TIDMRNWH
RNS Number : 4768Z
Renew Holdings PLC
16 May 2023
16 May 2023
Renew Holdings plc
("Renew" or the "Group" or the "Company")
Half-year Report
Continued outperformance and strong organic growth; Board
confident in its full year expectations
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 2023 ("the period").
Financial Highlights
Six months ended 31 March 2023 HY23 HY22 Change
GBPm GBPm
Group revenue [1] GBP471.8m GBP414.3m +13.9%
---------- ---------- --------
Adjusted operating profit(1) GBP28.3m GBP26.0m +9.0%
---------- ---------- --------
Operating profit GBP26.9m GBP22.1m +21.9%
---------- ---------- --------
Adjusted operating margin(1) 6.0% 6.3% -0.3bps
---------- ---------- --------
Profit before tax GBP26.3m GBP21.8m +20.9%
---------- ---------- --------
Adjusted earnings per share(1) 27.4p 26.2p +4.7%
---------- ---------- --------
Interim dividend 6.00p 5.67p +5.8%
---------- ---------- --------
-- Group order book of GBP890m (HY22: GBP771m)
-- Net cash (pre-IFRS16) of GBP17.0m (HY22: net debt GBP1.2m)
-- Delivered operating profit and revenue well ahead of strong prior half-year comparatives
-- Increased interim dividend reflects resilient trading performance, healthy cash generation
and strong forward order book
-- Strong organic revenue growth of 11.6% driven by continued focus on collaboration between
our brands
Operational Highlights
-- Successful joint venture between our brands in the Highways market and growing opportunity
for collaboration in the Water sector
-- Secured new CP7 framework positions with Wales & Western to be delivered through a unique
collaboration between our rail brands
-- Enisca continues to integrate well following its acquisition in November 2022
-- Organic growth in our aviation activities
-- Awarded Major Civils, Major Electrical and Major Mechanical frameworks for Welsh Water
Current Trading & Outlook
-- Trading has started well in the second half of the year and we remain confident that the full
year will be in line with the Board's expectations
-- Whilst we are not immune from the continuing inflationary headwinds in the economy, our business
is well placed to mitigate their impact due to the nature of our variable, cost-plus contracts
-- The Board believes that the structural growth drivers in our end markets remain extremely
attractive
Paul Scott, CEO of Renew, commented:
"We are pleased to report another period of outstanding
performance, once again illustrating the resilient and
differentiated nature of our high-quality, low-risk business model.
Supported by the commercial terms within our frameworks, the Group
has been able to successfully alleviate inflation challenges
throughout the period, delivering operating profit and revenue
ahead of strong prior half-year comparatives. Our results in a
difficult macroeconomic environment highlight the strength of our
business model, which is underpinned by committed regulatory
spending periods and long-term frameworks resulting in repeatable
revenue streams and highly visible earnings. Further, the
mission-critical nature of the work we perform fosters long-lasting
relationships with our clients illustrated through our strong track
record of repeat contract wins.
None of this success would be possible without the outstanding
work of our directly employed colleagues who continue to go above
and beyond for our clients. I would like to thank, on behalf of the
Board, all our dedicated workforce for their outstanding and
continued commitment to providing our clients with our mission
critical, highly responsive services at all times.
With ongoing strong demand in our end markets, we enter the
second half of the year confident in our full year performance and,
longer term, in the attractiveness of the structural growth
drivers. We welcomed the Government's reiterated commitment to a
record GBP600bn investment in transforming the UK's infrastructure
to meet the target of net zero carbon emissions by 2050. This has
been reinforced by the Government's announcements in March which
show it has sharpened its focus on investment in infrastructure to
improve climate resilience, which will bring significant
opportunities for the Group."
For further information, please contact:
Renew Holdings plc www.renewholdings.com
Paul Scott, Chief Executive Officer via FTI Consulting
Sean Wyndham-Quin, Chief Financial Officer 020 3727 1000
Numis Securities Limited (Nominated Adviser
and Joint Broker) 020 7260 1000
Stuart Skinner / Kevin Cruickshank
Peel Hunt LLP (Joint Broker) 020 7418 8900
Mike Burke / Harry Nicholas / Charles
Batten
FTI Consulting (Financial PR) 020 3727 1000
Alex Beagley / Sam Macpherson / Rafaella Renew@fticonsulting.com
de Freitas
About Renew Holdings plc
Renew 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 98 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 Science, Landmark and High
Quality Residential markets in London and the Home Counties.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
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.
Chief Executive Officer's Review
Consistent year on year outperformance demonstrates our
differentiated model
The Group has once again delivered an outstanding trading
performance over the first six months of the financial year,
demonstrating the resilience and differentiated nature of our
high-quality, low-risk business model, combined with ongoing strong
demand we have seen in our end markets.
This consistent year on year outperformance has been achieved
despite the turbulence in the wider economy and is a result of our
unique business model which is extremely resilient because of a
number of key characteristics. We work in markets underpinned by
highly visible, reliable and repeatable committed regulatory
spending periods which are subject to long term multi-year
contracts providing our business with predictable and recurring
revenue streams.
Our brands within the Renew family have long-term relationships
in place with all our stakeholders and have a strong track record
of winning repeat contracts with our clients due to the quality of
the work performed by our directly employed workforce.
Supported by the commercial terms within our frameworks, the
Group has been able to successfully manage inflation challenges
throughout the period, delivering operating profit and revenue
ahead of strong prior half-year comparatives. Our track record of
consistent year on year growth across all our key financial metrics
clearly illustrates the critical nature of the work we do for our
clients and the committed, long-term spending cycles that underpin
our end markets. Our focus on asset maintenance and renewal means
we are not dependent on large, capital-intensive contract awards,
providing Renew with a significantly lower risk profile than others
operating in our sectors.
