Renew Holdings Regulatory News (RNWH)

Renew Holdings plc

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

Final Results

Renew (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces results for the year ended 30 September 2019, another record set of results, achieving both growth in revenue and operating profit during the year, in part reflecting a full year's contribution of QTS, acquired in May 2018.

Financial Highlights

1 Renew uses a range of statutory performance measures and alternative performance measures when reviewing the performance of the Group against its strategy. Definitions of the alternative performance measures, and a reconciliation to statutory performance measures, are included in note 8.

Operational Highlights

·; Engineering Services revenue1 grew 21 per cent to £564.5m (2018: £466.5m)

·; Engineering Services adjusted operating profit1 increasing by 21 per cent to £39.4m (2018: £32.5m)

- Performance reflects full contribution from QTS and strong momentum at the end of rail CP5, which contributed towards organic growth of 8 per cent

·; Increase in Engineering Services order book1 to £542m (2018: £510m)

·; Activity levels in first year of CP6 are in-line with management forecasts, with momentum growing as expected

·; Net debt1 at the year-end was reduced in-line with expectations to £10.2m (2018: net debt £21.4m)

- Reflecting reliable cash generation and conservative approach to gearing

David M Forbes, Chairman said: "The Group's focus remains on those markets where non-discretionary spending programmes exist to maintain critical infrastructure. These markets have excellent long-term prospects with growth driven by regulatory requirements. The Group has strengthened its position in markets which benefit from visible funding. Our multidisciplinary engineering services are closely aligned with the requirements of the sustained investment in these markets which provides the Board with confidence in future growth."

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

About Renew Holdings plc

Engineering Services, which accounts for over 90 per cent of Group revenue and over 95 per cent 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 market in London and the Home Counties.

For more information please visit the Renew Holdings plc website: www.renewholdings.com

Our differentiated business model:

Chairman's Statement

Introduction

I am pleased to report Renew has delivered a record set of results, achieving growth in both Group revenue1 and adjusted operating profit1 during the year. We have had another successful year winning new and renewing existing frameworks in our target markets. Renew provides engineering services to critical UK networks in the Infrastructure, Energy and Environmental markets. The Group continues to develop its position within its chosen infrastructure markets which benefit from ongoing spending on essential asset maintenance and renewals. These markets are underpinned by regulatory requirements and, as such, benefit from long-term visible cycles of investment.

Group revenue1 increased to £600.6m (2018: £541.5m) with adjusted operating profit1 increasing 23 per cent to £38.3m (2018: £31.1m). Statutory operating profit was £27.5m (2018: £15.5m). The adjusted EPS1 was 40.43p (2018: 35.48p). The Group is pleased to report a reduction of its net debt1 in line with our expectations to £10.2m (2018: £21.4m).

Governance

The Board believes a strong corporate governance framework remains key to ensuring we continue to deliver value for all our stakeholders. The Board is responsible for ensuring effective corporate governance is applied throughout the Group and all of its activities and it will continue to work towards further improving its governance framework during 2020. The Group continues to comply with the QCA Corporate Governance Code 2018 and more details can be found in the Corporate Governance section of the Group's website.

Risk management

The Executive Directors provide regular updates to the Board on the principal risks and controls across the Group, including the roles and responsibilities of key management in mitigating those risks. This process also facilitates the embedding and monitoring of the Board's agreed risk management protocols within the business, ensuring controls are implemented effectively.

The Group keeps its principal risks under continuous review and ensures those identified risks are being effectively managed.

Corporate culture and ethics

The Board continuously monitors and promotes its corporate culture throughout the year led by its senior management team who are key to communicating our shared values. The Group strives to act responsibly in all aspects of the work we undertake, an approach which is underpinned by our embedded core values. We aim to be considerate, inclusive and respectful in the way we employ and develop our workforce.

Board effectiveness

The Nomination Committee reviewed the Board's structure and composition during 2019 to ensure it continues to have an appropriate balance of skills and experience to deliver the Group's strategy. The current members of the Board bring an appropriate range of expertise on issues of performance, strategy and governance, which are vital to the success of the Group. The Directors also recognise the broad benefits of ethnic and gender diversity when considering Board composition. The Board has also made a number of changes to the Group's Committees during the year which have focused on improving efficiency and procedural approach.

