------------------------+-------+------------+------------+----------------+
| Profit and loss account | | (1,113) | (3,076) | (2,155) |
+--------------------------+-------+------------+------------+----------------+
| Total equity | 6 | 16,692 | 12,738 | 14,281 |
+--------------------------+-------+------------+------------+----------------+
+-----------------------------------+------------+------------+--------------+
| Group Cash Flow Statement | | |
+------------------------------------------------+------------+--------------+
| for the six months ended 31 March 2009 | | |
+------------------------------------------------+------------+--------------+
| | Six months | Six months | Year ended |
| | ended | ended | |
+-----------------------------------+------------+------------+--------------+
| | 31 March | 31 March | 30 September |
+-----------------------------------+------------+------------+--------------+
| | 2009 | 2008 | 2008 |
+-----------------------------------+------------+------------+--------------+
| | Unaudited | Unaudited | Audited |
+-----------------------------------+------------+------------+--------------+
| | GBP000 | GBP000 | GBP000 |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Profit for the period | 2,238 | 3,360 | 5,260 |
+-----------------------------------+------------+------------+--------------+
| Amortisation of intangible assets | 162 | 124 | 248 |
+-----------------------------------+------------+------------+--------------+
| Depreciation | 796 | 834 | 1,708 |
+-----------------------------------+------------+------------+--------------+
| Profit on sale of property, plant | (19) | (94) | (262) |
| and equipment | | | |
+-----------------------------------+------------+------------+--------------+
| (Increase)/decrease in | (598) | (2,015) | 716 |
| inventories | | | |
+-----------------------------------+------------+------------+--------------+
| Decrease/(increase) in | 9,429 | (8,806) | 2,405 |
| receivables | | | |
+-----------------------------------+------------+------------+--------------+
| (Decrease)/increase in payables | (18,155) | 9,891 | (1,599) |
+-----------------------------------+------------+------------+--------------+
| Current service costs in respect | 36 | 36 | 72 |
| of defined benefit pension scheme | | | |
+-----------------------------------+------------+------------+--------------+
| Cash contribution to defined | (997) | (893) | (2,106) |
| benefit pension scheme | | | |
+-----------------------------------+------------+------------+--------------+
| Expense in respect of share | 90 | 68 | 136 |
| options | | | |
+-----------------------------------+------------+------------+--------------+
| Finance income | (395) | (1,050) | (2,161) |
+-----------------------------------+------------+------------+--------------+
| Finance costs | 41 | 207 | 254 |
+-----------------------------------+------------+------------+--------------+
| Interest paid | (41) | (207) | (254) |
+-----------------------------------+------------+------------+--------------+
| Income taxes received/(paid) | 296 | - | (1,344) |
+-----------------------------------+------------+------------+--------------+
| Income tax expense | 107 | 569 | 1,482 |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Net cash (outflow)/inflow from | (7,010) | 2,024 | 4,555 |
| operating activities | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Investing activities | | | |
+-----------------------------------+------------+------------+--------------+
| Interest received | 395 | 800 | 1,618 |
+-----------------------------------+------------+------------+--------------+
| Proceeds on disposal of property, | 79 | 194 | 1,267 |
| plant and equipment | | | |
+-----------------------------------+------------+------------+--------------+
| Purchases of property, plant and | (1,191) | (781) | (2,028) |
| equipment | | | |
+-----------------------------------+------------+------------+--------------+
| Acquisition of subsidiary net of | (1,828) | - | (32) |
| cash acquired | | | |
+-----------------------------------+------------+------------+--------------+
| Net cash (outflow)/inflow from | (2,545) | 213 | 825 |
| investing activities | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Financing activities | | | |
+-----------------------------------+------------+------------+--------------+
| Dividends paid | (1,196) | (719) | (1,317) |
+-----------------------------------+------------+------------+--------------+
| Repayment of obligations under | (71) | (245) | (470) |
| finance leases | | | |
+-----------------------------------+------------+------------+--------------+
| Net cash outflow from financing | (1,267) | (964) | (1,787) |
| activities | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Net (decrease)/increase in cash | (10,822) | 1,273 | 3,593 |
| and cash equivalents | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Cash and cash equivalents at | 28,179 | 24,400 | 24,400 |
| beginning of period | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Effect of foreign exchange rate | 160 | 59 | 186 |
