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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Renew Holdings Plc | LSE:RNWH | London | Ordinary Share | GB0005359004 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -5.00 | -0.53% | 935.00 | 933.00 | 936.00 | 947.00 | 935.00 | 937.00 | 117,543 | 12:03:37 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gen Contractor-oth Residentl | 921.55M | 43.38M | 0.5482 | 17.09 | 741.48M |
From Apr 2019 to Apr 2024
TIDMRNWH
RNS Number : 7907O
Renew Holdings PLC
22 May 2018
Renew Holdings plc
("Renew" or the "Group")
Interim results
Renew (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces their interim results for the six months ended 31 March 2018 which are in line with management expectations.
Financial Highlights:
Hot Features
Premium
H1 2018 H1 2017
------------------------------ ---------- ----------
Revenue GBP262.2m GBP281.8m
------------------------------ ---------- ----------
Adjusted operating profit* GBP12.9m GBP12.9m
------------------------------ ---------- ----------
Adjusted operating margin* 4.9% 4.6%
------------------------------ ---------- ----------
Adjusted earnings per share* 16.2p 16.5p
------------------------------ ---------- ----------
Interim dividend per share 3.33p 3.00p
------------------------------ ---------- ----------
* Adjusted results are shown prior to impairment, amortisation and exceptional items.
-- Engineering Services revenue was GBP221.8m (2017: GBP226.6m) -- Engineering Services adjusted operating profit* of GBP12.9m (2017: GBP12.7m) -- 9% increase in Engineering Services order book to GBP472m (2017: GBP435m) -- Exited the gas infrastructure market with the sale of Forefront
Post period end Highlights:
-- Materially earnings enhancing acquisition of QTS for a cash consideration of GBP80m
-- Funded by a successful equity placing of GBP45m and GBP35m debt facility
-- Complementary transaction which fits with Renew's established and proven strategy
David Forbes, Chairman of Renew Holdings, said: "This period has seen Renew deliver another set of interim results in line with management expectations. The Group's strategy remains to develop its engineering services business both organically and through selective acquisitions which was demonstrated by the post period end acquisition of QTS, positioning the Group to continue to generate shareholder value."
Enquiries:
Renew Holdings plc www.renewholdings.com
Contact via Walbrook PR
Paul Scott, Chief Executive
Sean Wyndham-Quin, Group Finance
Director
Numis Securities Limited Tel: 020 7260 1000
Stuart Skinner/ Kevin Cruickshank (Nominated
Adviser)
Michael Burke (Corporate Broker)
Walbrook PR Tel: 020 7933 8780 or renew@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
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
Engineering Services, which accounts for over 80% of Group revenue and 90% of operating profit, focuses on the key markets of Energy (including Nuclear), Environmental and Infrastructure, 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 market in London and the Home Counties.
For more information please visit the Renew Holdings plc website: www.renewholdings.com
Chairman's Statement
I am pleased to announce that Renew has delivered another set of interim results in line with management expectations. The Group focuses on directly delivering essential works to critical infrastructure in regulated markets where works are funded through clients' operational expenditure budgets.
Results
Group adjusted(1) operating profit was GBP12.9m (2017: GBP12.9m) on revenue, including GBP0.9m (2017: GBP1.1m) from a joint venture, of GBP262.2m (2017: GBP281.8m). The Group's adjusted(1) operating margin, increased to 4.9% (2017: 4.6%). Adjusted(1) earnings per share was 16.2p (2017: 16.5p). Statutory profit before income tax was GBP2.0m (2017: GBP5.6m).
Engineering Services revenue was GBP221.8m (2017: GBP226.6m) with adjusted(1) operating profit increasing to GBP12.9m (2017: GBP12.7m) resulting in an improved operating margin of 5.8% (2017: 5.6%).
As announced in November 2017, Specialist Building revenue reduced to GBP40.5m (2017: GBP53.5m). Operating profit was GBP0.9m (2017: GBP1.2m), maintaining operating margin at 2.2% (2017: 2.2%). The Group remains focused on contract selectivity and risk management within the High Quality Residential market in London and the Home Counties.
