Renew hopes to cash in on Britain’s net zero drive after delivering record first half

Renew upped its dividend after delivering a record performance in the first half of the year as the firm looks to cash in on Britain’s net zero transition plans,

The engineering and construction services group reported that revenue grew 17 per cent in the first half of the year. This helped pretax profit in the six months to March jump 15 per cent to £30.3m, up from £26.3m in the same period last year.

On the back of its results, Renew upped its dividend by 5.5 per cent to 6.33p, reflecting “strong trading performance, cash generation and forward order book visibility”.

“The outlook remains positive given visibility, trading momentum, new framework wins…and new bidding activity,” analysts at Peel Hunt said. “Renew remains a key sector Buy idea”.

Renew, which specialises in the maintenance of critical infrastructure said that the “strong momentum” in the first half of the year has continued so far in the second half of the year.

It suggested that longer term trends in infrastructure provided a healthy platform on which to grow in the long term.

“The critical nature of our work across non-discretionary maintenance and renewals tasks and the visibility of the highly committed and long-term spending cycles within our markets give us confidence in our continued strong growth trajectory,” the firm said.

It noted that the government plans to spend over £600bn in the next five years to meet its net zero target, with attention likely to be directed to decarbonisation of the grid, the development of nuclear power stations and scaling up homegrown power.

These tailwinds are likely to continue “regardless of the outcome of the upcoming UK general election and wider economic pressures,” Renew said.

Paul Scott, chief executive of Renew, said the firm had delivered “another record trading performance”.

“Our success in delivering sustainable growth is testament to the hard work of our dedicated colleagues and the resilient and differentiated nature of our high-quality, low-risk business model as well as the mission-critical nature of our work,” he said.