| changes | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Cash and cash equivalents at end | 17,517 | 25,732 | 28,179 |
| of period | | | |
+-----------------------------------+------------+------------+--------------+
| | | | |
+-----------------------------------+------------+------------+--------------+
| Bank balances and cash | 17,656 | 25,817 | 28,289 |
+-----------------------------------+------------+------------+--------------+
| Bank overdrafts | (139) | (85) | (110) |
+-----------------------------------+------------+------------+--------------+
| | 17,517 | 25,732 | 28,179 |
+-----------------------------------+------------+------------+--------------+
NOTES TO THE ACCOUNTS
Note 1. Basis of preparation
(a) The interim financial report for the six months ended 31 March 2009 and the
equivalent period in 2008 have not been audited or reviewed by the Group's
auditors. They do not comprise statutory accounts within the meaning of Section
240 of the Companies Act 1985. They have been prepared under the historical cost
convention and on a going concern basis in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union. This
interim financial report does not comply with IAS34 "Interim Financial
Reporting", which is not currently required to be applied for AIM companies. The
Group has reclassified the activities of its rail infrastructure subsidiary, YJL
Infrastructure Limited, from its building segment to its engineering segment and
restated the comparative figures accordingly. This interim report was approved
by the Directors on 19 May 2009.
(b) The accounts for the year ended 30 September 2008 were prepared under IFRS.
The auditors issued an unqualified opinion on them and they have been delivered
to the Registrar of Companies. In this report, the comparative figures for the
year ended 30 September 2008 have been audited. The comparative figures for the
period ended 31 March 2008 are unaudited.
(c) The Directors are satisfied that the Group has adequate resources to
continue in operational existence for the foreseeable future.
This interim statement is being sent to all shareholders and is also available
upon request from the Company Secretary, Renew Holdings plc, Yew Trees, Main
Street North, Aberford, West Yorkshire LS25 3AA, or via the website
www.renewholdings.com.
Note 2. Segmental analysis
For management purposes the Group is organised into three business streams:
Building, Engineering, and Property and central activities. These operating
segments are the basis on which the Group reports its primary segmental
information.
Segmental information about the Group's continuing operations is presented
below:
+-------------------------------+------------------+---------------+--------------+
| | Six months ended | Six months | Year ended |
| | 31 March | ended | 30 September |
| | | 31 March | |
+-------------------------------+------------------+---------------+--------------+
| | 2009 | 2008 | 2008 |
+-------------------------------+------------------+---------------+--------------+
| | Unaudited | Unaudited | Audited |
+-------------------------------+------------------+---------------+--------------+
| Revenue is analysed as | GBP000 | GBP000 | GBP000 |
| follows: | | | |
+-------------------------------+------------------+---------------+--------------+
| | | | |
+-------------------------------+------------------+---------------+--------------+
| Building | 113,419 | 139,697 | 287,044 |
+-------------------------------+------------------+---------------+--------------+
| Engineering | 58,210 | 50,420 | 100,795 |
+-------------------------------+------------------+---------------+--------------+
| Property and central | 8 | 5,674 | 8,213 |
| activities | | | |
+-------------------------------+------------------+---------------+--------------+
| Inter divisional revenue | (35) | (2,941) | (5,495) |
+-------------------------------+------------------+---------------+--------------+
| | | | |
+-------------------------------+------------------+---------------+--------------+
| Group revenue from continuing | 171,602 | 192,850 | 390,557 |
| operations | | | |
+-------------------------------+------------------+---------------+--------------+
Note 2. Segmental analysis (continued)
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| | Before | Exceptional | Six | Six | Before | Exceptional | Year |
| | Exceptional | items and | months | months | Exceptional | items and | Ended |
| | items and | amortisation | ended | ended | items and | amortisation | 30 |
| | amortisation | of | 31 | 31 | amortisation | of | September |
| | of | intangible | March | March | of | intangible | 2008 |
| | intangible | assets | 2009 | 2008 | intangible | assets | Audited |
| | assets | 2009 | Unaudited | Unaudited | assets | 2009 | |
| | 2009 | Unaudited | | | 2009 | Audited | |
| | Unaudited | | | | Audited | | |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Analysis of | | | | | | | |
