13 May 2025

Renew Holdings plc

("Renew" or the "Group" or the "Company")

Half-year Report

Strategic progress delivered and first half performance in line with expectations positioning the Group well for future growth

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 2025 ("the period").

Financial Highlights

Operational Highlights

Current Trading & Outlook

Paul Scott, CEO of Renew, commented:  

"The Group has delivered a financial performance in line with revised expectations. To have achieved this, despite unprecedented delay and deferment within certain Rail renewals programmes, serves to demonstrate the resilient and increasingly diverse nature of our business model.

"The past six months has been a transformational period for the business as we successfully executed against our strategy of securing routes to new growth markets and focusing our activities exclusively on Engineering Services. I am pleased to welcome Full Circle to the Group which operates in the exciting, fast growing, Renewable Energy sector. Our increasingly diverse portfolio across our four pureplay engineering sectors and the increasingly impactful collaboration between our brands further enhances the resilience of our model.

"Renew's foundations have never been stronger in terms of the breadth of our service offering, our secured new and existing frameworks and our corresponding record order book. As we enter the second half of the year, we are well placed to deliver on our ambitious long term growth strategy. As a result, the Group remains confident in its ability to deliver against revised full year expectations, which are ahead of the prior year.

"On behalf of the Board, I extend my sincere gratitude to all our teams for their hard work, commitment, and professionalism in delivering excellent service for all our clients."

For further information, please contact:

Renew HY25 Results

Chief Executive Officer's Review

Strategic progress and diversified end market exposure underpins first half performance

The Group has delivered a financial performance for the first six months of the financial year in line with its revised expectations. To have achieved this, despite unprecedented delay and deferment within certain Rail renewals programmes, serves to demonstrate the resilient and diverse nature of our business model.

In the last twelve months, we successfully executed a number of strategic objectives including the disposal of Walter Lilly (October 2024) and the acquisitions of Excalon (June 2024) and Full Circle (October 2024), marking a transformational period for our business. As a result, we are now a pureplay engineering services business with access to new, attractive, complementary and high-growth sectors within the renewables and electricity distribution and transmission markets.

During the period, we have also achieved a number of milestone successes across our business divisions and we remain uniquely positioned to capitalise on the significant growth opportunities in each of our end markets, underpinned by the mission-critical nature of our services.

As announced in January 2025, the Rail sector has seen a slower than expected start to the new control period (CP7), which began in April 2024. However, despite the deferment of a number of renewals programmes, we are seeing increasing demand for reactive and planned maintenance services and we continue to trade in line with our revised expectations. Network Rail remains committed to its £45.4 billion CP7 investment, reflecting a 10% increase from the previous control period. Within our Rail addressable market, which grew 9% to £31.9 billion, key framework wins have positioned us more strongly than ever as we entered this latest control period. Whilst we remain cautious, we were pleased with recent press commentary from our principal client¹,  reiterating its commitment to investment in renewal programmes, with the second year of the funding cycle expected to be significantly smoother. Our business continues to provide coverage across all five of Network Rail's devolved regions and we remain focused on further strengthening our position as a trusted partner to the network for the duration of this control cycle and beyond.

In Environmental, activity levels in Water remain ahead of expectations. The AMP7 control period cycle was incredibly successful for Renew and we have entered AMP8, which commenced in April 2025, in our strongest position yet. With 94% growth in our total addressable market to £45 billion, we now hold frameworks with 13 UK water companies, including with 10 of the 12 largest combined waste and water firms - an impressive increase from 3 at the start of AMP7. This milestone reflects the breadth and depth of our offering, alongside the dedication of our teams in securing these new opportunities, and we look forward to continuing to build on these solid foundations as we capitalise on the significant growth opportunities available to us in this sector.

In Energy, during October 2024, we completed the acquisition of Full Circle, a leading provider of repair, maintenance, and monitoring services for onshore wind turbines across the UK and Europe. The business is integrating well and significantly strengthens Renew's position in the growing renewable energy market. In June 2024 we acquired Excalon Limited which saw the Group enter the UK Electricity Distribution market, a new complementary sector with high barriers to entry and resilient attributes. I am pleased to report that the integration process is now complete and the business is performing in line with expectations. There are a number of exciting opportunities for our civil nuclear business and we are committed to leveraging our multidisciplinary expertise to adapt to the evolving needs of our clients as they respond to meet the UK's ambitious net zero targets as well as the requirement to safely decommission our legacy nuclear assets. Our strategy to enter new verticals and diversify our routes to market has been extremely successful and, with a total annual addressable market of c.£9.2 billion, we see significant opportunity for growth across the Energy division to build on our current solid foundation of 28 frameworks.