Corporate activity
Since the period end, we were pleased to announce the GBP80m acquisition of QTS Group Limited ("QTS"), a direct delivery provider of specialist engineering services to the rail industry. These services include asset support, maintenance and renewals undertaken primarily through Network Rail's non-discretionary operational expenditure budget. QTS is a well-established brand in the UK Rail market where it has operated for over 25 years. The combined capabilities broaden the service offering of the enlarged Group and enable us to maximise the opportunities under Control Period 6 ("CP6") (2019-2024) where the increase in spending to GBP48bn will focus on operations, maintenance, support and renewals across the rail network.
The acquisition was part funded by a successful equity placing to raise gross proceeds of GBP45m, with the balance of the consideration (plus associated transaction costs) funded from new debt facilities, comprising a GBP35m four year term loan, GBP20m revolving capital facility and GBP10m overdraft facility, which together replaced all existing debt facilities.
On 5 February 2018, the Group announced the disposal of Forefront Group Limited ("Forefront"), its engineering services business focused on the gas infrastructure market.
Dividend
In line with its progressive policy, the Board is increasing the interim dividend by 11% to 3.33p (2017: 3.00p) per share which will be paid on 6 July 2018 to shareholders on the register at 1 June 2018.
Order book
The Group's order book at 31 March 2018 was GBP540m (2017: GBP517m). The Engineering Services order book grew 9% to GBP472m (2017: GBP435m). In Specialist Building, the order book was GBP68m (2017: GBP82m).
Cash
At 31 March 2018, the Group had a net debt of GBP2.5m (2017: GBP3.5m).
Board changes
I was delighted to succeed Roy Harrison as Chairman following his retirement at the conclusion of the AGM in January. I would like to thank Roy for the contribution he has made to the Group over the past 14 years. In November, the Group appointed Sean Wyndham-Quin as Group Finance Director.
Outlook
We focus on supporting the country's key infrastructure assets, providing essential engineering services through long-term framework positions. It remains the Group's strategy to develop its engineering services business both organically and through selective acquisitions.
The Board remains confident of delivering full year results in line with market expectations.
D Forbes
Chairman
22 May 2018
Chief Executive's Review
Renew continues to expand its position as a leading provider of engineering support services to the UK's critical infrastructure assets in the Energy, Environmental and Infrastructure markets which have high barriers to entry.
Our work supports the daily operations of essential networks which include nuclear, rail and water infrastructure. Our directly employed, highly skilled teams deliver maintenance and renewals programmes to key infrastructure assets on these networks.
Corporate activity
On 9 May 2018, the Group announced the acquisition of QTS for a cash consideration of GBP80m. QTS is a provider of specialist services to the rail industry which include Civil Engineering, Geotechnical Services, Fencing and Devegetation. QTS is an excellent fit with Renew's established and proven strategy and has a longstanding relationship with Network Rail where they operate under long-term framework positions. This includes the recently awarded 10 regions on the five year Civils and Buildings Asset Management Frameworks. The additional services of QTS will broaden the opportunities available to Renew under CP6 (2019-2024) where Network Rail's significantly increased spending will focus on renewal and maintenance, our Group's key offering.
Headquartered in Drumclog, Scotland, QTS has eight operational bases across the UK. In the financial year ended 31 March 2018, over 90% of QTS' revenue was ultimately derived from Network Rail. The QTS brand will be retained and the business will operate as a standalone subsidiary, with Group oversight and support.
Exceptional items
In February, the Group announced its decision to exit the gas infrastructure market with the sale of subsidiary, Forefront. The sale allows management to focus on other opportunities that can deliver better value for shareholders. As a result of the disposal, the consolidated results of the Group will show a non-cash, balance sheet write-down of assets and intangible assets of approximately GBP9.9m which are shown as exceptional items in the Group's accounts. Renew bears no ongoing liability in respect of Forefront.
Engineering Services
Engineering Services revenue was in line with management expectations at GBP221.8m (2017: GBP226.6m). Adjusted (1) operating profit grew to GBP12.9m (2017: GBP12.7m). The adjusted(1) operating margin increased to 5.8% (2017: 5.6%). In line with our strategy to focus on contract selectivity, we delivered improved margins across our Engineering Services sectors.
At 31 March 2018, the Engineering Services order book increased 9% to GBP472m (2017: GBP435m) with expected revenue for the year fully secured.
Energy
Our engineering services support the day-to-day operation and maintenance of assets in the nuclear, thermal, and renewable energy markets.
