TIDMRNWH
RNS Number : 9050Y
Renew Holdings PLC
18 May 2021
18 May 2021
Renew Holdings plc
("Renew" or the "Group" or the "Company")
Half-year Report
Strong trading continued across H1; positive momentum going into
H2
Renew (AIM: RNWH), the leading Engineering Services Group
supporting the maintenance and renewal of critical UK
infrastructure, announces its interim results for the six months
ended 31 March 2021 ("the period").
Financial Highlights
Six months ended 31 March 2021 HY2021 HY2020 Change
GBPm GBPm
Group revenue(1) GBP366.4m GBP313.6m +17%
---------- ---------- -------
Adjusted operating profit(1) GBP22.0m GBP19.9m +11%
---------- ---------- -------
Operating profit GBP18.5m GBP16.0m +16%
---------- ---------- -------
Adjusted operating margin(1) 6.0% 6.4% -40bps
---------- ---------- -------
Profit before tax GBP18.1m GBP15.2m +19%
---------- ---------- -------
Adjusted earnings per share(1) 22.9p 20.1p +14%
---------- ---------- -------
Interim dividend 4.83p - p
---------- ---------- -------
-- Group order book of GBP750m (HY2020: GBP690m)
-- Net debt (pre-IFRS16) of GBP16.9m (HY2020: GBP16.1m)
-- Strong organic revenue growth of 12 per cent, underpinned
by performance in rail
-- De-risking of balance sheet with completion of Lovell Pension
Scheme buy-in
-- Reinstatement of interim dividend reflects Group's strong
cash generation and positive outlook
Operational Highlights
-- Acquisition of J Browne Group Holdings Limited ("Browne")
for GBP29.5m in March 2021, adding material scale to the
Group's water business in line with strategic objectives
-- Engineering Services adjusted operating profit of GBP22.2m
(HY2020: GBP20.5m)
-- Quantitative sustainability targets in place across five
key areas of the business to embed ESG strategy
Current Trading & Outlook
-- Trading has started strongly in the second half of the
year
-- Confident in our future prospects and well positioned to
capitalise on the increased investment in maintaining and
renewing infrastructure assets
Paul Scott, CEO of Renew, commented:
"We are delighted to be reporting another set of record results
for the Group and I would like to thank my colleagues across the
entire business for their hard work and contributions despite the
ongoing wider challenges presented by the pandemic. We remain fully
committed to the safety of our workforce and those who work with us
as well as the effective delivery of essential UK infrastructure
services that we all rely upon. In the period, we completed the
third substantial acquisition in three years and I was delighted to
welcome the Browne team to the Group, an acquisition which further
strengthens our position in a key attractive infrastructure sector.
After reporting strong organic growth in the first half, trading
has started strongly into the second half of the year and we look
to the future with confidence. We are well positioned to take
advantage of the UK Government's commitment to level up the economy
by investing GBP640bn in an infrastructure-led recovery that will
bring significant opportunities for Renew and our differentiated,
diversified, low-risk business model."
(1) Renew uses a range of statutory performance measures and
alternative performance measures when reviewing the performance of
the Group against its strategy. Definitions of the alternative
performance measures, and a reconciliation to statutory performance
measures, are included in Note 30 of the 2020 Annual Report &
Accounts.
Analyst & Investor Webinar
A virtual meeting for sell-side analysts and investors will be
held at 10:15am today, 18 May 2021, the details of which can be
obtained from FTI Consulting using the contact details below.
For further information, please contact:
Renew Holdings plc www.renewholdings.com
Paul Scott, Chief Executive Officer via FTI Consulting
Sean Wyndham-Quin, Chief Financial 020 3727 1000
Officer
Numis Securities Limited (Nominated
Adviser & Broker)
Stuart Skinner/ Kevin Cruickshank 020 7260 1000
FTI Consulting (Financial PR) 020 3727 1000
Alex Beagley / James Styles / Sam Renew@fticonsulting.com
Macpherson
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
About Renew Holdings plc
Renew Holdings Group plc is a leading UK Engineering Services
business, performing a critical role in keeping the nation's
infrastructure functioning efficiently and safely. The Group
operates through independently branded subsidiaries across its
chosen markets, delivering non-discretionary maintenance and
renewal tasks through its highly skilled, directly employed
workforce.
Renew's activities are focused into two business streams.
Engineering Services, which accounts for over 95 per cent of the
Group's adjusted operating profit, focuses on the key markets of
Rail, Infrastructure, Energy (including Nuclear) and Environmental
which are largely governed by regulation and benefit from
non-discretionary spend with long-term visibility of committed
funding.
Specialist Building focuses on the High Quality Residential and
Science markets in London and the Home Counties.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
Group Chief Executive Officer's Review
On the front foot
The Group delivered a robust trading performance over the first
six months of the financial year, demonstrating the virtues of our
differentiated business model and the attractive, non-discretionary
structural growth drivers within our end markets. Renew is a
leading provider of essential maintenance and renewals-led
engineering services to UK infrastructure networks, operating in
regulated markets including rail, highways, mobile
telecommunications, civil nuclear, water and environmental.
Despite the third national lockdown taking effect on 6 January
2021, the restrictions did not have any material impact on trading
during the period, with the Group experiencing continuity in demand
for its services across all markets. This bears testimony to the
resilience of our business and the essential role we perform in
keeping the nation's infrastructure functioning efficiently and
safely at all times.