During the period, it was encouraging to see the Government's
Autumn Statement re-confirm a commitment to a record GBP600bn [2]
investment in transforming the UK's infrastructure to meet the
target of net zero carbon emissions by 2050. Further, in March
2023, the Government announced [3] ambitious plans to scale up
affordable, clean, homegrown power and build thriving green
industries to boost the UK's energy security and independence which
offers further opportunities for growth. With pressure on public
expenditure as a result of the difficult macroeconomic environment,
we are seeing an increased focus on maintaining and renewing
existing assets instead of major infrastructure enhancement
projects which bodes well for our business and our well-established
strategy.
We were particularly pleased with our rate of organic growth
during the period. This was understandably, in part, linked to the
current levels of inflation, but it was also driven by the
continued focus on collaboration between our brands. Over the first
half of the year, we have successfully implemented a joint venture
between our brands in the Highways market, and we are seeing a
growing opportunity for collaboration in the Water sector. This
pleasing organic growth performance combined with our strong
balance sheet and significant cash generation, gives us the
firepower and flexibility to invest in further value-accretive
M&A opportunities.
Following the successful acquisition of Enisca in November 2022,
I am pleased to report the business is integrating well into the
Renew family and is trading in line with management's expectations.
Across our sectors we continue to actively appraise M&A
opportunities that fit within our strict acquisition criteria and
will complement our existing capabilities and extend our footprint
into our target markets in the UK.
After an outstanding FY22, the first six months of FY23 clearly
demonstrate the consistent and resilient nature of our business
model. We enter the second half of the year with good momentum and
a strong forward order book which underpins our confidence in our
full year outturn. We are seeing continued demand for our services
across all our markets and that is largely due to the outstanding
work of our directly employed colleagues who continue to go above
and beyond for our clients. I would like to thank, on behalf of the
Board, all our dedicated workforce for their outstanding and
continued commitment to providing our clients with our mission
critical, highly responsive services at all times.
Renew's 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 long-term value
creation:
-- The health, safety and wellbeing of our colleagues, and those impacted by our work, remains
our number one priority and we have implemented industry-leading safe working practices for
the Group's employees and operations.
-- We operate a differentiated, diversified, low-risk business model, providing critical asset
maintenance and renewals services that are not dependent on large, high-risk, 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 being able
to deliver extremely responsive solutions.
-- The commercial terms within our frameworks mean we are able to proactively and effectively
manage cost inflation.
-- Our businesses are well established in complex, challenging and highly regulated markets with
significant 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,
reliable, committed regulatory spending periods, providing predictable cashflows.
-- We have a proven track record of sustainable value creation, reliable revenue growth and strong
returns on capital thanks to our highly cash generative earnings model and clearly defined
strategy.
-- We are committed to growing the business both organically and through selective complementary
acquisitions while maintaining a disciplined approach to capital allocation and risk underpinned
by a strong balance sheet.
-- We have strong relationships in place with all our stakeholders, from our workforce to our
customers, suppliers, communities and shareholders.
-- Our model of compounding earnings through the redeployment of internally generated cashflows
enables us to execute on our strategy of delivering reliable and consistent growth for all
our stakeholders.
Compelling market drivers
Our businesses bring exposure 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 GBP600bn [4] in an infrastructure-led
recovery, two-thirds of which will be in the transport and energy sectors, with fiscal stimulus
measures likely to flow through to lower cost infrastructure maintenance programmes ahead
of larger, more capital-intensive enhancement schemes;
-- greater focus on sustainability and climate change as part of the UK's target of reaching
net-zero carbon emissions by 2050, together with flood risk prevention measures and investment
in nuclear projects, renewables and rail electrification programmes;
-- population growth increasing the pressure on transportation, 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.
Results overview
During the period, Group revenue increased to GBP471.8m (HY22:
GBP414.3m), which includes a contribution from Enisca since
December as well as organic growth of 11.6%. The Group achieved an
adjusted [5] operating profit of GBP28.3m (HY22: GBP26.0m) and
adjusted(5) operating profit margin of 6.0% (HY22: 6.3%). As at 31
March 2023, the Group had pre-IFRS16 net cash of GBP17.0m (31 March
2022: net debt GBP1.2m). The Group's order book at 31 March 2023
has strengthened to GBP890m (HY22: GBP771m) underpinned by
long-term framework positions.
Dividend
The Group's resilient trading performance, cash position and
strong forward order book have given the Board the confidence to
declare an interim dividend of 6.00p (HY22: 5.67p) per share. This
represents a 5.8 per cent increase on the last interim dividend
paid. This will be paid on 12 July 2023 to shareholders on the
register as at 9 June 2023, with an ex-dividend date of 8 June
2023.
Board changes
As announced on 15 August 2022, Elizabeth (Liz) Barber, was
appointed as a Non-Executive Director effective 1 November 2022.
Liz brings a wealth of experience gained over 12 years in the
regulated water sector, an established and growing market for Renew
following the acquisition of Enisca in November. Combined with her
financial background, Liz will complement the Board's current
skillset and will be invaluable as we continue our growth
journey.
Engineering Services
Our Engineering Services activities account for over 98 per cent
of the Group's adjusted(5) operating profit and delivered revenue
of GBP435.8m (HY22: GBP377.5m) with an adjusted(5) operating profit
of GBP29.7m (HY22: GBP26.6m) resulting in an operating margin of
6.8% (HY22: 7.1%). Our Engineering Services organic growth rate in
the period was 12.9%. At 31 March 2023, the Engineering Services
order book was GBP780m (31 March 2022: GBP705m). The Group's
resilient performance was driven by continued positive momentum in
our Rail, Infrastructure and Environmental sectors.
Rail
Network Rail, a significant strategic customer for the Group, is
expected to invest GBP44bn [6] over Control Period 7 ("CP7"), which
runs from 2024 to 2029 with expenditure expected to focus on
operations, maintenance, and renewal of the national rail network.
This highlights and plays to our strengths as does the Government's
commitment to a rail decarbonisation programme including a
significant investment in electrification programmes, as part of
the overall UK target to deliver net zero by 2050.
As the largest 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
frameworks. The Group assists Network Rail through our
mission-critical renewals and maintenance services supporting
assets including bridges, embankments, tunnels, drainage systems,
signalling, electrification, devegetation, fencing and plant.