Operating at 9 of the Nuclear Decommissioning Authority's ("NDA") 17 nuclear licenced sites in the UK, the majority of our work is undertaken at the Sellafield Nuclear site in Cumbria. Sellafield is currently allocated around 74% of the NDA's GBP3bn annual expenditure representing the scale of the decommissioning challenge at the site.
As the largest mechanical and electrical contractor at Sellafield we are positioned across the site supporting both new and existing operational plant. Our work on Sellafield's long-term, high priority programmes includes those associated with waste treatment, reprocessing, decontamination, and decommissioning.
We continue to work on long-term frameworks at Sellafield which include the 10-year Decommissioning Delivery Partnership Framework, Magnox Swarf Storage Silo, Bulk Sludge Retrieval, Site Remediation & Decommissioning, the Bundling Spares Framework and the Tanks and Vessels Framework. Our work on these frameworks also positions the Group strongly for opportunities in the major projects programmes at the site.
During the period we also commenced a new area of work at BAE Systems in Barrow where we are providing engineering support to the Astute Class nuclear submarine programme.
We continue to provide long-term engineering maintenance at five of the UK's thermal power stations and have recently been awarded a number of work packages.
Environmental
We support a wide range of water infrastructure assets including both clean and waste water networks as well as undertaking flood alleviation and coastal protection schemes.
We continue our strong relationship with Wessex Water on the AMP 6 Civils & EMI Delivery Partners Framework and for Welsh Water on the Major Civils Framework and the Capital Delivery Alliance Civils contracts as well as the Pressurised Pipelines Framework which includes the Emergency Reactive framework. During March, our reactive maintenance services supported Welsh Water through major network disruption following a period of severe weather. Our direct resources responded very quickly to an urgent demand for an extensive leakage programme on the potable water network supplying the main conurbations of Wales.
We continue to develop our relationship with the Environment Agency following the award of the five year Flood and Coastal Risk Management Frameworks in the Agency's North, Central and South West Hubs in March. We were the only contractor to secure a position in all three areas. The frameworks will see us deliver a range of small scale civil engineering and maintenance works to protect and improve the environment with the overall Flood and Coastal Risk Management programme set to deliver around GBP160m of works nationally. We continue to operate as sole provider on the Northern Mechanical, Electrical, Instrumentation, Control, and Automation ("MEICA") Framework.
For the Canal and River Trust, we have completed the first year of the MEICA Framework where we provide maintenance, renewal, upgrade, and emergency repairs services to around 1,000 of the Trust's waterway assets in England and Wales. During the period, our work included the installation of a new winding mechanism at Bath Deep Lock on the Kennet and Avon Canal.
In land remediation, we have worked on several frameworks for SGN and National Grid to remediate former gas works sites. New clients include Leeds City Council where we have recently been awarded a contract to remediate three sites in the Holbeck development area.
Restoration activity and work associated with the Palace of Westminster, including work on the Courtyard Conservation Framework and the Cast Iron Roof Restoration Framework is progressing well. Our position at the site provides good visibility of future essential works and we are well placed for the major opportunities that will present themselves at this UNESCO World Heritage site.
Infrastructure
As a major provider of infrastructure services to Network Rail, we undertake a wide range of multi-disciplinary maintenance and renewals activities as well as providing a 24/7 emergency reactive service across the rail network.
The Government's announcement of increased rail funding for CP6 to GBP48bn will see Network Rail increase expenditure in operations, maintenance, support, and renewals by 25% compared to the previous Control Period (2014-2019). The focus on renewals and maintenance as key priorities means the Group is excellently positioned to benefit from this spending plan.
Following Network Rail's recent renewal of the 5-Year Civils and Buildings Asset Management Frameworks we successfully renewed all our existing frameworks as well as adding a number of new positions extending our reach into the South East. These contract awards are testament to the strength of the Group's relationship with Network Rail and our ability to respond at short notice across a range of assets on the national rail network.
In addition to our civils and building asset management works, we remain sole provider on seven Infrastructure Project frameworks over the current CP5 investment period where we deliver renewal schemes on a range of assets including bridges, viaducts, stations, and tunnels.
We continue to see increasing opportunities in the wider rail market through the collaboration of Amco and Giffen. During the period we were awarded significant refurbishment projects at Upminster and Ealing Common Depots for London Underground Limited and the construction of Robroyston Station for the ScotRail Alliance in Scotland. In addition, Amco Giffen has been appointed as a Strategic Partner by SPL Powerlines UK Limited on the Midland Mainline Electrification Programme following their acquisition of the Carillion share in the CPL Joint Venture.