I would again like to express my gratitude, on behalf of the
Board, to our colleagues who can be proud of the way they have
continued to deliver the day-to-day renewal and maintenance tasks
for our clients in spite of the challenges that come with enhanced
social distancing practices and personal safety requirements.
We have a proven track record of organic growth supplemented by
acquisitions with attractive end markets, with strong margin and
cash generation characteristics, to deliver excellent shareholder
returns. Our organic revenue growth of 12 per cent during the
period highlights the quality of the underlying businesses within
the Group and the investments made over recent years, such as in
the Rail and Highways sectors, to seize the growth opportunities in
our chosen markets. This pleasing performance was complemented by
the acquisition of Browne in March 2021, a water focused
engineering services business based in London, which strengthens
our exposure to the GBP51bn(2) water sector, adds material scale
and is immediately earnings enhancing.
Thanks to the positive trading performance during the period,
the highly cash generative nature of our business and our
confidence in the Group's prospects, we are pleased to be able to
reinstate the interim dividend.
Our strengths
Renew has a number of core strengths which provide distinct
competitive advantages in our chosen markets and leave us well
placed to build on our strong track record of value creation:
-- We operate a differentiated, diversified, low-risk, low-capital
business model, providing critical asset maintenance and
renewals services that are not dependent on large, capital-intensive
contract awards
-- Our directly employed workforce enables us to provide a
more efficient and valuable service to our clients, reducing
our exposure to sub-contractor pricing volatility and delivering
extremely responsive solutions
-- Our businesses work in markets with high barriers to entry
which demand a highly skilled and experienced workforce
and a proven track record of safe delivery
-- We work in markets underpinned by resilient, long-term
growth dynamics and highly visible committed regulatory
spending periods, providing predictable cashflows
-- We are committed to growing the business both organically
and through selective complementary acquisitions whilst
maintaining a disciplined approach to capital allocation
and risk
-- Our high quality model of compounding earnings through
the redeployment of internally generated cashflows enables
us to execute on our strategy of delivering reliable growth
for all our stakeholders
Market drivers
Our businesses are exposed to attractive long-term,
non-discretionary structural growth drivers. Increasing demand for
the maintenance and renewal of existing UK infrastructure is driven
by a number of factors including:
-- A commitment by the Government to level up the economy
by investing GBP640bn(3) in an infrastructure-led recovery,
with fiscal stimulus measures likely to flow through to
lower cost infrastructure maintenance programmes ahead
of capital-intensive projects;
-- Greater focus on sustainability and climate change, the
UK's net zero carbon emissions target, flood risk and investment
in renewables and electrification programmes;
-- Population growth increasing the pressure on housing, energy,
water and demand for natural resources;
-- Technological innovation driving a shift towards digital
roads, smart cities and the transformation of transport
and telecommunications networks; and
-- Increased Government regulation to improve safety, efficiency
and resilience of key infrastructure assets leading to
more demanding maintenance, renewal and upgrading requirements.
Sustainability strategy
A long-term approach to sustainability has always been at the
heart of our business and we are ideally positioned to assist in
the delivery of the UK Government's committed green infrastructure
investment as part of its net zero carbon target by 2050.
As part of efforts to integrate our ESG strategy within our
wider business strategy and to monitor the progress we are making,
we have introduced quantitative targets which will be continuously
measured in the following five key areas:
-- customer value;
-- climate action;
-- operating responsibly;
-- engaging our people; and
-- supporting our local communities.
Renew already holds the London Stock Exchange's Green Economy
Mark, which recognises companies that derive 50 per cent or more of
their total annual revenue from products and services that
contribute to the global "Green Economy". Renew also reports under
the Streamlined Energy and Carbon Reporting ("SECR") regulations
which ensure we continue to support the UK target to deliver net
zero carbon by 2050.
Innovations
We continuously seek to develop and implement innovative working
techniques to improve operational performance for our clients
across all of our sectors. This includes the introduction of
bespoke plant-led technology to deliver cost, time and
environmental improvements for routine maintenance and renewal
activities. An example of this in the period was our deployment of
the MegaVac, a unique Road Rail Vehicle which significantly
improves the capacity and efficiency of drain management operations
on the rail network.
Results
During the period, Group revenue(1) increased to GBP366.4m
(HY2020: GBP313.6m), including organic growth of 12%, with an
adjusted operating profit(1) of GBP22.0m (HY2020: GBP19.9m).
Adjusted operating profit margin(1) was 6.0% (HY2020: 6.4%) and
this is expected to increase during the second half of the year. As
at 31 March 2021, the Group had pre-IFRS16 net debt of GBP16.9m (31
March 2020: GBP16.1m) as a consequence of the GBP29.5m acquisition
of Browne and reflecting the Group's continued focus on cash
generation, tight working capital management and conservative
approach to gearing. The Group's order book at 31 March 2021 was
GBP750m (HY2020: GBP690m), underpinned by long-term framework
positions.
As previously announced during the period, the Trustees of the
Lovell Pension Scheme, in consultation with the Board of Renew,
entered into a "buy-in" agreement with Rothesay Life plc. This
transaction significantly de-risks the Group's balance sheet,
further reduces the Group's pension exposure risks and will improve
its cashflow in the medium term.