Delivering long-term value for shareholders

We have consistently delivered value to shareholders through our established and proven strategy, aiming to provide reliable capital growth alongside a progressive dividend policy. We regularly review market trends, business operations and the key objectives of our subsidiary businesses to ensure they support the Group's overall strategic objectives. The Group targets growth both organically and through earnings enhancing acquisitions to broaden our service offering to our wide range of clients.

The Group is supported through its key resources and relationships. Effective relationships with our employees, customers, suppliers, shareholders and wider stakeholders is critical to the continued success of our business.

Dividend and Capital Allocation Policy

For each of the last seven years, the Group has consistently grown the dividend and we are pleased to report we will do so again this year. The Board proposes a final dividend of 7.67p per share (2018: 6.67p) to be paid on 6 March 2020 to shareholders on the register as at 31 January 2020. The ex-dividend date will be 30 January 2020. This will represent a full year dividend of 11.5p per share (2018: 10.0p) reflecting our confidence in the Group's future prospects.

The Group has a Capital Allocation Policy which supports the effective delivery of our strategic priorities. This includes maintaining a conservative level of debt which ensures we have the ability to make acquisitions in line with our strategy.

Board Changes

On the 8 February 2019, Renew was pleased to announce the appointment of Shatish Dasani as a Non-executive Director and Chairman of the Audit Committee succeeding John Bishop who retired from the Board at the same time. Shatish is a Chartered Accountant with over 20 years' experience in senior public company finance roles across various sectors including building materials, advanced electronics, general industrial and business services. The Board would like to thank John for the valuable contribution he has made to the Group since his appointment in 2006.

Our current priority is to develop further diversity on the board. Specifically, we are actively focussed on improving gender diversity. The Directors expect to be able to announce progress in this area at the Group's Annual General Meeting in January.

People

The Board would like to thank all employees for their important contribution to the continued success of the Group and wider stakeholders for their ongoing support.

Future focus

The Board is committed to the continued achievement of shareholder value through the delivery of its strategic priorities alongside a strong corporate governance framework. The Group will continue to develop its culture, where our core values underpin delivery of sustainable economic, social and environmental value.

Growth is driven both organically and through strategic earnings enhancing acquisitions. The Group's focus remains on those markets where non-discretionary spending programmes exist to maintain critical infrastructure. These markets have excellent long-term prospects with growth driven by regulatory requirements. The Group has strengthened its position in markets which benefit from visible funding. Our multidisciplinary engineering services are closely aligned with the requirements of the sustained investment in these markets which provides the Board with confidence in future growth.

David M Forbes

Chairman

26 November 2019

1 Renew uses a range of statutory performance measures and alternative performance measures when reviewing the performance of the Group against its strategy. Definitions of the alternative performance measures, and a reconciliation to statutory performance measures, are included in note 8.

Chief Executive's Review

The Group has made excellent progress in delivering its strategic priorities including the successful appointment to key frameworks in the Infrastructure, Energy and Environmental markets. These frameworks strengthen the Group's position with clients responsible for maintaining and renewing critical UK infrastructure networks.

Our success is underpinned by a differentiated business model, with a number of defensive characteristics that deliver reliability and a competitive advantage, which is particularly relevant in the current economic and political climate.

As a specialist engineering services provider, we focus on directly delivering non-discretionary maintenance and renewals tasks, which means that our average task size is comparatively small and that the Group is not exposed to the financial and contractual risks facing those businesses that deliver large enhancement schemes. This results in a fundamentally lower risk profile, as demonstrated by our stable track record of revenue growth, profitability and cash generation. Working in complex and challenging environments, our highly skilled, directly employed workforce ensures our delivery is safe and responsive, as well as reducing our exposure to supply chain price volatility.

We operate in the Infrastructure, Energy and Environmental markets which benefit from committed funding on nondiscretionary long-term maintenance and renewal programmes. These sectors have significant barriers to entry because they are highly regulated, making them resilient and providing reliable, long-term earnings opportunities.

Results

The Group has seen record trading in the period, in part reflecting a full year's contribution of QTS, a specialist rail services provider acquired in May 2018, which has continued to perform strongly. Group revenue1 increased to £600.6m (2018: £541.5m) with adjusted operating profit1 up 23 per cent to £38.3m (2018: £31.1m) delivering an adjusted operating margin1 of 6.4 per cent (2018: 5.7 per cent). Net debt1 at the year end was £10.2m (2018: £21.4m) reflecting our reliable cash generation and conservative approach to gearing.