In wireless telecoms, we continue to work for the UK's major cellular network operators and original equipment manufacturers on the 3G and 4G roll out programmes.
Specialist Building
As previously announced, revenue in Specialist Building reduced against the comparative period to GBP40.5m (2017: GBP53.5m), with an operating profit of GBP0.9m (2017: GBP1.2m). Operating profit margin was maintained at 2.2% (2017: 2.2%). The forward order book stood at GBP68m (2017: GBP82m) with expected revenue for the year fully secured.
The Group's Specialist Building operations focus on the High Quality Residential market in London and the Home Counties where we specialise in major structural engineering works.
Strategy
Renew is a leading provider of engineering support services to the UK's critical Energy, Environmental and Infrastructure markets, where ongoing engineering maintenance and renewals requirements provide long-term, sustainable opportunities.
It remains the Group's strategy to grow our Engineering Services business both organically and through selective, earnings enhancing acquisitions with a clear focus on non-discretionary operational expenditure.
Our acquisition of QTS builds on this established strategy and positions the Group well to maximise the opportunities available under CP6 where increased spending will focus on renewals and maintenance.
Paul Scott
Chief Executive
22 May 2018
(1) Adjusted results are shown prior to impairment, amortisation and exceptional items (applies throughout the document whenever the term 'adjusted' is used)
Condensed consolidated income statement
for the six months ended 31 March
2018
Exceptional
items Exceptional
Before and Before items
exceptional amortisation exceptional and
items of items amortisation
and intangible and of
amortisation assets amortisation intangible
of (see Six months of assets
intangible Note ended intangible (see Note Year ended
assets 3) 31 March assets 3) 30 September
2018 2018 2018 2017* 2017 2017 2017
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
(restated**) (restated**) (restated**) (restated**)
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: Group
including
share of joint
venture 2 262,159 - 262,159 281,785 545,932 - 545,932
Less share of
joint
venture's
revenue (853) - (853) (1,130) (2,239) - (2,239)
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Group revenue
from
continuing
activities 2 261,306 - 261,306 280,655 543,693 - 543,693
Cost of sales (230,674) - (230,674) (250,880) (481,065) - (481,065)
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Gross profit 30,632 - 30,632 29,775 62,628 - 62,628
Administrative
expenses (17,827) (10,475) (28,302) (24,086) (35,126) (8,289) (43,415)
Share of
post-tax
result of
joint
venture 65 - 65 81 166 - 166
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Operating
profit 2 12,870 (10,475) 2,395 5,770 27,668 (8,289) 19,379
Finance income 1 - 1 81 30 - 30
Finance costs (385) - (385) (210) (528) - (528)
Other finance
income
- defined
benefit
pension
schemes - - - - 197 - 197
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Profit before
income
tax 2 12,486 (10,475) 2,011 5,641 27,367 (8,289) 19,078
Income tax
expense 5 (2,371) 105 (2,266) (2,231) (4,838) 388 (4,450)
-------------- ------------- ----------- -------------- ------------- -------------- -------------
(Loss)/profit
for
the period
from
continuing
activities 10,115 (10,370) (255) 3,410 22,529 (7,901) 14,628
Loss for the
period
from
discontinued
operations 4 (1,320) - (1,320) (655) (2,201) - (2,201)
-------------- ------------- ----------- -------------- ------------- -------------- -------------
(Loss)/profit
for
the period
attributable
to equity
holders
of the parent
company 8,795 (10,370) (1,575) 2,755 20,328 (7,901) 12,427
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Basic earnings
per
share from
continuing
activities 6 16.16p (16.57p) (0.41p) 5.47p 36.04p (12.64p) 23.40p
Diluted
earnings
per share from
continuing
activities 6 16.06p (16.46p) (0.40p) 5.42p 35.81p (12.56p) 23.25p
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Basic earnings
per
share 6 14.05p (16.57p) (2.52p) 4.42p 32.52p (12.64p) 19.88p
Diluted
earnings
per share 6 13.96p (16.46p) (2.50p) 4.38p 32.31p (12.56p) 19.75p
-------------- ------------- ----------- -------------- ------------- -------------- -------------
Proposed
dividend 7 3.33p 3.00p 9.00p
----------- -------------- -------------
*Operating profit for the six months ended 31 March 2017 is stated after charging GBP6,009,000 of exceptional items and GBP1,140,000 of amortisation cost (see Note 3).