Dividend
The Group's robust trading performance, cash position and
positive outlook have given the Board the confidence to declare an
interim dividend of 4.83p (HY2020: nil; HY2019: 3.83p) per share.
This represents a 26 per cent increase on the last interim dividend
paid. This will be paid on 15 July 2021 to shareholders on the
register as at 18 June 2021, with an ex-dividend date of 17 June
2021.
Engineering Services
Our Engineering Services activities account for over 95 per cent
of the Group's adjusted operating profit and delivered revenue of
GBP327.5m (HY2020: GBP293.1m) with an adjusted operating profit of
GBP22.2m (HY2020: GBP20.5m) resulting in an operating margin of
6.8% (HY2020: 7.0%). At 31 March 2021, the Engineering Services
order book was GBP665m (31 March 2020: GBP591m). The Group's strong
organic growth performance was driven by continued positive
momentum in our rail business, along with framework wins and
operational progress across our diverse Engineering Services
business.
Rail
Network Rail, a significant strategic customer for the Group,
has committed an extra GBP10bn of funding specifically for
maintenance and renewals as part of the current control period
(CP6), which runs to 2024, during which time it will invest a total
of GBP53bn(4) . This increased focus on operational support,
renewal and maintenance plays to our strengths as does the
Government's commitment to its rail decarbonisation programme,
including a significant investment in electrification programmes,
as part of the overall UK target to deliver net zero by 2050.
During the period, we secured new positions on the five-year
Southern Buildings and Civils Framework and the five-year
Structures Integrity Framework in the South which continues to grow
our position with Network Rail.
As a major provider of multidisciplinary maintenance and
renewals engineering services to Network Rail, we support the
day-to-day operation of the rail network nationally, directly
delivering essential asset maintenance through our long-term CP6
frameworks as well as providing 24/7 emergency response across the
network. The Group now holds in excess of fifty CP6 maintenance and
renewals frameworks across all disciplines, covering the entire UK
rail network.
We continue to develop industry leading innovations in order to
deliver value-add services within our Rail business. These include
bespoke solutions built around the needs of our clients, including
'one of a kind' equipment deployed across geotechnical &
earthworks, tunnels, de-vegetation and drainage.
The compelling maintenance-focused structural growth drivers
within this sector, combined with Renew's high quality engineering
expertise, leaves the Group ideally positioned to deliver
long-term, profitable growth in Rail.
Infrastructure
Highways
The Group continued to make good operational and strategic
progress within the Highways segment in the first half, delivering
essential asset maintenance and critical infrastructure renewals
underpinned by non-discretionary regulatory requirements.
With the UK Government committing to an investment of
GBP27.4bn(5) in the strategic road network over a five-year period,
as part of its second Road Investment Strategy ("RIS2"), GBP11.9bn
of this funding will be ringfenced for operations, maintenance and
renewals. This represents a significant market opportunity for
Renew. Having acquired Carnell, a leading provider of specialist
engineering services on the strategic road network, in January
2020, the business continues to leverage its innovative
technological solutions to support the needs of major clients such
as Highways England, for which it is one of only three suppliers
working across all asset delivery areas.
During the period, Carnell continued to perform in line with our
expectations and remains well placed to seize the attractive growth
and market share opportunities within Highways.
Wireless Telecoms
The wireless telecoms sector contains many attractive growth
drivers, from the UK Government's GBP5bn(3) investment in gigabit
broadband and the accelerated roll-out of 5G connectivity through
to the expansion of the Shared Rural Network, the Government's
GBP500m(6) programme to extend 4G mobile coverage to 95 per cent of
the UK. Our long-term relationships with the main UK network
operators, managed service providers and equipment vendors offers
exposure to all of these opportunities.
During the period, we built on the operational and strategic
progress made previously, consolidating our position on
Telefonica's and MBNL's 5G services frameworks. We also saw further
progress in our work for the Government, alongside EE and BT, to
remove Huawei equipment from the UK's 5G networks by 2027. We were
also appointed to a new framework supporting the 5G rollout
programme for Cornerstone on behalf of Telefonica and Vodafone.
With faster mobile internet connectivity becoming ever more
critical in the digital age and a key part of the Government's
levelling up agenda, we expect to benefit from these trends thanks
to our specialist engineering expertise and mission-critical
solutions.
Energy
Nuclear
The Government's total nuclear decommissioning provision is
estimated at GBP124bn(7) over the next 120 years, with around 75
per cent of the total spend allocated to Sellafield which is the
largest of the Nuclear Decommissioning Authority's sites and where
we remain a principal Mechanical, Electrical and Instrumentation
("ME&I") services contractor.
Encouragingly, the mobilisation of work programmes and
decommissioning at Sellafield continued to gain momentum during the
period after the majority of operations at the site were suspended
at the start of the Covid-19 lockdown in March 2020. We expect the
site to be fully operational again in the second half of the
financial year.
Having worked for over 75 years in civil nuclear, we deliver a
multidisciplinary service through our large complement of highly
skilled employees who operate to demanding nuclear standards.
Outside of Sellafield, we are fully operational at Springfields and
continue to develop our relationship with Hinkley Point "C".