In infrastructure, our Highways sector continues to make strong progress and the UK's ageing network of roads and bridges means the renewals and capital maintenance of this critical infrastructure has never been more important. As such, the budget for the Strategic Roads Network in the next Roads Investment Strategy (RIS3) funding cycle is expected to be significantly greater than that of RIS2 (£4.3bn), which evidently plays to our core strengths as a Group. Additionally, the ongoing momentum in both Communication Networks and Aviation serves to demonstrates the Group's ability to adapt to evolving critical infrastructure needs, ensuring strong levels of demand remain across all our services.

The performance delivered during the period is as a result of the outstanding work of all our colleagues, whose dedication and expertise remain integral to the Group's long-term success. On behalf of the Board, I extend my sincere gratitude to all our teams for their hard work, commitment, and professionalism in delivering excellent service for our clients.

With a record order book, and bolstered by our diversified and resilient business model, the Group is confident in its ability to navigate current macroeconomic headwinds and deliver against full year expectations, with operating profit expected to be ahead of the prior year (2024: £70.9m). We have entered the second half of the financial year in a strong position with established positions in our core markets and the visibility afforded by committed regulatory spending cycles which continue to give confidence in our future success.

Our strong track record of resilient growth through the economic cycle is testament to the Group's market leading capabilities, entrepreneurial drive and well established reputation as a high-quality provider of mission-critical services in long-term, sustainable growth sectors.

Over the past five years*, we have delivered:

·      Group organic revenue growth of 51 per cent and total revenue growth of 76 per cent;

·      adjusted earnings per share growth of 63 per cent;

·      an increase in dividends of 65 per cent from 11.5p to 19p per share;

·      an increase in our adjusted operating margin from 6.4 per cent to 6.7 per cent; and

·      seven strategic acquisitions supported largely by our strong free cash flow, deploying £124m.

*Five years to 30 September 2024

Results overview

During the period, Group revenue increased 13% to £569.3m (HY24: £505.4m). The adjusted operating profit was £32.0m (HY24: £32.3m) with an adjusted operating margin of 5.6% (HY24: 6.4%).

As at 31 March 2025, the Group had pre-IFRS16 net debt of £11.8m (31 March 2024: Net cash £42.5m). The Group's order book at 31 March 2025 had strengthened to £908m (HY24: £898m) underpinned by long-term framework positions.

Dividend

The Group's resilient trading performance, cash position and record forward order book have consistently allowed the Group to pursue its progressive dividend policy. The Board has declared an interim dividend of 6.67p (HY24: 6.33p) per share, representing an increase of 5%. This will be paid on 9 July 2025 to shareholders on the register as at 6 June 2025, with an ex-dividend date of 5 June 2025.

Rail

As announced on 24 January 2025, we have experienced challenges moving through the initial stages of CP7, with the complex transition to the current control period and macroeconomic headwinds resulting in slower than anticipated programme mobilisations in specific areas of their national programme.

The impact on Renew:

Mitigatory measures:

Sector highlights:

In summary, our long term trust and performance-based relationship with our clients, alongside our unrivalled national framework coverage and industry-leading delivery, positions us well to navigate the current challenges and capitalise when market conditions improve. We continue to work closely with our Rail clients as they focus on delivering their regulatory commitments. 

Infrastructure

Highways

The maintenance of the UK's strategic highways network has never been more important. By the end of 2025, 70% of National Highway's network of roads and bridges will be more than 45 years old² and as such, the prioritisation of renewing the network's structures, rigid pavements and lighting & technology is essential. As confirmed in the 2024 Autumn Budget, an interim 12-month funding settlement, which began in April 2025, was allocated to bridge the gap between the previous cycle and the start of the RIS3 period. This has allowed RIS3 to be considered as part of the multi-year Spending Review, which was delayed due to the 2024 General Election. The interim year will therefore be followed by the 5-year funding deal for RIS3, commencing in April 2026, and as part of their recent announcement, the Department for Transport preparatory consultations have indicated that the spending will be increasingly focussed on maintaining and renewing the existing Strategic Road Network. The budget for highways maintenance is therefore expected to be a significant increase on that of RIS2 (£4.3bn), which plays to our core strengths as a business and uniquely positioning us to deliver further growth. We expect to receive further clarity on the Government's Spending Review in H2 2025. 

