In its full-year results on Tuesday, the AIM-listed company reported that revenues rose by 11% to £601mlm in the year to end-September, thanks in part to last year’s acquisition of Scottish independent rail services provider QTS.
Profit before tax almost doubled to £27mln.
The company said this was led by growth in its engineering services division, which was bolstered by QTS’s existing links with Network Rail, which allowed it to win all the contracts it tendered for with the rail provider.
Renew also noted that it has a “strong order book” underpinning its future prospects, growing to £581mln from £558mln a year ago, and expects to benefit from Network Rail planning to spend £48bn on its network in the next five years.
The group also lifted its full-year dividend by 10%, up to 11.5p per share.
Chairman David Forbes said that the focus remains on “markets where non-discretionary spending programmes exist to maintain critical infrastructure”, which he said have “excellent long-term prospects” due to regulatory requirements.
“Technological developments, demographic changes, historic underinvestment, climate change and legislative changes will necessitate increased infrastructure investment over a long period of time” will mean that clients will have to commit to “long-term programmes of investment” in the future, said the company.
Looking ahead, broker Liberum said it expects Renew to exit its specialist building business, were revenues halved to £36.1mln in the period, as it is a “low-margin business with fixed prices, which is therefore at risk of contract losses”.
Shares rose 5% to 401.7p in Tuesday mid-morning trading.