Renew Holdings PLC H1 Period End Trading Update (3111I)
April 01 2020 - 2:00AM
UK Regulatory
TIDMRNWH
RNS Number : 3111I
Renew Holdings PLC
01 April 2020
Renew Holdings plc
("Renew" or the "Group")
H1 Period End Trading Update
Renew (AIM: RNWH), the Engineering Services Group supporting UK
infrastructure, announces an update on trading in advance of the
interim results for the half year ended 31 March 2020.
The Board expects the Group's trading in the first half of the
year to be in-line with market expectations. We are also pleased to
confirm that the integration of Carnell, acquired in January 2020,
is going well and its trading performance has been in line with our
expectations.
The potential impact of Covid-19 on the Group's trading
performance in the second half of the year is unclear at this
stage. We remain, where safe to do so, operational across the
majority of our sectors, but we are experiencing disruption in
certain areas. In Rail and Highways, which account for the majority
of our engineering activity, we are working closely with our public
sector customers in areas designated critical to the Covid-19
response. In both cases there is a clear commitment and ongoing
demand for our directly delivered maintenance and renewal services.
Water and Telecommunications have also been designated 'critical
sectors' and we remain operational here too, with key workers
deployed across all network areas where we have framework
contracts. Our services in civil nuclear have been disrupted with a
temporary cessation of programmes at Sellafield and Springfields
where both customers are developing plans for resumption of
critical activities that will require our involvement. In total,
approximately 80% of our activities are in areas deemed critical to
the Covid-19 response.
Cash generation in the first half of the year has continued to
be strong and the Group's net debt as at 31 March 2020 is
anticipated to be between GBP15m-GBP17m. Included in this amount is
the balance outstanding on the term loan used to fund the
acquisition of QTS which was GBP17.5m. The Group recently
re-financed its working capital facilities as part of the
acquisition of Carnell in January 2020 and now has a revolving
credit facility ("RCF") provided by HSBC & NatWest of GBP44.2m,
expiring in January 2024. In addition, the Group has a GBP10m
unsecured overdraft facility. As at 31 March 2020, we anticipate
having headroom in our available facilities of approximately GBP55m
plus a GBP15m uncommitted accordion facility on the RCF.
Since the escalation of the Covid-19 pandemic, the Board has
been focussed on taking actions to preserve cash and protect
liquidity in a way that does not compromise the long-term prospects
of the business. These include deferral of all non-essential
capital expenditure, a hiring freeze, cost reductions, deferral of
VAT payments (GBP2.6m deferred in March), utilisation of the
Government's Job Retention Scheme and a temporary 20% reduction in
the salaries of the Board and senior management from 1 April 2020.
In addition, the Board has decided to suspend payment of the
interim dividend which would ordinarily have been paid to
shareholders in July. We understand the importance of the dividend
to our shareholders and will keep our dividend policy under review
in the coming months.
The Board believe these actions to be prudent in light of the
uncertain economic outlook, notwithstanding the non-discretionary
nature of much of our work and the covenant strength of our
customers. Nevertheless, at this stage we are not able to quantify
the impact on our full year results and consequently the Board does
not believe it would be appropriate to provide forward looking
financial guidance until greater clarity returns.
Paul Scott, CEO commented:
"The health, safety and wellbeing of our people and all
stakeholders impacted by our activities remains our highest
priority. We have responded quickly and effectively to the
incredible challenges of the Covid-19 pandemic and I am immensely
proud of the reaction to this event by my colleagues and our entire
workforce who remain fully committed to our mitigation
measures.
"While we are experiencing interruption, the situation is
continuously evolving and we have many defensive qualities which
provide resilience in these unprecedented circumstances.
"Our strong trading performance in the period is reflective of
the reliable long-term nature of the UK infrastructure markets in
which we operate. We continue to work very closely with all of our
customers and where we can satisfy the requirements of Public
Health England guidance we are delivering essential network
services that the UK Government has classified as critical to the
Covid-19 response.
"Despite the unique challenges the country is currently facing,
we are well placed to play a significant role in the long- term
opportunities that will emerge for UK infrastructure services, a
sector that will play an important role in rebuilding our
economy."
Enquiries:
Renew Holdings plc Tel: 0113 281 4200
Paul Scott, CEO
Sean Wyndham-Quin, CFO
Numis Securities Limited (Nominated Adviser Tel: 020 7260 1000
& Broker)
Stuart Skinner/ Kevin Cruickshank
Walbrook PR Tel: 020 7933 8780 or renew@walbrookpr.com
Paul McManus Mob: 07980 541 893
Lianne Cawthorne Mob: 07584 391 303
Nick Rome Mob: 07748 325 236
About Renew Holdings plc
Engineering Services , which accounts for over 90% of Group
revenue and over 95% of operating profit, focuses on the key
markets of 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 High Quality Residential and
science markets in London and the Home Counties.
For more information please visit the Renew Holdings plc
website: www.renewholdings.com
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END
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