** The prior year comparatives have been restated following the reclassification of a discontinued business (see Note 4).
Condensed consolidated statement of comprehensive income
for the six months ended 31 March 2018
Six months ended Year ended
31 March 30 September
2018 2017 2017
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
(Loss)/profit for the period attributable
to equity holders of the parent company (1,575) 2,755 12,427
-------------- ---------- -------------
Items that will not be reclassified
to profit or loss:
Movement in actuarial valuation of
the defined benefit pension schemes - - (2,089)
Movement on deferred tax relating
to the defined benefit pension schemes - - 806
-------------- ---------- -------------
Total items that will not be reclassified
to profit or loss - - (1,283)
-------------- ---------- -------------
Items that are or may be reclassified
subsequently to profit or loss:
Exchange movement in reserves (66) 84 (42)
Total items that are or may be reclassified
subsequently to profit or loss (66) 84 (42)
-------------- ---------- -------------
Total comprehensive income for the
period attributable to equity holders
of the parent company (1,641) 2,839 11,102
-------------- ---------- -------------
Condensed consolidated statement of changes in equity
for the six months ended 31 March 2018
Called Share Capital Cumulative Share Total
up 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 2016 6,232 8,481 3,896 1,347 571 366 20,893
Transfer from income
statement for the period 2,755 2,755
Dividends paid (3,349) (3,349)
New shares issued 27 1,154 1,181
Recognition of share
based payments 1 1
Exchange differences 84 84
-------- -------- ----------- ------------ --------- --------- ----------
At 31 March 2017 6,259 9,635 3,896 1,431 572 (228) 21,565
Transfer from income
statement for the period 9,672 9,672
Dividends paid (1,877) (1,877)
Recognition of share
based payments 108 108
Exchange differences (126) (126)
Actuarial movement recognised
in the pension schemes (2,089) (2,089)
Movement on deferred
tax relating to the pension
schemes 806 806
-------- -------- ----------- ------------ --------- --------- ----------
At 30 September 2017 6,259 9,635 3,896 1,305 680 6,284 28,059
Transfer from income
statement for the period (1,575) (1,575)
Dividends paid (3,755) (3,755)
Recognition of share
based payments (114) (114)
Exchange differences (66) (66)
-------- -------- ----------- ------------ --------- --------- ----------
At 31 March 2018 6,259 9,635 3,896 1,239 566 954 22,549
-------- -------- ----------- ------------ --------- --------- ----------
Condensed consolidated balance sheet
at 31 March 2018
31 March 30 September
2018 2017 2017
Unaudited
Unaudited (restated*) Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets
- goodwill 51,089 58,505 57,982
- other 2,127 3,819 2,679
Property, plant and
equipment 11,951 13,188 13,497
Investment in joint
venture 302 152 237
Retirement benefit
assets 11,822 9,834 9,692
Deferred tax assets 1,935 2,355 2,057
------------------------- ------------- -------------
79,226 87,853 86,144
------------------------- ------------- -------------
Current assets
Inventories 4,543 5,032 3,900
Assets held for resale 1,500 1,500 1,500
Trade and other receivables 99,450 92,821 115,598
Current tax assets - - 220
Cash and cash equivalents 112 2,671 6,967
105,605 102,024 128,185
------------------------- ------------- -------------
Total assets 184,831 189,877 214,329
------------------------- ------------- -------------
Non-current liabilities
Obligations under
finance leases (2,344) (2,569) (2,376)
Retirement benefit
obligations (538) (1,918) (760)
Deferred tax liabilities (4,543) (3,813) (3,892)
Provisions (314) (312) (314)
------------------------- ------------- -------------
(7,739) (8,612) (7,342)
------------------------- ------------- -------------
Current liabilities
Borrowings (2,578) (6,200) (3,100)
Trade and other payables (148,929) (148,946) (173,245)
Obligations under
finance leases (2,206) (2,426) (2,547)
Current tax liabilities (794) (1,908) -
Provisions (36) (220) (36)
(154,543) (159,700) (178,928)
------------------------- ------------- -------------
Total liabilities (162,282) (168,312) (186,270)