During the period, we successfully secured new CP7 framework
positions with Wales & Western, on their Wales Structures and
Wales & Western Electrification & Plant frameworks. These
5-year frameworks will be delivered through a unique collaboration
between our rail brands and would not have been possible without
our acquisition of REL in 2021. REL is a leading provider of
high-quality services associated with the installation and
commissioning of Overhead Line Electrification (OLE) and their
capabilities, in conjunction with our existing rail brands, have
opened up framework positions to the Group that were previously
unattainable. This framework will see the Group deliver a broad
scope of Electrification & Plant rail systems, including low
and high voltage power and OLE, creating efficiencies and
developing innovation on behalf of Network Rail. Our success in
securing this long-term framework sets a platform to unlock similar
opportunities across other Network Rail regions in their ongoing
CP7 framework procurement activity.
As stated in our final results announced in November 2022 we
have secured extensions to major CP6 frameworks including in
Scotland which, in conjunction with our recent appointment in Wales
& Western, leaves the Group ideally positioned as we move into
the next control period.
Network Rail's five devolved regions recently began the process
of re-procuring their Asset Maintenance and Capital Delivery
frameworks for the next control period. Similarly, the Office of
Rail Regulation recently outlined its Statement of Funds for CP7
which sets out a comparable investment to CP6 [7] and will likely
place a greater emphasis on maintenance and renewals activities.
The final determination funding plans are expected to be confirmed
in the first half of 2024.
While we remain mindful of recent speculation that public
expenditure budgets for CP7 may be constrained, we are not
currently seeing any indication that would suggest the level of
demand for our services is reducing. In fact, we continue to see
record demand for our services which is illustrated by our trading
momentum as well as a strong forward order book. Further, recent
success stories like our framework awards in Wales & Western
demonstrate the growing capabilities within our business when we
leverage the expertise within our brands through collaboration.
The compelling maintenance-focused structural growth drivers
within this sector and Renew's high quality engineering expertise
leaves the Group ideally positioned to deliver long term,
profitable growth in Rail. Our teams remain focused on securing our
existing frameworks which are coming up for renewal while
continuously appraising other areas for organic growth. The early
stages of increased electrification on the rail network bode well
for future CP7 framework applications where our three rail brands
have formed a collaborative and unique position for OLE delivery,
another key strategic growth pillar for the Group.
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.
The UK Government's second Road Investment Strategy ("RIS2")
(2020-2025) committed an unprecedented level of spending on
England's strategic road network. Of the GBP24bn [8] committed over
a five-year period, GBP11.9bn of this funding is ringfenced for
operations, maintenance and renewals which gives Renew a unique
advantage from which it has continued to benefit.
During the period, work continued on the National Highways
Scheme Delivery Framework ("SDF") across five framework lots,
covering civil engineering, road restraint systems and drainage
disciplines, worth GBP147m over six years. The Group operates as a
Tier 1 supplier and continues to leverage the combined expertise of
its brands, delivering the road restraint lots through a joint
venture between two subsidiary businesses, illustrating the
synergies and efficiencies that can be achieved through
collaboration. This is the only successful joint venture on the SDF
and positions the Group as the second largest supplier of road
restraint systems in the country.
As we look ahead to RIS3 (2025-2030), for which the Government
recently began a market consultation, it appears that critical
maintenance and renewals, as opposed to significant enhancement
projects, will come into even sharper focus. Emma Ward, director
general for the Roads, Places and Environment group at the
Department for Transport said on RIS3 "the headroom for enhancement
projects is likely to be less. We also have an ageing network, so
the importance of renewals and maintenance actually increases over
time." [9] This continued emphasis on renewals and maintenance
plays well into the Group's capabilities as we move into RIS3 and
Renew remains uniquely placed to seize attractive growth and market
share opportunities within Highways.
Aviation
The Group continues to see growing momentum in Aviation
following its appointment to the 5-year Manchester Airports Group
GBP700m Civils Framework to deliver medium-sized civil-engineering
projects valued between GBP3m - GBP10m. Work began at Manchester
Airport during the period where the Group undertakes
electro-mechanical and civil engineering services. With passenger
levels this summer predicted to exceed pre-Covid levels as well as
several years of underinvestment in critical assets in the
industry, the tailwinds in this sector are clear. It is
particularly pleasing to have organically grown this capability
within the Group and it is an area of increased focus as we look to
continue to grow in this segment.
Wireless Telecoms
The nation's connectivity is becoming ever more critical in the
digital age, and as a result the wireless telecoms sector contains
many attractive growth drivers. An estimated GBP30bn [10] is
required to upgrade the nation's broadband networks to
gigabit-capable speeds, which includes the UK Government's GBP5bn
investment in the roll-out of 5G, and the expansion of the Shared
Rural Network, the Government's GBP500m programme to extend 4G
mobile coverage to 95% of the UK.
As a leader in the wireless telecommunications market, we have
exposure to all of these opportunities, holding long-term
relationships, through framework agreements, with the main UK
network operators, and managed service providers.
During the period, the Group continued to broaden its customer
base and progressed well in our works with Vodafone, EE and BT to
remove Huawei equipment from UK networks by 2027, a critical
regulatory target. Strong progress was also made with the design,
construction and commissioning of both 4G and 5G technology for all
of the UK network operators.
Energy
Nuclear
Having worked for over 75 years in the UK's civil nuclear
market, we provide a multidisciplinary service through our large
complement of highly skilled employees who operate to demanding
nuclear standards, including decontamination and decommissioning
services, operational support and asset care, as well as waste
retrieval in high hazard areas such as legacy storage ponds and
silos.
The Government's total nuclear decommissioning provision is
estimated at GBP124bn [11] over the next 120 years, with around 75%
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 services
provider.