The Group's strong financial position is demonstrated by our low and falling net debt position and our excellent profitability. Our long-term track record of reliable revenue growth and cash generation has resulted in our ability to deliver earnings growth and to consistently meet our own and the market's expectations.

The Group continues to have a strong order book1, underpinning our future prospects, and at 30 September 2019 it grew to £581m (2018: £558m).

Engineering Services

Engineering Services is the key driver of growth for the Group, and accounts for over 90 per cent of Group revenue1 and over 95 per cent of adjusted operating profit1. Engineering Services revenue1 grew 21 per cent to £564.5m (2018: £466.5m) with adjusted operating profit1 also increasing by 21 per cent to £39.4m (2018: £32.5m) maintaining the operating margin1 at 7.0 per cent (2018: 7.0 per cent). The excellent revenue performance in Engineering Services was a reflection of the impact of QTS as well as strong momentum at the end of the rail Control Period 5 ("CP5") which contributed towards organic growth of 8 per cent. In rail, we have commenced operations in the first year of the new control period ("CP6") where we are pleased to report that activity levels are in line with our forecasts and momentum is growing as expected. At 30 September 2019, the Engineering Services order book1 grew to £542m (2018: £510m).

Infrastructure

The UK rail network will play an essential role in the country's economic success. Over the current five-year investment cycle, Control Period 6 ("CP6") which runs to 2024, Network Rail will spend £48bn on the network including a c.25 per cent increase in spending on operations, maintenance, support and renewals activities2 increasing the Group's addressable market opportunities from Control Period 5 ("CP5").

As a major provider of infrastructure services to Network Rail nationally, we support its day-to-day operations by providing a high volume of essential, non-discretionary asset maintenance activities through our long-term frameworks. During the year we were awarded the Minor Signaling Framework's in the Scotland, South East and Wales regions in addition to our existing CP6 frameworks where we directly deliver civils asset management, fencing, devegetation and drainage.

We have significantly strengthened our relationship with Network Rail during the year, securing all the CP6 renewals frameworks that we tendered for, including the Multidisciplinary Renewals and Geotechnical & Earthworks five year frameworks in the Scotland North East region. In addition, we continue to work on Electrification and Plant, Slab Track, Station Information & Security Systems as well as Telecoms frameworks nationally across the network.

Since the period end, we have secured new positions on the CP6 Wales and Western Renewals Frameworks across all five lots, delivering a programme of engineering services to assets including bridges, embankments, tunnels and shafts as well as the delivery of signaling, power and communications schemes.

We have a 24/7 emergency support provision which, during the period, included clearing and securing large sections of the embankments at Arrochar in Scotland to enable the reopening of the West Highland Line following a major landslip and at Ecclefechan on the West Coast Main Line.

For London Underground we deliver specialist electrical, plant and power schemes through five framework agreements. We were also awarded a number of depot control system and major depot refurbishment schemes in the period. During the year we have also been awarded a place on Merseyrail's Principal Contractor's 3-year framework and we continue to work on the Transport for Wales STRIDE framework.

In the wireless telecoms market an estimated £22bn will be invested in the roll-out of 5G across the UK to meet increasing demand for internet access. All four major telecoms network providers have announced plans to launch 5G as part of a roll-out of wireless infrastructure across the UK with further investment programmes expected to follow targeting widespread UK coverage by 2023. We continue to see a significant increase in work on Telefonica's frameworks in London, the South East and the North East of England. We also secured a new framework for MBNL to deliver EE's 5G roll-out and continued to deliver emergency reactive works for our clients throughout the year.

Energy

The UK Government's nuclear decommissioning provision is currently estimated at c.£124bn3. The Nuclear Decommissioning Authority spends around £3bn4 per annum on its 17 nuclear licensed sites across the UK, the largest of which is the Sellafield site in Cumbria which is forecast to be allocated around 75 per cent of the total decommissioning provision.

At Sellafield the focus has shifted away from reprocessing nuclear fuel to broader decommissioning activities including high hazard retrievals and risk reduction activities. Our range of multidisciplinary engineering services support these activities through established, long-term framework agreements for decontamination, decommissioning and waste management. During the year the largest of these frameworks, the Decommissioning Delivery Partnership, was extended to 2026. This programme delivers work across Sellafield and is associated with some of the most hazardous areas at the site including waste retrieval from legacy storage ponds and silos. We also continue to work on the SR&DP Asset Care, Magnox Swarf Storage Silo, Bundling Spares and the Tanks and Vessels Frameworks as well as providing support to numerous ongoing major projects.