Net assets 22,549 21,565 28,059
------------------------- ------------- -------------
Share capital 6,259 6,259 6,259
Share premium account 9,635 9,635 9,635
Capital redemption
reserve 3,896 3,896 3,896
Cumulative translation
adjustment 1,239 1,431 1,305
Share based payments
reserve 566 572 680
Retained earnings 954 (228) 6,284
------------------------- ------------- -------------
Total equity 22,549 21,565 28,059
------------------------- ------------- -------------
*details of restated comparative balance sheet as at
31 March 2017 are set out in Note 1 (e).
Condensed consolidated cashflow statement
for the six months ended 31 March 2018
Six months ended Year ended
31 March 30 September
2018 2017 2017
Unaudited Audited
Unaudited (restated**) (restated**)
GBP000 GBP000 GBP000
(Loss)/profit for the period from continuing
operations (255) 3,410 14,628
Share of post tax trading result of
joint venture (65) (81) (166)
Impairment and amortisation of intangible
assets 7,445 6,940 8,080
Depreciation 1,789 1,860 3,675
Profit on sale of property, plant and
equipment (156) (281) (501)
Loss on disposal of subsidiary undertaking 3,030 - -
Expense in respect of share option exercise - 1,181 1,181
(Increase)/decrease in inventories (1,069) 529 1,217
Decrease/(increase) in receivables 12,787 3,689 (22,875)
(Decrease)/increase in payables (20,429) (12,032) 14,842
Current and past service cost in respect
of defined benefit pension scheme 29 29 60
Cash contribution to defined benefit
pension schemes (2,352) (2,322) (5,291)
(Credit)/expense in respect of share
options (114) 1 109
Finance income (1) (81) (30)
Finance expense 385 210 331
Interest paid (385) (210) (528)
Income taxes paid (479) - (2,145)
Income tax expense 2,266 2,231 4,450
Net cash inflow from continuing operating
activities 2,426 5,073 17,037
Net cash outflow from discontinued operating
activities (3,606) (1,441) (1,999)
--------------- -------------------- --------------
Net cash (outflow)/inflow from operating
activities (1,180) 3,632 15,038
--------------- -------------------- --------------
Investing activities
Interest received 1 81 30
Proceeds on disposal of property, plant
and equipment 374 334 663
Purchases of property, plant and equipment (284) (647) (2,084)
Acquisition of subsidiaries net of cash
acquired - (7,014) (7,024)
--------------- -------------------- --------------
Net cash inflow/(outflow) from continuing
investing activities 91 (7,246) (8,415)
Net cash (outflow)/inflow from discontinued
investing activities (46) (4) 244
Net cash inflow/(outflow) from investing
activities 45 (7,250) (8,171)
Financing activities
Dividends paid (3,755) (3,349) (5,226)
Loan repayments (3,100) (3,100) (6,200)
Repayment of obligations under finance
leases (1,410) (1,284) (2,471)
--------------- -------------------- --------------
Net cash outflow from continuing financing
activities (8,265) (7,733) (13,897)
Net cash outflow from discontinued financing
activities (25) (63) (71)
Net cash outflow from financing activities (8,290) (7,796) (13,968)
Net decrease in continuing cash and
cash equivalents (5,748) (9,906) (5,275)
Net decrease in discontinued cash and
cash equivalents (3,677) (1,508) (1,826)
--------------- -------------------- --------------
Net decrease in cash and cash equivalents (9,425) (11,414) (7,101)
Cash and cash equivalents at the beginning
of the period 6,967 14,084 14,084
Effect of foreign exchange rate changes
on cash and cash equivalents (8) 1 (16)
Cash and cash equivalents at the end
of the period (2,466) 2,671 6,967
--------------- -------------------- --------------
Bank balances and cash 112 2,671 6,967
Overdraft (2,578) - -
--------------- -------------------- --------------
(2,466) 2,671 6,967
--------------- -------------------- --------------
** The prior year comparatives have been restated following the reclassification of a discontinued business (see Note 4).
Notes to the condensed consolidated accounts
1. Basis of preparation
(a) The condensed consolidated interim financial report for the six months ended 31 March 2018 and the equivalent period in 2017 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 International Financial Reporting Standards ("IFRS") as adopted by the European Union. The report does not comply with IAS34 "Interim Financial Reporting", which is not currently required to be applied for AIM companies and it was approved by the Directors on 22 May 2018.
