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Highlights:
Rail Sector Underperforms: Trading in the Rail sector has been impacted by a slow start to the Control Period 7 (CP7), which began in April 2024. As a result, the Group expects full-year trading to be below market expectations, although adjusted operating profit is anticipated to exceed last year’s £70.9m.
Strong Performance in Environmental Sectors: Activity levels in the Water sector are ahead of expectations, with strong momentum heading into AMP8, the next control period starting in April 2025. Renew has also secured new major frameworks with Affinity Water, bolstering its position.
Acquisition Integration and Record Order Book: Renew continues to integrate its recent acquisitions, Excalon and Full Circle, with both performing in line with expectations. The order book reached a record £905m by 31 December 2024, providing long-term visibility for the Group.
Renew (LSE:RNWH), the leading Engineering Services Group specializing in the maintenance and renewal of critical UK infrastructure, has issued a trading update ahead of its Annual General Meeting on 27 January 2025. The Group reported ongoing challenges within its Rail sector, alongside strong performance in its Environmental and Infrastructure sectors, and highlighted a robust order book.
Renew's trading update highlights a mixed performance across its divisions, with challenges in its Rail activities impacting overall expectations for the year ending 30 September 2025. Following the Group’s final results from 26 November 2024, it has been noted that the Rail sector’s performance has fallen short of management expectations due to a slower-than-expected start to Control Period 7 (CP7), which began in April 2024. This delay in activity, along with uncertainty around the timing of several renewal programmes, has led to a downward revision in the Group’s full-year forecast. Despite this, the Group anticipates that adjusted operating profit will remain ahead of the £70.9m recorded in 2024. Renew remains confident that the situation will normalise as the transition through the control period progresses.
Environmental Sector Boosts Growth
In contrast, Renew’s Environmental division is experiencing stronger-than-expected performance, particularly in the Water sector. The Group is poised for continued growth as it prepares for the new AMP8 control period, which begins in April 2025. Notably, Renew was awarded two major five-year frameworks by Affinity Water, strengthening its position as it transitions into the new regulatory period. Additionally, performance in the Group’s Energy and Infrastructure sectors remains on track, with forecasts in line with management expectations.
Acquisitions and Strategic Growth
The integration of Excalon and Full Circle, two acquisitions made by Renew, is progressing smoothly, with both businesses expected to meet full-year trading expectations. As part of its strategy for continued growth, Renew is actively reviewing an acquisition pipeline, looking for opportunities to expand its capabilities further.
Strong Order Book and Long-Term Visibility
Renew’s order book has reached a record £905m as of 31 December 2024, up from £795m in the same period last year.