Thermal Power, Renewables and Networks
Our essential engineering maintenance services continued at a
number of the UK's thermal power stations at near normal levels.
During the period we secured an extension to the SSE Hydro Tunnels
Framework. We remain operational on the Minor Works Framework with
National Grid as well as on the Minor Civils Framework with Western
Power Distribution.
Environmental
Water
The acquisition of Browne broadens our exposure to the UK water
sector, an attractive market with GBP51bn(2) committed by Ofwat to
deliver service improvements as part of the current five-year
investment period (AMP7) which runs to 2025. By adding material
scale to Renew's water business and bringing new water clients into
the Group, including Thames Water, Southern Water, Affinity Water
and South East Water, the acquisition means we are now even more
strongly positioned to capitalise on the long-term growth
opportunities in this market, underpinned by committed regulatory
spend.
As part of AMP7, additional investment is allocated to deliver
supply resilience including dam safety and infrastructure
refurbishment schemes. These long-term renewal programmes require
sustained investment through our clients' operational expenditure
budgets, benefiting Renew. In the period other water customers
included D r Cymru Welsh Water, Wessex Water, Yorkshire Water and
Bristol Water.
We see an attractive opportunity to drive margin-accretive
revenue growth in this sector with our enhanced capabilities
following the acquisition of Browne.
Land Remediation and Specialist Restoration
In Land Remediation, we have seen continuous demand for our
specialist environmental services during the period. Similarly,
works at the Palace of Westminster continue to be carried out at
normal capacity and we have also commenced new works as part of a
five-year conservation framework at this UNESCO World Heritage
Site.
Specialist Building
Our Specialist Building business focuses on the High Quality
Residential and Science markets in London and the Home
Counties.
Revenue was GBP38.9m (HY2020: GBP20.5m) with operating profit of
GBP0.8m (HY2020: GBP0.4m) delivering a margin of 2.1% (HY2020:
2.0%). The Specialist Building order book was GBP85.0m (HY2020:
GBP99.0m). Work continues uninterrupted across all of our schemes
including those for Defra and the MRC London Institute of Medical
Science.
Health and safety
We continue to make health and safety a priority, ensuring safe
working practices for the Group's employees and those who work with
us.
Track record of value creation
Renew has a strong track record of sustainable value creation
across the economic cycle thanks to our high-quality,
value-accretive compound earnings model. Over the past five years,
we have delivered:
-- adjusted earnings per share growth of 72 per cent;
-- an increase in our adjusted operating margin from 4.0 per
cent to 6.0 per cent; and
-- revenue growth of 38 per cent.
Our track record of reliable revenue growth and cash generation
has resulted in our ability to deliver highly predictable organic
earnings growth and funding for the acquisition of complementary
businesses that meet our strategic requirements.
Outlook - The growth opportunity ahead
In the context of a challenging macro-economic backdrop, we have
delivered a robust set of results that demonstrate Renew's core
resilience, our differentiated, low-risk, capital-light business
model and the attractive growth opportunities which exist in our
chosen markets, driven by long-term programmes of investment,
providing visibility of spend over regulatory cycles.
We remain focused on leveraging the Group's strengths to build
on our track record of good organic growth and selected M&A
activity in related end markets with strong prospects, twinned with
high cash generation and shareholder returns.
The acquisition of Browne further increases our exposure to a
water market with an attractive long-term growth profile and highly
visible cashflows. We will continue to seek opportunities in
markets with similar characteristics of non-discretionary regulated
investment, ongoing renewal and maintenance requirements and high
barriers to entry, adopting a disciplined approach to capital
allocation that is additive to our focus on delivering profitable
organic growth.
Trading has started strongly in the second half of the year
underpinned by a record order book and we are well positioned to
take advantage of the compelling infrastructure-led growth
opportunities that will play a key role in the UK's economic
recovery.
Paul Scott
Chief Executive Officer
18 May 2021
References
1 Renew uses a range of statutory performance measures
and alternative performance measures when reviewing
the performance of the Group against its strategy.
Definitions of the alternative performance measures,
and a reconciliation to statutory performance measures,
are included in Note 30 of the 2020 Annual Report
and Accounts.