We continue to operate across a number of long-term frameworks
at Sellafield and during the period the Group secured further
framework positions as part of the Project Partnership Programme
("PPP") . Appointed by all four PPP Key Delivery Partners, the
framework runs for a further 17 years through to 2040 and will see
the Group deliver critical Mechanical, Electrical and HVAC
services. The main PPP framework is worth up to GBP7bn [12] over
its 20-year duration.
We continue to build relationships outside of Sellafield,
broadening opportunities for decommissioning services that are in
increasing demand at other UK nuclear facilities.
While the work we do in this sector is predominantly focused on
decommissioning and hazard waste removal, the recent Government
Energy Security Plan, Powering Up Britain, suggests that new
nuclear will offer further growth opportunities in the future. The
UK Government has committed to achieve net zero emissions by 2050,
and decarbonisation of our energy supply is a key step to achieve
carbon neutrality. The Government is delivering a radical shift in
the UK energy system towards cleaner, more affordable energy
sources of which new nuclear is an essential component. This is
underpinned by the creation of Great British Nuclear [13] and the
Government's target to commence construction of up to three new
nuclear plants in the next 10 years. [14] This provides long-term
and sustainable demand for our specialist site services as well as
our manufacturing capabilities in high grade nuclear
components.
Electric Vehicle Charging
The UK Government's commitment to ban the sale of non-electric
new cars by 2030 provides the Group with another exciting growth
opportunity. This target has been identified as a key priority in
supporting the Government's net zero emissions targets as well as
its ambition to become the fastest nation in the G7 to decarbonise
road transport. [15] Further, in the Government's Green Day
announcements, GBP381m was committed to the Local Electric Vehicle
Infrastructure fund to help install tens of thousands of new
charging points across the country [16] to add to the GBP950m
committed to the Rapid Charging Fund. During the period we
continued to design and construct charging facilities for large
fleet operators and we are exploring further opportunities in this
sector and see it as an exciting growth avenue going forward.
Environmental
Water
Following the acquisition of Enisca in November 2022 and Browne
in 2021, the Group's water division continues to go from strength
to strength. Enisca represents an excellent strategic fit, adding
new capabilities and clients to our water business and broadening
the Group's footprint in the sector. Enisca is integrating well
with the wider Group and is trading in-line with management's
expectations.
Our offer of scheduled maintenance and renewals services in
addition to extensive 24/7 emergency reactive works is further
enhanced by the addition of Enisca's Mechanical, Electrical,
Instrumentation, Controls and Automation ("MEICA") capabilities and
expands the mission-critical services we provide to our clients
around the UK.
We continue to benefit from the UK Government's commitment to
spend GBP51bn over AMP7 [17] into 2025 and have seen an expansion
in investment through our clients' operational expenditure budgets.
For the rest of AMP7 we expect to see an increasingly accelerated
programme of regulatory spend over the final years, given the lower
level of expenditure in the early part of the cycle.
We have strengthened relationships with our existing clients
which includes 12 regulated water companies.
In the period we secured places on the D r Cymru Welsh Water
Major Civils, Major Electrical and Major Mechanical frameworks,
each lasting for up to 8 years, and we renewed our Pressurised
Pipeline framework with the same client. Elsewhere we secured
places on Thames Water's Waste Network Services framework and
Severn Trent's Capital Delivery Programme.
Other highlights included the start of our work on Wessex
Water's Phosphorus Removal Programme, the award of further batches
of mains renewal works for Thames Water, and the continued success
of our Repair & Maintenance framework for Southern Water in a
joint venture.
As in other sectors, we are continuing to leverage collaborative
potential between our brands and are increasingly seeing
opportunities to combine our expertise. This will be particularly
beneficial as we move into AMP8 (2025-2030) where we expect to see
greater investment than in previous cycles. Procurement for AMP8
commenced recently and it was outlined at the 2023 Wastewater
conference that "substantial investment will be needed now and all
the way through the next few AMPs". [18] At the conference, John
Russel, Senior Director Strategy, Finance and Infrastructure at
Ofwat suggested that this level of investment will need to be two
to three times the current level to achieve the objectives they
have set out. [19] Russel also indicated that the sector needs to
focus more on asset maintenance which plays to the strengths of our
business model and leaves Renew well positioned to benefit from
these trends in the Water market as companies increase expenditure
on capital maintenance and asset optimisation.
Flood & Coastal
Changing weather conditions have highlighted the need for
investment in flood defences, and the UK Government has committed
GBP5.2bn [20] from 2021-2027 to improve flood defence
infrastructure. Of this, GBP1.6bn [21] is directed towards coastal
erosion and sea flooding projects where the Group currently
undertakes work for the Environment Agency ("EA") on the EA Flood
and Coastal Erosion Framework.
With growing investment in the segment, and increased pressure
on our Government to improve the UK's resilience for climate
change, the Group is well-positioned to expand its presence in the
sector. We also continue to work on national frameworks for the
Canal and River Trust, Scottish Canals and Natural Resources
Wales.
Land Remediation and Specialist Restoration
In Land Remediation, we have seen sustained demand for our
specialist environmental services during the period, including an
extension of our Land Regeneration framework with National
Grid.
Our specialist restoration and conservation services progressed
at Lambeth Palace, at the Edinburgh Botanical Gardens and at the
Parliamentary Estate where we continue to target long-term growth
opportunities.
Specialist Building
Our Specialist Building business focuses on the Science,
Landmark and High Quality Residential, markets in London and the
Home Counties.
Revenue was in line with expectations at GBP36.0m (HY22:
GBP36.9m), with operating profit of GBP0.5m (HY22: GBP0.6m) and
operating margin of 1.4% (HY22: 1.6%). The order book has
strengthened to GBP110m (HY22: GBP66.0m), providing good visibility
for the second half and into 2024.
ESG
It is well recognised that investment into low carbon
infrastructure will be fundamental in delivering the Government's
ambitions of delivering net zero emissions in the UK by 2050. From
the rail network and digitally assisted roads to high-speed
telecoms and clean energy, Renew has a key enabling role to play on
the frontline of efforts to decarbonise the economy.