| operating profit | | | | | | | |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Building | 1,660 | - | 1,660 | 2,371 | 4,892 | (889) | 4,003 |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Engineering | 2,214 | (1,006) | 1,208 | 1,942 | 3,469 | (361) | 3,108 |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Property and central | (715) | (162) | (877) | (1,227) | (761) | (1,515) | (2,276) |
| activities | | | | | | | |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Operating profit | 3,159 | (1,168) | 1,991 | 3,086 | 7,600 | (2,765) | 4,835 |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Net finance income | 354 | - | 354 | 843 | 1,907 | - | 1,907 |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| Profit before income | 3,513 | (1,168) | 2,345 | 3,929 | 9,507 | (2,765) | 6,742 |
| tax | | | | | | | |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
| | | | | | | | |
+----------------------+--------------+--------------+-----------+-----------+--------------+--------------+-----------+
Exceptional items and amortisation of intangible assets
+----------------------------+--------------+--+-------------+--+----------+-----------+
| | Six months | | Six months | | Year ended |
| | ended | | ended | | |
+----------------------------+--------------+--+-------------+--+----------------------+
| | 31 March | | 31 March | | 30 September |
+----------------------------+--------------+--+-------------+--+----------------------+
| | 2009 | | 2008 | | 2008 |
+----------------------------+--------------+--+-------------+--+----------+
| | Unaudited | | Unaudited | | Audited |
+----------------------------+--------------+--+-------------+--+----------+
| | GBP000 | | GBP000 | | GBP000 |
+----------------------------+--------------+--+-------------+--+----------+
| Loss on legacy final | 1,006 | | - | | - |
| account settlement | | | | | |
+----------------------------+--------------+--+-------------+--+----------+
| Redundancy costs | - | | - | | 1,471 |
+----------------------------+--------------+--+-------------+--+----------+
| Costs in relation to BB&EA | - | | - | | 1,168 |
| pension scheme | | | | | |
+----------------------------+--------------+--+-------------+--+----------+
| Profit on disposal of | - | | - | | (122) |
| plant fleet | | | | | |
+----------------------------+--------------+--+-------------+--+----------+
| Total exceptional items | 1,006 | | - | | 2,517 |
+----------------------------+--------------+--+-------------+--+----------+
| Amortisation of intangible | 162 | | 124 | | 248 |
| assets | | | | | |
+----------------------------+--------------+--+-------------+--+----------+
| | 1,168 | | 124 | | 2,765 |
+----------------------------+--------------+--+-------------+--+----------+-----------+
Exceptional items comprise GBP1,006,000 in respect of a final account settlement
on the last of the basket of legacy construction contracts, which were
originally provided against in 2005. Amortisation charges relate to the fair
value ascribed to intangible assets other than goodwill arising from the
acquisitions of Seymour (C.E.C) Holdings Limited and C. & A. Pumps Limited.
Note 3. Income tax expense
+------------------------------+----------------+-------------+-----------+
| | Six months | Six months | Year |
| | ended | ended | ended 30 |
| | 31 March | 31 March | September |
+------------------------------+----------------+-------------+-----------+
| | 2009 | 2008 | 2008 |
+------------------------------+----------------+-------------+-----------+
| | Unaudited | Unaudited | Audited |
+------------------------------+----------------+-------------+-----------+
| | GBP000 | GBP000 | GBP000 |
+------------------------------+----------------+-------------+-----------+
| Current tax: | | | |
+------------------------------+----------------+-------------+-----------+
| UK corporation tax on | - | (569) | (159) |
| profits for the period | | | |
+------------------------------+----------------+-------------+-----------+
| Adjustments in respect of | - | - | (409) |
| previous periods | | | |
+------------------------------+----------------+-------------+-----------+
| | - | (569) | (568) |
+------------------------------+----------------+-------------+-----------+
| Foreign tax | - | - | (51) |
+------------------------------+----------------+-------------+-----------+
| Total current tax | - | (569) | (619) |
+------------------------------+----------------+-------------+-----------+
| Deferred tax | (107) | - | (863) |
+------------------------------+----------------+-------------+-----------+
| Income tax expense | (107) | (569) | (1,482) |
+------------------------------+----------------+-------------+-----------+
The Group has unused tax losses available to carry forward against future
taxable profits, although a significant element of these losses relates to
activities which are not forecast to generate the level of profits needed to
utilise these losses. A related deferred tax asset of GBP3,660,000 (2008:
GBP3,990,000) has been recognised to the extent considered reasonable by the
directors.