2 Ofwat PR19 final determinations December 2019
3 HM Treasury Budget 2020 12 March 2020
4 Network Rail Delivery Plan Control Period 6 High
Level Summary 26 March 2020
5 Department for Transport Road Investment Strategy
2: 2020-2025 March 2020
6 UK Government press release "GBP1bn deal to end poor
rural mobile coverage agreed" 9 March 2020
7 UK Government Nuclear Provision: the cost of cleaning
up Britain's historic nuclear sites 4 July 2019
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 March
2021
Exceptional
items Exceptional
Before and Before items
exceptional amortisation exceptional and
items of items amortisation
and intangible and of
amortisation assets amortisation intangible Year
of (see Six months of assets ended
intangible Note ended intangible (see Note 30
assets 3) 31 March assets 3) September
2021 2021 2021 2020* 2020 2020 2020
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: Group
including
share of joint
venture 2 366,411 - 366,411 313,566 620,375 - 620,375
Less share of -
joint
venture's
revenue - - - - - -
------------- ------------- ----------- ----------- ------------- -------------- ----------
Group revenue
from
continuing
activities 2 366,411 - 366,411 313,566 620,375 - 620,375
Cost of sales (316,127) - (316,127) (268,924) (527,274) - (527,274)
------------- ------------- ----------- ----------- ------------- -------------- ----------
Gross profit 50,284 - 50,284 44,642 93,101 - 93,101
Administrative
expenses (28,284) (3,479) (31,763) (28,609) (53,453) (6,741) (60,194)
Share of
post-tax
result of
joint
venture - - - - (39) - (39)
------------- ------------- ----------- ----------- ------------- -------------- ----------
Operating
profit 2 22,000 (3,479) 18,521 16,033 39,609 (6,741) 32,868
Finance income 13 - 13 1 44 - 44
Finance costs (478) - (478) (863) (1,343) - (1,343)
Other finance
income
- defined
benefit
pension
schemes - - - - 532 - 532
------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit before
income
tax 2 21,535 (3,479) 18,056 15,171 38,842 (6,741) 32,101
Income tax
expense 5 (3,567) 538 (3,029) (3,251) (6,905) 1,146 (5,759)
------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit for the
period
from
continuing
activities 17,968 (2,941) 15,027 11,920 31,937 (5,595) 26,342
------------- ------------- ------------- --------------
Loss for the
period
from
discontinued
operations 4 - - (5,590)
----------- ----------- ----------
Profit for the
period
attributable
to
equity holders
of
the parent
company 15,027 11,920 20,752
----------- ----------- ----------
Basic earnings
per
share 6 22.86p (3.74p) 19.12p 15.60p 41.22p (14.44p) 26.78p
Diluted
earnings
per share 6 22.70p (3.72p) 18.98p 15.48p 40.89p (14.32p) 26.57p
------------- ------------- ----------- ----------- ------------- -------------- ----------
Proposed
dividend 7 4.83p 0.00p 8.33p
----------- ----------- ----------
*Operating profit for the six months ended 31 March 2020 is
stated after charging GBP2,148,000 of amortisation cost and
GBP1,762,000 acquisition cost (see Note 3).
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March 2021
Six months ended Year ended
31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period attributable
to equity holders of the parent company 15,027 11,920 20,752
------------- ------------- ---------------
Items that will not be reclassified
to profit or loss:
Movement in actuarial valuation of
the defined benefit pension schemes (27,337) - (2,775)
Movement on deferred tax relating
to the defined benefit pension schemes 9,568 - 971
------------- ------------- ---------------
Total items that will not be reclassified
to profit or loss (17,769) - (1,804)
------------- ------------- ---------------
Items that are or may be reclassified
subsequently to profit or loss:
Exchange movement in reserves (30) (5) (23)
Total items that are or may be reclassified
subsequently to profit or loss (30) (5) (23)
------------- ------------- -----------
Total comprehensive income for the
period attributable to equity holders
of the parent company (2,772) 11,915 18,925
------------- ------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2021
Share Capital Cumulative Share Total
based
Share premium redemption translation payments Retained equity
capital account reserve adjustment reserve earnings Unaudited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2019 7,533 51,904 3,896 1,339 576 27,010 92,258
Transfer from income
statement for the period 11,920 11,920
Dividends paid (5,770) (5,770)
New shares issued 322 15,024 15,346
Recognition of share
based payments (4) (4)
Exchange differences (5) (5)
-------- -------- ----------- ------------ --------- ----------- -----------
At 31 March 2020 7,855 66,928 3,896 1,334 572 33,160 113,745
Transfer from income
statement for the period 8,832 8,832
Share premium cost
reclassification 1 (550) (549)
Dividends paid (8) (8)
Recognition of share
based payments 249 249
Exchange differences (18) (18)
Actuarial movement recognised
in the pension schemes (2,775) (2,775)
Movement on deferred
tax relating to the pension
schemes 971 971
-------- -------- ----------- ------------ --------- ----------- -----------
At 30 September 2020 7,856 66,378 3,896 1,316 821 40,180 120,447
Transfer from income
statement for the period 15,027 15,027
Dividends paid (6,554) (6,554)
New shares issued 12 647 659
Recognition of share
based payments (30) (30)
Exchange differences (30) (30)
Actuarial movement recognised
in the pension schemes (27,337) (27,337)
Movement on deferred
tax relating to the pension
schemes 9,568 9,568
-------- -------- ----------- ------------ --------- ----------- -----------
At 31 March 2021 7,868 67,025 3,896 1,286 791 30,884 111,750
-------- -------- ----------- ------------ --------- ----------- -----------
CONDENSED CONSOLIDATED BALANCE SHEET
at 31 March 2021
31 March 31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets -
goodwill 139,479 125,092 124,691
- other 34,394 26,442 23,062
Property, plant and
equipment 15,324 22,242 14,806
Right of use assets 17,940 10,157 17,481
Investment in joint
ventures 586 39 -
Retirement benefit
assets* 974 27,936 28,059
Deferred tax assets 2,233 1,462 2,164
----------------------- ---------- -------------
210,930 213,370 210,263
----------------------- ---------- -------------
Current assets
Inventories 1,699 1,675 1,619
Assets held for resale 1,500 1,500 1,500
Trade and other receivables 150,640 110,700 129,838
Current tax assets 911 1,334 2,174
Cash and cash equivalents 1,836 31,430 13,396
156,586 146,639 148,527
----------------------- ---------- -------------
Total assets 367,516 360,009 358,790
----------------------- ---------- -------------
Non-current liabilities
Borrowings - (38,750) (4,373)
Lease liabilities (9,740) (10,320) (9,347)
Deferred tax liabilities (6,925) (14,755) (14,252)
Provisions (441) (452) (441)
----------------------- ---------- -------------
(17,106) (64,277) (28,413)
----------------------- ---------- -------------
Current liabilities
Borrowings (18,750) (8,750) (8,752)
Trade and other payables (210,728) (167,512) (192,370)
Lease liabilities (6,421) (5,714) (6,047)
Provisions (2,761) (11) (2,761)
(238,660) (181,987) (209,930)
----------------------- ---------- -------------
Total liabilities (255,766) (246,264) (238,343)
----------------------- ---------- -------------
Net assets 111,750 113,745 120,447
----------------------- ---------- -------------
Share capital 7,868 7,855 7,856
Share premium account 67,025 66,928 66,378
Capital redemption
reserve 3,896 3,896 3,896
Cumulative translation
adjustment 1,286 1,334 1,316
Share based payments
reserve 791 572 821
Retained earnings 30,884 33,160 40,180
----------------------- ---------- -------------
Total equity 111,750 113,745 120,447
----------------------- ---------- -------------
*See Note 8 for details of the Lovell Pension Scheme
buy-in.