In line with the Group's strategy to broaden its nuclear service offering, our clients include EDF in association with Westinghouse on Sizewell 'B' where we are assisting with the control and data acquisition system upgrade to extend the life of the pressurised water reactor. We also continue to work for BAE Systems providing engineering support to the nuclear submarine programme as well as for Westinghouse at Springfields and for Low Level Waste Repository and Magnox. During the year we were also appointed to a major decommissioning services framework for new client, Dounreay Site Restoration Limited, for a term of up to seven years.

New nuclear will play an important role in the government's objective of delivering sustainable and low-carbon energy. Working at Hinkley Point 'C', during the period, we have supplied and installed high integrity manufactured components to the site and we continue to selectively target opportunities where our specialist capabilities are well suited to major future demand.

We continue to deliver long-term engineering maintenance services at a number of the UK's thermal power stations including at Drax Power Station where we deliver electrical maintenance services on a four year framework.

Environmental

In Water, spending on the latest five-year investment cycle (AMP7) is estimated to increase to c.£50bn5 as demand continues to be driven by population growth, ageing infrastructure and environmental considerations. We provide a range of engineering services to support the renewal and maintenance of water infrastructure assets including those on clean and wastewater networks, flood alleviation and coastal protection systems. These renewal programmes require sustained long-term investment through our clients' operational expenditure budgets.

For Dŵr Cymru Welsh Water, we operate on the Pressurised Pipelines Framework, Major Civils Framework and the Capital Delivery Alliance Civils contracts across the region. In addition to ongoing maintenance and renewals tasks, we provide 24/7 emergency reactive works on the water network. As an approved dam safety contractor we work on critical infrastructure at reservoirs including Talybont and Llanishen, in Cardiff.

Wessex Water's planned £1.4bn AMP7 investment6 is focused on delivering improvements to clean water and sewerage systems and we continue to work on the current AMP6 Civils & EMI Delivery Partners Framework.

In line with a key strategic objective we continue to broaden our customer base securing long-term frameworks with new water clients.

For Bristol Water, we were recently appointed to the £75m AMP7 network partnership programme, as the exclusive provider for mains renovation works across the region for the next five years. In addition to this new framework, we have been appointed to deliver a number of significant mains rehabilitation schemes.

For Yorkshire Water we secured both lots on the £290m AMP7 Minor Civils Framework which will see us carry out engineering works to existing assets on operational treatment and distribution facilities for the next five years.

The Environment Agency ("EA") will have invested approximately £2.6bn in flood and coastal erosion risk management projects in the five years to 2021 and estimates that an increase in average annual investment to around £1bn will be necessary each year to 2065 to sufficiently mitigate flooding risk in the UK7. We continue our long association with the EA delivering these important maintenance and improvement works to environmental assets nationally through the Flood and Coastal Risk Management programme where we have framework positions in the North, Central, South West and South East regions over the next four years. The Group also secured a further extension to the EA's Northern Mechanical, Electrical, Instrumentation, Control, and Automation Framework ("MEICA") as well as being on the South East MEICA Projects Framework. 

For the Canal and River Trust, we continue to maintain the trust's waterway assets across England and Wales through a seven year MEICA Framework.

In land remediation, we continue to see long-term demand for brownfield regeneration and during the year we undertook a number of complex remediation schemes for Harworth Estates as well as delivering land regeneration services for National Grid and Scotia Gas Networks on the sites of former gasworks through national framework agreements.

We also continue to be involved with a number of phases of work at the Palace of Westminster including specialist restoration activities on the Cast Iron Roof Restoration Framework and structural repair works to the Elizabeth Tower. We continue to see long-term opportunities at this UNESCO World Heritage site which is due to undergo further major renovation programmes over the next decade.

Specialist Building

We specialise in the high quality residential market in London and the Home Counties and during the year we have been successfully awarded a number of new projects. In the science sector, where we have a number of existing frameworks, the Group has been awarded a significant contract for a repeat client post period end. The Group continues to be selective in these markets where we have a long-established track record.

Revenue in Specialist Building reduced to £36.1m (2018: £74.2m), in line with our expectations and reflecting our continued focus on contract selectivity and risk management. This is demonstrated by an increased operating profit of £0.9m (2018: £0.8m) at an operating margin of 2.4 per cent (2018: 1.5 per cent). At the year end, the forward order book was £39m (2018: £48m).