Sector highlights:

Aviation

Our strategy to increase market share in Aviation has proved successful and we continue to see further growth opportunities across the sector as a growing number of the UK's major airports focus on investment programmes dedicated to renewals and asset maintenance.

Communication Networks

Once again, we have seen sustained momentum in this sector as improvements to the UK's connectivity remains of critical importance and we continue to experience strong levels of demand from all of the Multiple Network Operators (MNOs) we support. We remain well positioned to help these customers develop their networks across the UK, both increasing access to 5G services and providing additional capacity in high demand areas.

Sector highlights:

Energy

Renewables

In October 2024, we completed the £50.5m acquisition of Full Circle, a leading provider of repair, maintenance, and monitoring services for onshore wind turbines across the UK and Europe. The business is integrating well and trading in line with expectations, significantly strengthening Renew's position in the growing renewable energy market. With governments in the UK and across Europe remaining committed to achieving net zero carbon emissions by 2050³ and improving energy security, the renewable energy sector presents significant long-term growth opportunities.

Sector highlights:

Transmission & Distribution

Having acquired Excalon in June 2024, we have successfully expanded into a new complementary sector with high barriers to entry and resilient attributes. We are pleased to report that the integration process is now complete and the business is performing in line with expectations.

Sector highlights:

Nuclear

Nuclear energy is becoming an increasingly important element of the UK Government's new energy plan as it drives to meet its ambitious net zero targets. As a result, there are a number of exciting opportunities for our civil nuclear business and we are committed to leveraging our multidisciplinary expertise to maintain momentum and adapt to the evolving needs of our clients.

Sector highlights:

Environmental

Water

The AMP7 control period was incredibly successful for the Group and I am pleased to confirm that we have entered AMP8, which began post-period end on 1 April 2025, in our strongest position yet. The total addressable market for the new control period has grown by 94% to £45 billion and we now have frameworks secured for 13 of the UK's water companies, including 10 of the 12 largest combined waste and water companies, up from three at the start of AMP7. This is a significant achievement for the Group and is testament to our hard working teams that have invested significant time and dedication tendering and securing these new frameworks.

Strategic developments:

As stated previously, Thames Water's operations remain unaffected by the ongoing news headlines, and we continue to be allocated work schemes through our existing frameworks with the utility. Due to the mission critical nature of our work, operations in these maintenance and renewal frameworks will continue regardless of any refinancing or ownership changes.

Health & Safety

Ensuring the health, safety and wellbeing of our colleagues and those in the communities in which we operate has always been our highest priority and I am very pleased to report that once again our Lost Time Injury Frequency Rate (LTIFR) continues to be very low and sector leading. This performance reflects our rigorous Group-wide safety programmes that ensure we take a proactive approach to health and safety. Part of this approach centres on our increasing commitment to driving innovation and we continue to make significant advancements in this regard. Some highlights during the period included:

Sustainability

The Group remains committed to achieving net zero by no later than 2040 and the Board is pleased with the progress we've made against our quantitative sustainability targets so far, led by our Climate and Nature Steering Group. The progress delivered in the period includes:

Talent retention & attraction

The training and development of our colleagues remains essential to the Group's long-term growth and I am pleased to confirm we now have a total of 378 apprentices, trainees and graduates working across the business, an increase from 330 at 30 September 2024.

To complement the development schemes offered by our individual subsidiaries, Renew also provides a number of dedicated programmes at Group-level, designed to further support our employees as they progress on their chosen career paths. Specifically, for early careers we offer four separate programmes designed to engage emerging talent, empower these future leaders and provide specialist training in key skills, knowledge and behaviours. All of which ensures Renew remains fit for the future and is well placed to deliver long-term growth.

One of the schemes we are particularly proud of is the Women in Leadership programme which has been designed to run in parallel with all of our other development initiatives, it is open to all women across the Group and has received high levels of engagement.

Outlook

Renew's foundations have never been stronger in terms of the breadth of our service offering, our secured new and existing frameworks and our corresponding record order book. Further to this, following the successful execution of our strategy to secure routes to new growth markets, the Group now has two established brands in the exciting Renewable Energy and Electricity Transmission and Distribution sectors. Our increasingly diverse portfolio across our four pureplay engineering sectors further enhances the resilience of our model.

