Trading Statement

RNS Number : 8228C

Renew Holdings PLC

14 March 2011

 



Renew Holdings plc              

("Renew" or the "Group")

Trading Update                                                            

Ahead of meetings with shareholders and of the interim results for the half year ended 31 March 2011, the Board confirms that results for the first half of the year are expected to be satisfactory and that the Board anticipates meeting full year market expectations prior to the impact of exceptional redundancy and restructuring costs as set out below.

The Board has concluded that its presence in the non-specialist and discretionary public spending building markets is unable to provide acceptable and sustainable returns at an appropriate balance between risk and opportunity. Renew's building activities in these markets are in the North of England and the Group intends to withdraw from building in these regions when its existing contracted commitments are complete. This will have been achieved by the end of this financial year, other than in respect of the £44m Kirklees Waterfront Campus Project which is proceeding well and is planned to complete in July 2012.

This restructuring is in line with the Board's policy of contract selectivity and management of risk.

The Group will incur an exceptional charge in the second half of the 2011 financial year of up to £3.5m for redundancy and restructuring costs. The restructuring will reduce 2012 building revenue by approximately £60m with no impact on Group profits.

Going forward, Renew's Specialist Building activity will be based in the South. Contract selectivity will remain the guiding principle with our focus being on the robust new build Social Housing, High Quality Residential and Retail markets. Our business in these sectors is well secured with good forward visibility.

The Board remains committed to its established strategy of moving the balance of the Group's activities to Specialist Engineering. In Specialist Engineering, the market and forward order books remain stable. The integration of Amco, acquired at the end of February 2011, is progressing in line with expectations.

The balance of activity in the Group will be transformed in 2012 when the Board anticipates that Specialist Engineering will account for over 60% of revenue (2010: 44%) with 85% of activity being in non-discretionary regulated markets in Energy (including Nuclear), Environmental and Rail. Over 80% of 2012 Group operating profits before central costs are expected to be realised from Specialist Engineering.

Renew's interim results for the six months ended 31 March 2011 will be announced on Tuesday 24 May 2011.

ENQUIRIES:

Renew Holdings plc	Tel: [phone]
Brian May, Chief Executive
John Samuel, Group Finance Director
Brewin Dolphin	Tel: [phone]
Sandy Fraser
Sean Wyndham-Quin

 

END

 

 

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