During the period we were pleased to retain our LSE Green
Economy Mark, which recognises London-listed companies and funds
that derive more than 50% of their revenues from products and
services that are contributing to the environmental objectives such
as climate change mitigation and adaptation, waste and pollution
reduction, and the circular economy.
We continue to focus our energy on and are making progress
against our four key areas:
-- climate action;
-- operating responsibly;
-- empowering our people; and
-- building social value.
During the period, our subsidiary businesses undertook a range
of initiatives including volunteering and community support,
trialling the use of alternative, cleaner energy sources to power
our sites and the procurement of electrical and hybrid vehicles
across our businesses.
We have established quantitative sustainability targets in our
four key areas to embed our ESG strategy across the business and it
is the Board's ambition that the Group will achieve net zero by no
later than 2040. We look forward to providing a more detailed
update on progress against these targets at our Final Results in
November 2023.
Health & Safety
Health and safety is at the heart of everything that we do and
the Group remains dedicated to ensuring safe working practices for
all employees and those who work with us. Our SHEQ performance in
the first half was strong and ahead of the targets we set
ourselves.
Outlook - strong momentum entering H2; confidence in full year
outturn
After an outstanding FY22, the first six months of FY23 again
reiterate the differentiated qualities and resilient nature of our
business model, and we have once again grown against record prior
half-year comparatives.
Whilst we are not immune from the continuing inflationary
headwinds in the economy, our business is well placed to mitigate
their impact due to the nature of our variable, cost-plus
contracts. Trading has started well in the second half of the year
and our strong forward order book underpins our confidence that the
full year will be in line with the Board's expectations.
In addition to the Government's GBP600bn [22] commitment to
transform the UK's infrastructure, we read with interest the
Government's announcements in March which show it has sharpened its
focus on investment in infrastructure to improve climate resilience
and energy self-sufficiency, investing in renewable sources and
nuclear capabilities [23] . Consequently, longer term we also
believe the structural growth drivers in our end markets are
extremely attractive and we remain well positioned to seize both
organic and acquisitive growth opportunities in line with our
strategic priorities and ambitions.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 March
2023
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
2023 2023 2023 2022* 2022 2022 2022
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue: Group
including
share of joint
ventures 2 471,823 - 471,823 414,343 849,048 - 849,048
Less share of
joint
ventures'
revenue (18,138) - (18,138) (15,228) (32,772) - (32,772)
---------------- ----- ------------- ------------- ----------- ----------- ------------- -------------- ----------
Group revenue
from
continuing
activities 2 453,685 - 453,685 399,115 816,276 - 816,276
Cost of sales (387,229) - (387,229) (342,373) (693,336) - (693,336)
------------- ------------- ----------- ----------- ------------- -------------- ----------
Gross profit 66,456 - 66,456 56,742 122,940 - 122,940
Administrative
expenses (39,822) (1,266) (41,088) (36,559) (68,184) (8,527) (76,711)
Other operating
income 1,695 - 1,695 1,665 3,655 - 3,655
Share of
post-tax
result of
joint
ventures 6 (133) (127) 250 362 (267) 95
------------- ------------- ----------- ----------- ------------- -------------- ----------
Operating
profit 2 28,335 (1,399) 26,936 22,098 58,773 (8,794) 49,979
Finance income 52 - 52 3 16 - 16
Finance costs (666) - (666) (329) (573) - (573)
Other finance
income
- defined
benefit
pension
schemes - - - - 33 - 33
------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit before
income
tax 2 27,721 (1,399) 26,322 21,772 58,249 (8,794) 49,455
Income tax
expense 5 (6,096) 657 (5,439) (4,158) (11,330) 1,782 (9,548)
------------- ------------- ----------- ----------- ------------- -------------- ----------
Profit for the
period from
continuing
activities 21,625 (742) 20,883 17,614 46,919 (7,012) 39,907
------------- ------------- ------------- --------------
Loss for the
period
from
discontinued
operations 4 (920) (1,103) (2,242)
----------- ----------- ----------
Profit for the
period
attributable
to equity
holders
of the parent
company 19,963 16,511 37,665
----------- ----------- ----------
Basic earnings
per share
from
continuing
operations 6 27.41p (0.94)p 26.47p 22.37p 59.52p (8.89)p 50.63p
Diluted
earnings
per share from
continuing
operations 6 27.33p (0.94)p 26.39p 22.23p 59.30p (8.87)p 50.43p
------------- ------------- ----------- ----------- ------------- -------------- ----------
Basic earnings
per
share 6 27.41p (2.10)p 25.31p 20.97p 59.52p (11.74)p 47.78p
Diluted
earnings
per share 6 27.33p (2.10)p 25.23p 20.84p 59.30p (11.70)p 47.60p
------------- ------------- ----------- ----------- ------------- -------------- ----------
Proposed
dividend 7 6.00p 5.67p 17.00p
----------- ----------- ----------
*Operating profit for the six months ended 31 March 2022 is
stated after charging GBP3,561,000 of amortisation cost and
GBP335,000 aborted acquisition cost (see Note 3).