We have experienced transitional challenges through previous framework renewal cycles, but the ongoing trading conditions in Rail are very specific and isolated and looking ahead, we fully anticipate that the stringent regulatory drivers in this sector will compel the execution of the critical planned renewals work bank across the rail network.

We are confident our strategy, to seek out critical infrastructure support services with a disciplined approach to commercial risk and M&A, will continue to serve us well. Our growth ambitions remain focused on the pursuit of organic opportunity across all of our sectors, leveraging the strengths of our embedded relationships and our unique ability to collaborate between our brands to better serve both new and existing customers. To complement this, we have an active M&A pipeline guided by a well-established criteria and further supported by robust acquisition processes and a strong balance sheet.

Given the mission-critical nature of our services and our record order book, bolstered by our diversified and resilient business model, we remain uniquely positioned to capitalise on the significant growth opportunities in each of our end markets. As a result, the Group remains confident in its ability to navigate current headwinds and deliver against revised full year expectations.

¹https://www.constructionnews.co.uk/civils/network-rail-boss-promises-smoother-cp7-funding-flow-09-04-2025/?utm_id=3300&delivery_name=2614&utm_campaign=CONE_CN_MARKETING_WYMHM_250412&utm_content=&utm_term=READ%20NOW&utm_medium=email&utm_source=Adestra

²https://nationalhighways.co.uk/media/3v2nqsee/cre22_0102-srn-initial-report-2025-2030_vn-updated.pdf

³ HM Treasury, 'Autumn budget 2024', October 2024, HC 295 of session 2024-25, pp 77-9.

⁴ https://www.gov.uk/government/publications/clean-power-2030-action-plan/clean-power-2030-action-plan-a-new-era-of-clean-electricity-main-report

⁵https://www.nationalgrid.com/media-centre/press-releases/riio-t3-business-plan-published-framework-deliver-most-significant-step-forward-uks-transmission

⁶https://committees.parliament.uk/writtenevidence/139008/html/#:~:text=The%20UK%20continues%20to%20invest%20almost%20three,concern%20for%20Cumberland%20Council%20and%20we%20are

⁷https://www.gov.uk/government/news/shapps-sets-out-plans-to-drive-multi-billion-pound-investment-in-energy-revolution

*Operating profit for the six months ended 31 March 2024 is stated after charging £2,480,000 of amortisation cost and £151,000 of acquisition costs (see Note 3).

** The comparatives have been restated due to the classification of a component of the Group as a discontinued operation in the previous year. Please see Note 1c) Basis of preparation for further details.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

for the six months ended 31 March 2025

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 March 2025

CONDENSED CONSOLIDATED BALANCE SHEET

at 31 March 2025

CONDENSED CONSOLIDATED CASHFLOW STATEMENT

for the six months ended 31 March 2025

NOTES TO THE CONDENSED CONSOLIDATED ACCOUNTS

1      Basis of preparation

a)     The condensed consolidated interim financial report for the six months ended 31 March 2025 and the equivalent period in 2024 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 UK-adopted International Accounting Standards ("UK adopted IAS").

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 12 May 2025.

b)    The accounts for the year ended 30 September 2024 were prepared under UK-adopted International Accounting Standards 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 2024 have been audited. The comparative figures for the period ended 31 March 2024 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 2024 as described in those financial statements.

Prior year restatement - disposal of Walter Lilly              

On 4 October 2024 Walter Lilly was sold to Size Group Holdings Ltd (see Note 9). Management determined that, as a separate major line of business which met the criteria to be classified as held for sale as at 30 September 2024, Walter Lilly qualified as a discontinued operation. Under IFRS 5, the classification of Walter Lilly as a discontinued operation resulted in the requirement to separately present the totals of its result for the period and any gain or loss on remeasurement on the face of the income statement. IFRS 5 also requires that these disclosures be re-presented for prior periods presented in the financial statements. Accordingly, it was necessary to restate the comparative information as originally reported in order to present the result of Walter Lilly within discontinued operations.

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 2024.  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, 3125 Century Way, Thorpe Park, Leeds, LS15 8ZB, or via the website, www.renewholdings.com.