(b) The accounts for the year ended 30 September 2017 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 2017 have been audited. The comparative figures for the period ended 31 March 2017 are unaudited.
(c) For the year ending 30 September 2018, there are no new accounting standards, which have been adopted by the EU, applied and implemented for the condensed consolidated interim financial report. The accounting policies adopted in the preparation of the condensed consolidated interim financial report are consistent with those adopted in the Group's accounts for the year ended 30 September 2017.
(d) On 2 February 2018 Ferns Group Ltd ("Ferns") acquired 100% of the ordinary share capital of Forefront Group Ltd, an Engineering Services subsidiary. Consequently Forefront Group Ltd has been treated as a discontinued business.
(e) The comparative balance sheet as at 31 March 2017 has been restated to reflect the prior year adjustment identified during the preparation of the financial statements for the year ended 30 September 2017. Deferred tax should have been charged at 35% on the Retirement Benefit Asset which resulted in an increase in the deferred tax liability of GBP1,309,000. The correction to the corporation tax creditor of GBP833,000 resulted in a net reduction in net assets of GBP476,000.
(f) 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 2017. 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, Yew Trees, Main Street North, Aberford, West Yorkshire LS25 3AA, 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 Group revenue
including share from continuing
share Less share of joint Less share activities
of joint of joint venture of joint Year ended
venture venture venture 30 September
2017* 2017 2017
2018 2018 2018 Unaudited Audited 2017 Audited
Unaudited Unaudited Unaudited (restated) (restated) Audited (restated)
Revenue is
analysed
as follows: GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Engineering
Services 221,768 (853) 220,915 225,514 437,517 (2,239) 435,278
Specialist
Building 40,500 - 40,500 53,573 106,834 - 106,834
Inter segment
revenue (144) - (144) (399) (921) - (921)
----------- ----------- ----------- ------------ ------------ ----------- -----------------
Segment revenue 262,124 (853) 261,271 278,688 543,430 (2,239) 541,191
Central
activities 35 - 35 1,967 2,502 - 2,502
----------- ----------- ----------- ------------ ------------ ----------- -----------------
Group revenue
from
continuing
operations 262,159 (853) 261,306 280,655 545,932 (2,239) 543,693
----------- ----------- ----------- ------------ ------------ ----------- -----------------
*Revenue for the six months ended 31 March 2017 is stated after eliminating GBP1,130,000 of joint venture income.
Six months ended
31 March
Before
Before exceptional Exceptional
exceptional Exceptional items items
items items and and
and and amortisation amortisation
amortisation amortisation of of Year Ended
of of intangible intangible 30
intangible intangible assets assets September
assets assets 2017* 2017 2017 2017
2018 2018 2018 Unaudited Audited Audited Audited
Unaudited Unaudited Unaudited (restated) (restated) (restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
operating
profit
Engineering
Services 12,891 (10,475) 2,416 5,598 27,255 (8,289) 18,966
Specialist
Building 935 - 935 1,158 2,418 - 2,418
------------- ------------- ---------- ----------- ------------- ------------- -----------
Segment
operating
profit 13,826 (10,475) 3,351 6,756 29,673 (8,289) 21,384
Central
activities (956) - (956) (986) (2,005) - (2,005)
------------- ------------- ---------- ----------- ------------- ------------- -----------
Operating
profit 12,870 (10,475) 2,395 5,770 27,668 (8,289) 19,379
Net
financing
expense (384) - (384) (129) (301) - (301)
------------- ------------- ---------- ----------- ------------- ------------- -----------
Profit
before
income
tax 12,486 (10,475) 2,011 5,641 27,367 (8,289) 19,078
------------- ------------- ---------- ----------- ------------- ------------- -----------
*Operating profit for the six months ended 31 March 2017 is stated after charging GBP6,009,000 of exceptional items and GBP1,140,000 of amortisation cost (see Note 3).
3. Exceptional items and amortisation of intangible assets
Six months ended Year ended
31 March 30 September
2018 2017 2017
Audited
Unaudited Unaudited (restated)
GBP000 GBP000 GBP000
Acquisition costs re Giffen Holdings Ltd - 209 209
Loss on disposal 3,030 - -
Impairment of goodwill 6,893 5,800 5,800
Total charges arising from exceptional items 9,923 6,009 6,009
Amortisation of intangible assets 552 1,140 2,280
10,475 7,149 8,289
---------- ---------- --------------------------
The sale of Forefront Group incurred a loss on disposal of GBP3,030,000, and resulted in a GBP6,893,000 write off of goodwill attributable to that subsidiary undertaking. As a consequence of the disposal, the 30 September 2017 GBP657,000 exceptional redundancy and restructuring cost has been reclassified and is now included within the respective comparative loss for the period from discontinued operations.
