RE: Likely to beat expectations20 May 2024 09:06
Nice interview with the CEO at the end of this summary of the interim results, driving home the essential point that RNWH's revenues are secure and non-discretionary.
Looks like there'll be more acquisitions, likely in electricity transmission and distribution and possibly renewables:
Https://www.thebusinessdesk.com/yorkshire/news/2124054-bright-future-forecast-for-engineering-group-as-profits-and-revenues-rise
"Bright future forecast for engineering group as profits and revenues rise"
"“But I think you’ve got to drill into the detail, and understand that we have a differentiated offering to others who operate in our sector, in terms of the kind of work that we seek out. We seeking out work that is non discretionary in nature. They are essential – essential UK infrastructure, asset improvement and renewal and maintenance is what we choose to choose to do.”
Renew’s model shielded it somewhat from inflationary pressures, Scott said. Its projects were typically long term and allowed for increasing costs, and it employed people directly.
“That makes us very different, less exposed, and more commercially stable, which is why the profitability is more reliable than others operating in our sectors,” Scott said. Cost inflation did still have an impact, and Renew was consciously becoming more efficient and productive through the use of automation and innovation.
While opportunities in road and rail remained strong, Scott saw further expansion by moving into other sectors. The firm had struggled to move organically into electricity transmission and distribution, for instance. “We’re looking through our M&A activity to make some progress in that particular market sector. It has all of the ingredients that have created the success of Renew elsewhere. It’s a regulated market, you have to be skilled to operate in it, direct delivery works well in that segment, it’s very reliable, and it’s under-invested.
“And we have to do catch-up in that market if we are to get anywhere near Net Zero 2050 and our sustainability agenda. That network has to be reconfigured. So our M&A activity is looking closely at that sector and possibly renewable energy.”