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March 2023
Six months ended Year ended
31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period attributable
to equity holders of the parent company 19,963 16,511 37,665
------------- ------------- ---------------
Items that will not be reclassified
to profit or loss:
Movement in actuarial valuation of
the defined benefit pension schemes - - 347
Movement on deferred tax relating
to the defined benefit pension schemes - - (240)
------------- ------------- ---------------
Total items that will not be reclassified
to profit or loss - - 107
------------- ------------- ---------------
Items that are or may be reclassified
subsequently to profit or loss:
Exchange movement in reserves - 1 -
Total items that are or may be reclassified
subsequently to profit or loss - 1 -
------------- ------------- -----------
Total comprehensive income for the
period attributable to equity holders
of the parent company 19,963 16,512 37,772
------------- ------------- -----------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2023
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 2021 7,868 66,378 3,896 1,308 1,079 44,290 124,819
Transfer from income
statement for the period 16,511 16,511
Dividends paid (8,809) (8,809)
New shares issued 18 1,451 1,469
Recognition of share
based payments (32) (32)
Exchange differences 1 1
Cumulative translation
reclassification (1,309) 1,309 -
At 31 March 2022 7,886 66,378 3,896 - 1,047 54,752 133,959
Transfer from income
statement for the period 21,154 21,154
Dividends paid (4,472) (4,472)
LTIP share issue reclassification (1,451) (1,451)
Recognition of share
based payments 690 690
Vested share option transfer (362) 362 -
Reclassification on closure
of overseas subsidiaries (1,309) (1,309)
Actuarial movement recognised
in the pension schemes 347 347
Movement on deferred
tax relating to the pension
schemes (240) (240)
-------- -------- ----------- ------------ --------- --------- ----------
At 30 September 2022 7,886 66,378 3,896 - 1,375 69,143 148,678
Transfer from income
statement for the period 19,963 19,963
Dividends paid (8,936) (8,936)
New shares issued 27 41 68
Recognition of share
based payments 336 336
Vested share option transfer (777) 777 -
At 31 March 2023 7,913 66,419 3,896 - 934 80,947 160,109
-------- -------- ----------- ------------ --------- --------- ----------
CONDENSED CONSOLIDATED BALANCE SHEET
at 31 March 2023
31 March 31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Non-current assets
Intangible assets -
goodwill 148,805 139,698 138,445
- other 30,849 25,814 22,385
Property, plant and
equipment 18,291 15,154 17,834
Right of use assets 17,414 16,037 15,519
Investment in joint
ventures 4,009 5,560 5,538
Retirement benefit
assets 2,230 761 2,230
Deferred tax assets 3,095 1,861 2,899
----------------------- ---------- -------------
224,693 204,885 204,850
----------------------- ---------- -------------
Current assets
Inventories 3,566 2,061 2,613
Assets held for resale - 1,250 1,250
Trade and other receivables 168,267 166,812 164,590
Current tax assets 1,266 1,316 -
Cash and cash equivalents 17,012 - 20,218
----------------------- ---------- -------------
190,111 171,439 188,671
----------------------- ---------- -------------
Total assets 414,804 376,324 393,521
----------------------- ---------- -------------
Non-current liabilities
Lease liabilities (9,554) (8,542) (8,640)
Retirement benefit
obligation (1,049) - (1,049)
Deferred tax liabilities (11,360) (8,219) (7,568)
Provisions (338) (441) (338)
----------------------- ---------- -------------
(22,301) (17,202) (17,595)
----------------------- ---------- -------------
Current liabilities
Borrowings - (1,211) -
Trade and other payables (217,788) (215,320) (212,684)
Lease liabilities (6,521) (5,871) (5,884)
Current tax liabilities - - (595)
Provisions (8,085) (2,761) (8,085)
----------------------- ---------- -------------
(232,394) (225,163) (227,248)
----------------------- ---------- -------------
Total liabilities (254,695) (242,365) (244,843)
----------------------- ---------- -------------
Net assets 160,109 133,959 148,678
----------------------- ---------- -------------
Share capital 7,913 7,886 7,886
Share premium account 66,419 66,378 66,378
Capital redemption
reserve 3,896 3,896 3,896
Share based payments
reserve 934 1,047 1,375
Retained earnings 80,947 54,752 69,143
----------------------- ---------- -------------
Total equity 160,109 133,959 148,678
----------------------- ---------- -------------
CONDENSED CONSOLIDATED CASHFLOW STATEMENT
for the six months ended 31 March 2023
Six months ended Year ended
31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Profit for the period from continuing
operating activities 20,883 17,614 39,907
Share of post-tax trading result of
joint venture 127 (250) (95)
Amortisation of intangible assets and
goodwill remeasurement 712 3,561 8,109
Research and development expenditure
credit (725) - (1,353)
Depreciation 5,129 4,978 10,136
Profit on sale of property, plant and
equipment (302) (561) (830)
Decrease/(increase) in inventories 505 17 (534)
Decrease/(increase) in receivables 3,734 (9,637) (7,455)
(Decrease)/increase in payables (4,940) 7,191 10,986
Current and past service cost in respect
of defined benefit pension scheme - 25 23
Cash contribution to defined benefit
pension schemes - (252) (315)
Charge/(credit) in respect of share
options 336 (32) 657
Finance income (52) (3) (16)
Finance expense 666 329 540
Interest paid (666) (329) (573)
Income taxes paid (6,136) (3,500) (7,595)
Income tax expense 5,439 4,158 9,548
Net cash inflow from continuing operating
activities 24,710 23,309 61,140
Net cash outflow from discontinued operating
activities (611) (424) (3,977)
----------- ---------- -------------
Net cash inflow from operating activities 24,099 22,885 57,163
----------- ---------- -------------
Investing activities
Interest received 52 3 16
Dividend received from joint venture - 264 265
Proceeds on disposal of property, plant
and equipment 422 1,116 1,514
Purchases of property, plant and equipment (1,979) (814) (5,056)
Acquisition of subsidiaries net of cash
acquired (13,334) - -
----------- ---------- -------------
Net cash (outflow)/inflow from investing
activities (14,839) 569 (3,261)
Financing activities
Dividends paid (8,936) (8,809) (13,281)
Issue of Ordinary Shares 68 1,469 18
New loan 23,000 18,000 18,000
Loan repayments (23,000) (22,375) (22,373)
Repayment of obligations under finance
leases (3,598) (3,598) (6,693)
----------- ---------- -------------
Net cash outflow from financing activities (12,466) (15,313) (24,329)
Net (decrease)/increase in continuing
cash and cash equivalents (2,595) 8,565 33,550
Net decrease in discontinued cash and
cash equivalents (611) (424) (3,977)
----------- ---------- -------------
Net (decrease)/increase in cash and
cash equivalents (3,206) 8,141 29,573
Cash and cash equivalents at the beginning
of the period 20,218 (9,355) (9,355)
Effect of foreign exchange rate changes
on cash and cash equivalents - 3 -
Cash and cash equivalents at the end
of the period 17,012 (1,211) 20,218
----------- ---------- -------------
Bank balances and cash 17,012 - 20,218
Bank overdraft - (1,211) -
----------- ---------- -------------
Cash and cash equivalents at end of
period 17,012 (1,211) 20,218
----------- ---------- -------------
NOTES TO THE CONDENSED CONSOLIDATED ACCOUNTS
1 Basis of preparation
(a) The condensed consolidated interim financial report for the
six months ended 31 March 2023
and the equivalent period in 2022 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