CONDENSED CONSOLIDATED CASHFLOW STATEMENT
for the six months ended 31 March 2021
Six months ended Year ended
31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period from continuing
operating activities 15,027 11,920 26,342
Share of post-tax trading result of
joint venture - - 39
Amortisation of intangible assets 2,810 2,148 5,529
Depreciation 4,799 4,749 9,672
Profit on sale of property, plant and
equipment (80) (308) (483)
(Increase)/decrease in inventories (45) 245 301
(increase)/decrease in receivables (8,560) 20,647 1,465
Increase/(decrease) in payables 9,565 (5,005) 17,080
Current and past service cost in respect
of defined benefit pension scheme 25 25 69
Cash contribution to defined benefit
pension schemes (252) (2,382) (4,817)
(Credit)/charge in respect of share
options (30) (4) 245
Finance income (13) (1) (44)
Finance expense 478 863 811
Interest paid (478) (863) (1,343)
Income taxes paid (2,862) (5,372) (8,179)
Income tax expense 3,029 3,251 5,759
Net cash inflow from continuing operating
activities 23,413 29,913 52,446
Net cash outflow from discontinued operating
activities (1,111) (213) (592)
----------- ---------- -------------
Net cash inflow from operating activities 22,302 29,700 51,854
----------- ---------- -------------
Investing activities
Interest received 13 1 44
Dividend received from joint venture - 100 100
Proceeds on disposal of property, plant
and equipment 483 376 725
Purchases of property, plant and equipment (1,327) (1,710) (3,756)
Acquisition of subsidiaries net of cash
acquired (29,206) (40,512) (40,512)
----------- ---------- -------------
Net cash outflow from investing activities (30,037) (41,745) (43,399)
Financing activities
Dividends paid (6,554) (5,770) (5,778)
Issue of Ordinary Shares 659 15,346 14,797
New loan 10,000 49,000 -
Loan repayments (4,375) (23,375) (8,750)
Repayment of obligations under finance
leases (3,528) (3,394) (6,972)
----------- ---------- -------------
Net cash (outflow)/inflow from financing
activities (3,798) 31,807 (6,703)
Net (decrease)/increase in continuing
cash and cash equivalents (10,422) 19,975 2,344
Net decrease in discontinued cash and
cash equivalents (1,111) (213) (592)
----------- ---------- -------------
Net (decrease)/increase in cash and
cash equivalents (11,533) 19,762 1,752
Cash and cash equivalents at the beginning
of the period 13,396 11,667 11,667
Effect of foreign exchange rate changes
on cash and cash equivalents (27) 1 (23)
Cash and cash equivalents at the end
of the period 1,836 31,430 13,396
----------- ---------- -------------
Bank balances and cash 1,836 31,430 13,396
----------- ---------- -------------
NOTES TO THE CONDENSED CONSOLIDATED ACCOUNTS
1 Basis of preparation
(a) The condensed consolidated interim financial report for the
six months ended 31 March 2021
and the equivalent period in 2020 has not been audited or
reviewed by the Group's auditor.
It does not comprise statutory accounts within the meaning of
Section 435 of the Companies Act 2006. It has been prepared under
the historical cost convention and on a going concern basis in
accordance with applicable law and international accounting
standards in conformity with the requirements of the Companies Act
2006 ("Adopted IFRSs"). The report does not comply with IAS 34
"Interim Financial Reporting" which is not currently required to be
applied for AIM companies and it was approved by the Directors on
18 May 2021.
(b) The accounts for the year ended 30 September 2020 were
prepared under IFRS and have been delivered to the Registrar of
Companies. The report of the auditor on those accounts was
unqualified, did not contain an emphasis of matter paragraph and
did not contain any statement under Section 498(2) or (3) of the
Companies Act 2006. In this report, the comparative figures for the
year ended 30 September 2020 have been audited. The comparative
figures for the period ended 31 March 2020 are unaudited.