2      Segmental analysis

As set out in the accounting policy, the Group's operating segments have been identified at the level of the individual subsidiaries based on the information provided to the CODM. However, these operating segments are then combined to identify the externally reportable segments based on the aggregation criteria in IFRS 8. In previous years, having applied the aggregation criteria,  the Group identified two reportable segments - Engineering Services and Specialist Building. Historically the Specialist Building segment comprised Walter Lilly and Allenbuild Limited. Walter Lilly was sold on 4 October 2024 and, as a separate major line of business, was classified as a discontinued operation under IFRS 5 (see Note 1 Accounting policies prior year restatement).  Allenbuild Limited had previously been sold in October 2014.

As Walter Lilly represented the last remaining CGU in the Specialist Building segment, and was classified as a discontinued operation at September 2024, the Group now comprises a single operating segment - Engineering Services.

(a) Geographical analysis

Group revenue for all financial periods is derived from continuing activities predominantly in the UK.

All of the Group's non-current assets are deployed in the UK.

3      Exceptional items and amortisation of intangible assets

4      Loss for the period from discontinued operations

5      Income tax expense

6      Earnings per share

7      Dividends          

The proposed interim dividend is 6.67p (2024: 6.33p) per share. This will be paid out of the Company's available distributable reserves to shareholders on the register on 6 June 2025, payable on 9 July 2025.  The ex-dividend date will be 5 June 2025.  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 - Full Circle Holdings B.V.

On 7 October 2024 the Group announced that it has acquired Full Circle Group Holding B.V. ("Full Circle" or the "Company"), a specialist provider of repair, maintenance and monitoring services for onshore wind turbines in the UK and Europe for a total cash consideration of €59.0m (£49.3m), funded from the Group's existing cash resources and banking facilities (the "Acquisition"). Full Circle was controlled and owned predominantly by AtlasInvest Holding, the Belgian family holding specialised in the energy sector.

Acquisition highlights:

The provisional fair value of the assets and liabilities of Full Circle at the date of acquisition were:

Goodwill of £31,705,000 arose on acquisition and is attributable to the expertise and workforce of the acquired business.

Other intangible assets valued at £17,747,000, which represent customer relationships and contractual rights, were also acquired and will be amortised over their useful economic lives in accordance with IAS 38 and as defined within accounting policy Note 1.v  Intangible assets. Amortisation of this intangible asset commenced from October 2024. Deferred tax has been provided on this amount.

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 during the 12 months after the date of acquisition. Fair value has been calculated using Level 3 inputs as defined by IFRS 13.

The fair value of trade and other receivables was £19.7m. The gross amount of trade and other receivables was £19.7m and it is expected that the full contractual amounts will be collected.

Transaction costs of £0.2m were expensed and are included in exceptional items (please see Note 3).

9. Disposal of Walter Lilly & Co Ltd

On 4 October 2024 the Company announced the disposal of Walter Lilly & Co. Limited ("Walter Lilly") for a nominal net cash impact on a cash free/debt free basis to Size Holdings Limited ("Size") (the "Disposal"), a leading provider of premium quality construction, specialist crafts and maintenance services. Size will assume any ongoing liabilities relating to Walter Lilly. The disposal will enhance Group operating margins

The disposal saw the Group exit its only remaining Specialist Building business and is consistent with the Group's strategy of focusing activities on Specialist Engineering where it targets end markets delivering maintenance and renewals programmes that benefit from long-term, non-discretionary funding programmes.

At 30 September 2024 Walter Lilly was classified as a disposal group held for sale and as a discontinued operation. Consequently, the March 2024 comparatives have also been restated accordingly. (Please see Note 1c for details.)

The business of Walter Lilly represented the entirety of the Group's Specialist Building operating segment until 30 September 2024.  With Walter Lilly being classified as a discontinued operation, the Specialist Building segment is no longer presented in the segment note.

The results of Walter Lilly for the periods are presented below.

The major classes of assets and liabilities of Walter Lilly classified as held for sale as at 30 September 2024 are as follows:

10.  Cash and cash equivalents

Renew Holdings plc has not included finance lease liabilities within its measure of net cash due to their asset-backed nature. Therefore, whilst IFRS 16 has brought additional lease liabilities onto the balance sheet, the standard has had no effect on the Group's net debt measure, which has been calculated consistently with previous reporting periods.

IFRS 16 measurement of debt

The equivalent figures on an IFRS 16 measure would be :