4. Loss for the period from discontinued operations
Six months ended Year ended
31 March 30 September
2018 2017 2017
Unaudited Audited
Unaudited (restated) (restated)
GBP000 GBP000 GBP000
Revenue 3,850 8,896 15,032
Expenses (5,170) (9,710) (17,808)
Loss before income tax (1,320) (814) (2,776)
Income tax credit - benefit of tax losses - 159 575
Loss for the period from discontinued operations (1,320) (655) (2,201)
---------- ------------ -------------
On 2 February 2018 Ferns Group Ltd ("Ferns") acquired 100% of the ordinary share capital of Forefront Group Ltd, an Engineering Services subsidiary. The trading result for this cash generating unit has therefore been included within the loss for the period from discontinued operations and the comparative figures have been reclassified accordingly.
5. Income tax expense
Six months ended Year ended
31 March 30 September
2018 2017 2017
Unaudited Audited
Unaudited (restated) (restated)
GBP000 GBP000 GBP000
Current tax:
UK corporation tax on (loss)/
profit for the period (1,493) (1,673) (3,294)
Adjustments in respect of previous
periods - - 825
---------- ------------ -------------
Total current tax (1,493) (1,673) (2,469)
Deferred tax (773) (558) (1,981)
---------- ------------ -------------
Income tax expense (2,266) (2,231) (4,450)
---------- ------------ -------------
6. Earnings per share
Six months ended 31 March Year ended 30 September
2018 2017 2017
Unaudited Unaudited Audited
Earnings Earnings EPS DEPS Earnings EPS DEPS
EPS DEPS (restated) (restated) (restated) (restated) (restated) (restated)
GBP000 Pence Pence GBP000 Pence Pence GBP000 Pence Pence
Earnings
before
exceptional
items and
amortisation 10,115 16.16 16.06 10,316 16.54 16.41 22,529 36.04 35.81
Exceptional
items and
amortisation (10,370) (16.57) (16.46) (6,906) (11.07) (10.99) (7,901) (12.64) (12.56)
------------ ----------- --------- ----------- ----------- ----------- ----------- ------------------ -----------
Basic earnings
per share
- continuing
activities (255) (0.41) (0.40) 3,410 5.47 5.42 14,628 23.40 23.25
Loss for
the period
from
discontinued
operations (1,320) (2.11) (2.10) (655) (1.05) (1.04) (2,201) (3.52) (3.50)
------------ ----------- --------- ----------- ----------- ----------- ----------- ------------------ -----------
Basic earnings
per share (1,575) (2.52) (2.50) 2,755 4.42 4.38 12,427 19.88 19.75
------------ ----------- --------- ----------- ----------- ----------- ----------- ------------------ -----------
Weighted
average
number
of shares 62,592 62,983 62,376 62,860 62,514 62,917
----------- --------- ----------- ----------- ------------------ -----------
The dilutive effect of share options is to increase the number of shares by 391,000 (March 2017: 484,000; September 2017: 403,000) and reduce the basic earnings per share by (0.02)p (March 2017: 0.04p; September 2017: 0.13p).
7. Dividends
The proposed interim dividend is 3.33p per share (2017: 3.00p). This will be paid out of the Company's available distributable reserves to shareholders on the register on 1 June 2018, payable on 6 July 2018. 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.
8. Acquisition of subsidiary
On 9 May 2018 the Company announced that it had agreed to acquire the entire issued share capital of QTS Group Limited, a leading specialist independent rail contractor based in Scotland, for a cash consideration of GBP80m. The acquisition was funded by a placement of 12,676,056 new ordinary shares raising GBP45m, and a four year loan of GBP35m provided by HSBC Bank plc. Further information on the acquisition will be included in the Annual Report and Accounts for the year ending 30 September 2018.
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.
END
IR SEIFMFFASEII
(END) Dow Jones Newswires
May 22, 2018 02:00 ET (06:00 GMT)
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