(c) The accounting policies applied in preparing the condensed
consolidated interim financial information are the same as those
applied in the preparation of the annual financial statements for
the year ended 30 September 2020 as described in those financial
statements.
(d) The principal risks and uncertainties affecting the Group
are unchanged from those set out in the Group's Accounts for the
year ended 30 September 2020. The Directors have reviewed financial
forecasts and are satisfied that the Group has adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, the Group continues to adopt the going concern basis
in preparing the condensed consolidated interim financial
report.
This condensed consolidated interim financial report is being
sent to all shareholders and is also available upon request from
the Company Secretary, Renew Holdings plc, 3175 Century Way, Thorpe
Park, Leeds, LS15 8ZB, or via the website www.renewholdings.com
.
2 Segmental analysis
Operating segments have been identified based on the internal
reporting information provided to the Group's Chief Operating
Decision Maker. From such information, Engineering Services and
Specialist Building have been determined to represent operating
segments.
Group revenue from
continuing activities
Six months ended
31 March
Group Group
including Less including Less Group revenue
share share share share from continuing
of joint of joint of joint of joint activities
venture venture venture venture Year ended
30 September
2021 2021 2021 2020 2020 2020 2020
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
revenue
Engineering
Services 327,514 - 327,514 293,093 577,238 - 577,238
Specialist
Building 38,897 - 38,897 20,473 43,207 - 43,207
Inter segment
revenue (1,047) - (1,047) (965) (2,025) - (2,025)
----------- ----------- ------------ ----------- ----------- ---------- -----------------
Segment revenue 365,364 - 365,364 312,601 618,420 - 618,420
Central activities 1,047 - 1,047 965 1,955 - 1,955
----------- ----------- ------------ ----------- ----------- ---------- -----------------
Group revenue from
continuing
operations 366,411 - 366,411 313,566 620,375 - 620,375
----------- ----------- ------------ ----------- ----------- ---------- -----------------
Six months ended
31 March
Before
exceptional Exceptional Before Exceptional
items items exceptional items
and and items and and
amortisation amortisation amortisation amortisation
of of of of
intangible intangible intangible intangible Year ended
assets assets assets assets 30 September
2021 2021 2021 2020* 2020 2020 2020
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
operating
profit
Engineering
Services 22,218 (3,479) 18,739 16,632 40,754 (6,741) 34,013
Specialist
Building 786 - 786 415 1,014 - 1,014
------------- ------------- ----------- ----------- ------------- ------------- -------------
Segment
operating
profit 23,004 (3,479) 19,525 17,047 41,768 (6,741) 35,027
Central
activities (1,004) - (1,004) (1,014) (2,159) - (2,159)
------------- ------------- ----------- ----------- ------------- ------------- -------------
Operating profit 22,000 (3,479) 18,521 16,033 39,609 (6,741) 32,868
Net financing
expense (465) - (465) (862) (767) - (767)
------------- ------------- ----------- ----------- ------------- ------------- -------------
Profit before
income
tax 21,535 (3,479) 18,056 15,171 38,842 (6,741) 32,101
------------- ------------- ----------- ----------- ------------- ------------- -------------
* Operating profit for the six months ended 31 March 2020 is
stated after charging GBP2,148,000 of amortisation cost and
GBP1,762,000 acquisition cost (see Note 3).
3 Exceptional items and amortisation of intangible assets
Six months ended Year ended
31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Acquisition cost 669 1,762 1,212
Total charges arising from exceptional items 669 1,762 1,212
Amortisation of intangible assets 2,810 2,148 5,529
---------- ---------- --------------------------
Total exceptional items and amortisation charge before income
tax 3,479 3,910 6,741
Taxation credit on exceptional items and amortisation (538) (504) (1,146)
---------- ---------- --------------------------
Total exceptional items and amortisation charge 2,941 3,406 5,595
---------- ---------- --------------------------
4 Loss for the period from discontinued operations
Six months ended Year ended
31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Revenue - - -
Expenses - - (5,590)
------------ ------------ -------------
Loss before income tax - - (5,590)
Income tax charge - - -
----------- ----------- -------------
Loss for the period from discontinued
operations - - (5,590)
------------ ------------ -------------
5 Income tax expense
Six months ended Year ended
31 March 30 September
2021 2020 2020
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Current tax:
UK corporation tax on profit
for the period (4,075) (2,774) (5,732)
Adjustments in respect of previous
periods 531 - 216
---------- ---------- -------------
Total current tax (3,544) (2,774) (5,516)
Deferred tax 515 (477) (243)
---------- ---------- -------------
Income tax expense (3,029) (3,251) (5,759)
---------- ---------- -------------
6 Earnings per share
Six months ended 31 March Year ended 30 September
2021 2020 2020
Unaudited Unaudited Audited
Earnings EPS DEPS Earnings EPS DEPS Earnings EPS DEPS
GBP000 Pence Pence GBP000 Pence Pence GBP000 Pence Pence
Earnings
before
exceptional
items and
amortisation 17,968 22.86 22.70 15,326 20.06 19.90 31,937 41.22 40.89
Exceptional
items and
amortisation (2,941) (3.74) (3.72) (3,406) (4.46) (4.42) (5,595) (7.22) (7.17)
---------- ---------- ------- ---------- ------------ --------- ---- ----------- -------------------- ---------
Basic
earnings
per share
- continuing
activities 15,027 19.12 18.98 11,920 15.60 15.48 26,342 34.00 33.72
Loss for
the period
from
discontinued
activities - - - - - - (5,590) (7.22) (7.15)
---------- ---------- ------- ---------- ------------ --------- ---- ----------- -------------------- ---------
Basic
earnings
per share 15,027 19.12 18.98 11,920 15.60 15.48 20,752 26.78 26.57
---------- ---------- ------- ---------- ------------ --------- ---- ----------- -------------------- ---------
Weighted
average
number
of shares 78,587 79,166 76,405 77,016 77,480 78,114
---------- ------- ------------ --------- -------------------- ---------
The dilutive effect of share options is to increase the number
of shares by 579,000 (March 2020: 611,000; September 2020: 634,000)
and reduce the basic earnings per share by 0.14p (March 2020:
0.12p; September 2020: 0.21p).