16 May 2023.
(b) The accounts for the year ended 30 September 2022 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 2022 have been audited. The comparative
figures for the period ended 31 March 2022 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 2022 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 2022. 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 revenue
Group from
including Less Group Less continuing
share share including share activities
of joint of joint share of of joint Year ended
ventures ventures joint ventures ventures 30 September
2023 2023 2023 2022 2022 2022 2022
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
revenue
Engineering
Services 435,828 (18,138) 417,690 362,232 778,917 (32,772) 746,145
Specialist
Building 35,995 - 35,995 36,882 70,125 - 70,125
Segment revenue 471,823 (18,138) 453,685 399,114 849,042 (32,772) 816,270
Central
activities - - - 1 6 - 6
----------- ----------- ----------- ----------- --------------- ----------- ---------------
Group revenue
from continuing
operations 471,823 (18,138) 453,685 399,115 849,048 (32,772) 816,276
----------- ----------- ----------- ----------- --------------- ----------- ---------------
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 Year ended
intangible intangible intangible intangible 30
assets assets assets assets September
2023 2023 2023 2022* 2022 2022 2022
Unaudited Unaudited Unaudited Unaudited Audited Audited Audited
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Analysis of
operating
profit
Engineering
Services 29,697 (845) 28,852 23,062 59,123 (8,376) 50,747
Specialist
Building 517 - 517 585 1,679 - 1,679
------------- ------------- ----------- ----------- ------------- ------------- -----------
Segment
operating
profit 30,214 (845) 29,369 23,647 60,802 (8,376) 52,426
Central
activities (1,879) (554) (2,433) (1,549) (2,029) (418) (2,447)
------------- ------------- ----------- ----------- ------------- ------------- -----------
Operating profit 28,335 (1,399) 26,936 22,098 58,773 (8,794) 49,979
Net financing
expense (614) - (614) (326) (524) - (524)
------------- ------------- ----------- ----------- ------------- ------------- -----------
Profit before
income tax 27,721 (1,399) 26,322 21,772 58,249 (8,794) 49,455
------------- ------------- ----------- ----------- ------------- ------------- -----------
* Operating profit for the six months ended 31 March 2022 is
stated after charging GBP3,561,000 of amortisation cost and
GBP335,000 aborted acquisition cost (see Note 3).
3 Exceptional items and amortisation of intangible assets
Six months ended Year ended
31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Aborted acquisition costs/acquisition costs 554 335 418
Total charges arising from exceptional items 554 335 418
Amortisation of intangible assets 2,999 3,561 7,123
Goodwill remeasurement (2,154) - -
Impairment of intangible asset - - 1,253
---------- ---------- -------------
Total exceptional items and amortisation charge before income tax 1,399 3,896 8,794
Taxation credit on exceptional items and amortisation (657) (890) (1,782)
---------- ---------- -------------
Total exceptional items and amortisation charge 742 3,006 7,012
---------- ---------- -------------
During the period the Company incurred GBP554,000 of costs
acquiring Enisca Group Limited.
On 25 November 2022 the Company acquired the whole of the issued
share capital of Enisca Group Limited which resulted in the Group
owning 100% of Enisca Browne Limited. Under IFRS 3 this is treated
as a step acquisition where the previous held equity interest is
remeasured at its acquisition date fair value with the resulting
gain recognised in the income statement.
GBP000
Remeasured value 3,556
Less equity interest (previously included in Investments in
joint ventures) (1,402)
--------
Goodwill remeasurement 2,154
--------
4 Loss for the period from discontinued operations
Six months ended Year ended
31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Revenue - - -
Expenses (920) (1,103) (2,242)
---------- ---------- -------------
Loss before income tax (920) (1,103) (2,242)
Income tax charge - - -
---------- ---------- -------------
Loss for the period from discontinued
operations (920) (1,103) (2,242)
---------- ---------- -------------
The Group has increased accruals as a result of the settlement
of Allenbuild Limited historic claims during the period and an
internal reassessment of the likely costs required to settle other
known contractual disputes.
5 Income tax expense
Six months ended Year ended
31 March 30 September
2023 2022 2022
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Current tax:
UK corporation tax on profit
for the period (4,676) (3,566) (10,692)
Adjustments in respect of previous
periods - - (193)
---------- ---------- -------------
Total current tax (4,676) (3,566) (10,885)
Deferred tax (763) (592) 1,337
---------- ---------- -------------
Income tax expense (5,439) (4,158) (9,548)
---------- ---------- -------------
6 Earnings per share
Six months ended 31 March Year ended 30 September
2023 2022 2022
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 21,625 27.41 27.33 20,620 26.19 26.02 46,919 59.52 59.30
Exceptional
items and
amortisation (742) (0.94) (0.94) (3,006) (3.82) (3.79) (7,012) (8.89) (8.87)
--------- ---------- ------- ---------- ------------ --------- ------ ----------- -------------------- ---------
Basic
earnings
per share
- continuing
activities 20,883 26.47 26.39 17,614 22.37 22.23 39,907 50.63 50.43
Loss for
the period
from
discontinued
activities (920) (1.16) (1.16) (1,103) (1.40) (1.39) (2,242) (2.85) (2.83)
--------- ---------- ------- ---------- ------------ --------- ------ ----------- -------------------- ---------
Basic
earnings
per share 19,963 25.31 25.23 16,511 20.97 20.84 37,665 47.78 47.60
--------- ---------- ------- ---------- ------------ --------- ------ ----------- -------------------- ---------
Weighted
average
number
of shares 78,888 79,130 78,727 79,234 78,825 79,125
---------- ------- ------------ --------- -------------------- ---------
The dilutive effect of share options is to increase the number
of shares by 242,160 (March 2022: 507,000; September 2022: 299,750)
and reduce the basic earnings per share by 0.08p (March 2022:
0.13p; September 2022: 0.18p).