Note 4. Earnings per share
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | 6 months ended 31 March | | 6 months ended 31 March | Year ended 30 September |
+----------+----------+--------------------------------+----------+-------------------------------------------+--------------------------------+
| | | | 2009 | | | | 2008 | | | | 2008 | |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | Earnings | EPS | DEPS | | Earnings | EPS | DEPS | | Earnings | EPS | DEPS |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | GBP000 | Pence | Pence | | GBP000 | Pence | Pence | | GBP000 | Pence | Pence |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Earnings before | 3,124 | 5.22 | 5.05 | | 3,484 | 5.82 | 5.68 | | 7,298 | 12.18 | 11.87 |
| exceptional costs | | | | | | | | | | | |
| and amortisation | | | | | | | | | | | |
+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Exceptional costs | (886) | (1.48) | (1.43) | | (124) | (0.21) | (0.20) | | (2,038) | (3.40) | (3.32) |
| and amortisation | | | | | | | | | | | |
+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Basic earnings per | 2,238 | 3.74 | 3.62 | | 3,360 | 5.61 | 5.47 | | 5,260 | 8.78 | 8.55 |
| share | | | | | | | | | | | |
+---------------------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| | | | | | | | | | | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
| Weighted average | | 59,899 | 61,878 | | | 59,899 | 61,392 | | | 59,899 | 61,497 |
| number of shares | | | | | | | | | | | |
| (000's) | | | | | | | | | | | |
+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+----------+
The dilutive affect of share options is to increase the number of shares by
1,979,000 (March 2008: 1,598,000) and reduce the basic earnings per share by
0.12p (March 2008: 0.14p; September 2008: 0.23p).
Note 5. Dividends
The proposed interim dividend is 1.0p per share (2008 1.0p). This will be paid
out of the Company's available distributable reserves to shareholders on the
register on 5 June 2009, payable on 6 July 2009. In accordance with IAS 1,
dividends are recorded only when paid and are shown as a movement in equity
rather than as a charge in the income statement.
Note 6. Reconciliation of movements in total equity
+--------------------------+------------------+---------------+-------------+
| | Six months ended | Six months | Year ended |
| | | ended | |
+--------------------------+------------------+---------------+-------------+
| | 31 March | 31 March | 30 |
| | 2009 | 2008 | September |
| | | | 2008 |
+--------------------------+------------------+---------------+-------------+
| | Unaudited | Unaudited | Audited |
+--------------------------+------------------+---------------+-------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------+------------------+---------------+-------------+
| Profit for the period | 2,238 | 3,360 | 5,260 |
+--------------------------+------------------+---------------+-------------+
| Dividends | (1,196) | (719) | (1,317) |
+--------------------------+------------------+---------------+-------------+
| | 1,042 | 2,641 | 3,943 |
+--------------------------+------------------+---------------+-------------+
| Other recognised gains | 1,279 | 20 | 193 |
| and losses for the | | | |
| period | | | |
+--------------------------+------------------+---------------+-------------+
| Movement in share based | 90 | 68 | 136 |
| payments reserve | | | |
+--------------------------+------------------+---------------+-------------+
| Net movement on total | 2,411 | 2,729 | 4,272 |
| equity | | | |
+--------------------------+------------------+---------------+-------------+
| Opening total equity | 14,281 | 10,009 | 10,009 |
+--------------------------+------------------+---------------+-------------+
| Closing total equity | 16,692 | 12,738 | 14,281 |
+--------------------------+------------------+---------------+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFSFMASUSEDI
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