7 Dividends
The proposed interim dividend is 4.83p (2020: 0.00p) per share.
This will be paid out of the Company's available distributable
reserves to shareholders on the register on 18 June 2021, payable
on 15 July 2021. The ex-dividend date will be 17 June 2021. In
accordance with IAS 1 "Presentation of Financial Statements",
dividends are recorded only when paid and are shown as a movement
in equity rather than as a charge in the Income statement.
8 Lovell Pension Scheme buy-in
Renew Holdings plc's statutory accounts for the year ended 30
September 2020 noted that the following transaction took place as a
post balance sheet event. On 26 November 2020, the Trustees of the
Lovell Scheme, in consultation with the Directors, used scheme
assets to purchase annuities which match certain pension
liabilities in a transaction known as a "buy-in" where the annuity
policy remains an asset of the scheme. Following the conclusion of
this buy-in, all the scheme liabilities are now matched with the
annuities which has removed the scheme's investment and funding
risks. Consequently, there has been a reduction in the IAS 19
Retirement benefit assets in the Group's accounts for the 6 months
ended 31 March 2021. The effect has been to reduce the Retirement
benefit asset by GBP27,337,000, reverse the associated Deferred tax
liability of GBP9,568,000 resulting in a GBP17,769,000 reduction in
the Group's Retained earnings.
9 Acquisition of subsidiary undertaking - J Browne Group Holdings Ltd
On 26 March 2021, the Company acquired the whole of the issued
share capital of J Browne Group Holdings Ltd ("J Browne") for a
cash consideration of GBP29.5m plus a net cash adjustment of
GBP12.0m. The GBP12.0m represents J Browne's surplus cash held in
an escrow account at completion which was subsequently paid to the
vendor. The net acquisition cost was funded by a combination of
cash and the Group's existing revolving credit facility provided by
HSBC UK Bank plc and National Westminster Bank plc.
The provisional value of the assets and liabilities of J Browne
at the date of acquisition were:
Book value Adjustments Fair value
GBP000 GBP000 GBP000
Non-current assets
Intangible assets
-goodwill 2,673 12,115 14,788
-other - 14,142 14,142
Property, plant and
equipment 629 - 629
Right of use assets - 317 317
Investment in joint
ventures 586 - 586
3,888 26,574 30,462
----------- ------------ -----------
Current assets
Inventories 35 - 35
Trade and other receivables 12,266 - 12,266
Cash and cash equivalents 12,293 - 12,293
24,594 - 24,594
----------- ------------ -----------
Total assets 28,482 26,574 55,056
----------- ------------ -----------
Non-current liabilities
Obligations under
finance leases - (244) (244)
Deferred tax liabilities - (2,687) (2,687)
- (2,931) (2,931)
----------- ------------ -----------
Current liabilities
Trade and other payables (9,899) - (9,899)
Obligations under
finance leases (72) (73) (145)
Current tax liability (581) - (581)
(10,552) (73) (10,625)
----------- ------------ -----------
Total liabilities (10,552) (3,004) (13,556)
----------- ------------ -----------
Net assets 17,930 23,570 41,500
----------- ------------ -----------
Goodwill of GBP14,788,000 arises on acquisition and is
attributable to the expertise and workforce of the acquired
business. Other intangible assets, provisionally valued at
GBP14,142,000, which represent customer relationships and
contractual rights, were also acquired and will be amortised over
their useful economic lives in accordance with IFRS 3. Deferred tax
has been provided on this amount. Amortisation of this intangible
asset will commence from April 2021.
Right of use assets and obligations under finance leases
J Browne's statutory accounts are prepared under FRS 102. The
group has made an adjustment for operating leases obtained on
acquisition whereby the leases are capitalised based on discounted
future lease payments together with an equivalent leasing liability
to be consistent with Group reporting under IFRS 16.
Fair value adjustments arising from the acquisition
In accordance with IFRS 3, the Board will review the fair value
of assets and liabilities using information available up to 12
months after the date of acquisition. Fair value has been
calculated using Level 3 inputs as defined by IFRS 13.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FLFFREDIDLIL
(END) Dow Jones Newswires
May 18, 2021 02:00 ET (06:00 GMT)
Renew (LSE:RNWH)
Graphique Historique de l'Action
De Sept 2024 à Oct 2024
Renew (LSE:RNWH)
Graphique Historique de l'Action
De Oct 2023 à Oct 2024