7 Dividends
The proposed interim dividend is 6.00p (2022: 5.67p) per share.
This will be paid out of the Company's available distributable
reserves to shareholders on the register on 9 June 2023, payable on
12 July 2023. The ex-dividend date will be 8 June 2023. 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 Acquisition of subsidiary undertaking - Enisca Group Limited
On 25 November 2022 the Company acquired the whole of the issued
share capital of Enisca Group Limited ("Enisca") for a cash
consideration of GBP14.6m together with a GBP3.6m IFRS 3 step
remeasurement of the 50% Enisca Browne Limited joint venture
originally acquired with J Browne Group Limited (now 100% owned by
the Group). The net acquisition cost was funded by a combination of
cash and the Group's existing revolving credit facility provided by
HSBC Bank plc, National Westminster Bank plc and Lloyds Bank
plc.
The provisional value of the assets and liabilities of Enisca at
the date of acquisition were:
Book value Adjustments Fair value
GBP000 GBP000 GBP000
Non-current assets
Intangible assets -
goodwill 1,805 8,555 10,360
- other - 11,330 11,330
Property, plant and
equipment 496 - 496
Right of use assets - 501 501
Investment in joint
ventures 66 (66) -
2,367 20,320 22,687
----------------- ------------------ ----------------
Current assets
Inventories 208 - 208
Trade and other receivables 7,411 - 7,411
Cash and cash equivalents 1,264 - 1,264
8,883 - 8,883
----------------- ------------------ ----------------
Total assets 11,250 20,320 31,570
----------------- ------------------ ----------------
Non-current liabilities
Lease liabilities - (403) (403)
Deferred tax liabilities - (2,833) (2,833)
- (3,236) (3,236)
----------------- ------------------ ----------------
Current liabilities
Trade and other payables (9,735) - (9,735)
Lease liabilities (23) (98) (121)
Current tax liability (324) - (324)
(10,082) (98) (10,180)
----------------- ------------------ ----------------
Total liabilities (10,082) (3,334) (13,416)
----------------- ------------------ ----------------
Net assets 1,168 16,986 18,154
----------------- ------------------ ----------------
Goodwill of GBP10,360,000 arose on acquisition and is attributed to the expertise and workforce of
the acquired
business. Other intangible assets provisionally valued at GBP11,330,000, which represent customer
relationships
and contractual rights, were also acquired and will be amortised over their useful economic lives
in accordance
with IAS 38. Deferred tax has been provided on this amount. Amortisation of this intangible asset
commenced
from December 2022.
Right of use assets and obligations under finance leases
Enisca'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 "Leases".
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.
[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 2022 Annual Report &
Accounts.
[2] HM Treasury, Autumn Statement 2022 - November 2022
[3] Press statement by The RT Hon Grant Shapps MP, Shapps sets
out plans drive multi billion pound investment in energy
revolution, (2023). [online] Available at:
https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution
[4] HM Treasury, Autumn Statement 2022 - November 2022
[5] 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 2022 Annual Report &
Accounts.
[6] UK Government Department for Transport Policy paper,
Railways Act 2005 statement of funds available 2022 - 1 December
2022
[7] Smith, K. (2023) 'Britain outlines GBP44bn maintenance and
renewals spending plan for 2024-2029', International Rail Journal.
Available at:
https://www.railjournal.com/financial/britain-outlines-44bn-maintenance-and-renewals-plan-for-2024-2029/
[8] UK Government Department for Transport, Planning ahead for
the Strategic Road Network - December 2021
[9] Knott, J. (2023) 'Very limited budget for new road projects,
senior civil servant says', Construction News. Available at:
https://www.constructionnews.co.uk/civils/very-limited-budget-for-new-road-projects-senior-civil-servant-says-02-02-2023/
[10] UK Government Department for Digital, Culture, Media &
Sport, Future Telecoms Infrastructure Review - 23 July 2018
[11] UK Government Nuclear Decommissioning Authority, Nuclear
Provision: the cost of cleaning up Britain's historic nuclear sites
- 4 July 2019
[12] UK Government Corporate report, The Programme and Project
Partners Supply Chain Strategy - 14 September 2021
[13] Press statement by The RT Hon Grant Shapps MP, Shapps sets
out plans drive multi billion pound investment in energy
revolution, (2023). [online] Available at:
https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution
[14] Press statement by The RT Hon Grant Shapps MP, Shapps sets
out plans drive multi billion pound investment in energy
revolution, (2023). [online] Available at:
https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution
[15] UK Government Policy paper, Taking Charge: the electric
vehicle infrastructure strategy - March 2022
[16] Press statement by The RT Hon Grant Shapps MP, Shapps sets
out plans drive multi billion pound investment in energy
revolution, (2023). [online] Available at:
https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution
[17] Ofwat PR19 final determinations, Overview of companies'
final determinations - December 2019
[18] Russell, J. 2023. Balancing investment leading up to AMP8,
and beyond . Wastewater 2023 Conference, 25 January, London.
[19] Russell, J. 2023. Balancing investment leading up to AMP8,
and beyond . Wastewater 2023 Conference, 25 January, London.
[20] Lovell, A. 2023. EA Chair says collaboration needed to
protect local economies and nature on the coast. Annual Coastal
Futures Conference, 26 January, London.
[21] Lovell, A. 2023. EA Chair says collaboration needed to
protect local economies and nature on the coast. Annual Coastal
Futures Conference, 26 January, London.
[22] HM Treasury, Autumn Statement 2022 - November 2022
[23] Press statement by The RT Hon Grant Shapps MP, Shapps sets
out plans drive multi billion pound investment in energy
revolution, (2023). [online] Available at:
https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution
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