New and emerging markets

As part of the Group's growth strategy, we continue to seek opportunities in new regulated markets that exhibit characteristics and programmes of infrastructure maintenance and renewal spending which align with the Group's established and proven capabilities. Our initial focus is on highway structures and technology as well as power infrastructure. In highways, the Government announced a £25bn investment in the Road Investment Strategy 28 while investment in the electricity network during RII0-1 is expected to be c.£37bn and focus on improving existing power assets9. Entering these markets is part of our long-term strategic plan and we will provide updates when appropriate.

Health, safety and the environment

We continue to make health and safety a priority, ensuring safe working practices for the Group's employees, those who work with us and our wider stakeholders. The Group is pleased to report further improvement in its health and safety performance during the year.

The Group is committed to operating in a sustainable and ethical manner and we work hard to

leave a lasting positive impact with everything we do. The Group has recently been awarded the London Stock Exchange's Green Economy Mark, which recognises companies that contribute to positive environmental outcomes.

Outlook

Renew continues to directly deliver non-discretionary engineering support services to the UK's critical infrastructure networks through its highly skilled workforce. Technological developments, demographic changes, historic underinvestment, climate change and legislative changes will necessitate increased infrastructure investment over a long period of time. These changing dynamics continue to require our clients to commit to clear spending plans which are delivered through long-term programmes of investment and, as such, we are unlikely to be affected by the UK's potential withdrawal from the European Union and the current political uncertainty.

The Group's appointment to a number of key frameworks in the period increases our addressable market and provides significant opportunity for continued organic growth. The markets in which we operate remain large and fragmented and, as such, provide the Group with the opportunity to grow its Engineering Services business in the UK through selective, earnings enhancing acquisitions that are in line with our strategy. We also continue to seek opportunities in new regulated markets which align with the Group's established and proven capabilities.

The Group's strong financial position and our differentiated business model gives the Board confidence the Group will continue to deliver on its strategic objectives and provide excellent growth opportunities.

Paul Scott

Chief Executive

26 November 2019

1 Renew uses a range of statutory performance measures and alternative performance measures when reviewing the performance of the Group against its strategy. Definitions of the alternative performance measures, and a reconciliation to statutory performance measures, are included in note 8.

2 CP6 Network Rail Strategic Business Plan - Summary 9 February 2018

3 https://www.gov.uk/government/publications/nuclear-provision-explaining-the-cost-of-cleaning-up-britains-nuclear-legacy/nuclear-provision-explaining-the-cost-of-cleaning-up-britains-nuclear-legacy

4 NDA Business Plan 1 April 2019 to 31 March 2022 (March 2019)

5 Water UK A Manifesto for Water, Summary of the Water Industry's Plans in England 2020-25 3 September 2018

6 Wessex Water Business Plan 2020-2025

7 Environment Agency Research and analysis Long-term investment scenarios (LTIS) 2019 (Updated May 2019)

8 HM Treasury Autumn Budget 2018 (October 2018)

9 Ofgem RIIO-1 PCFM (November 2018)

Group income statement

For the year ended 30 September 2019

Group balance sheet

At 30 September

Group cash flow statement

For the year ended 30 September

Notes

1 International Financial Reporting Standards

The consolidated financial statements for the year ended 30 September 2019 have been prepared in accordance with International Financial Reporting Standards ("IFRS"). These preliminary results are extracted from those financial statements.

2 Segmental analysis

The Group is organised into two operating business segments plus central activities which form the basis of the segment information reported below. These segments are:

Engineering Services, which comprises the Group's engineering activities which are characterised by the use of the Group's skilled engineering workforce, supplemented by specialist subcontractors where appropriate, in a range of civil, mechanical and electrical engineering applications and;

Specialist Building, which comprises the Group's building activities which are characterised by the use of a supply chain of subcontractors to carry out building works under the control of the Group as principal contractor and;

Central activities, which include the sale of land, the leasing and sub-leasing of some UK properties and the provision of central services to the operating subsidiaries.

Engineering Services segment operating profit for the year ended 30 September 2018 is stated after charging exceptional costs of £11,469,000 and amortisation of £4,157,000 resulting in a total charge before taxation of £15,626,000 (See Note 3).

3 Exceptional items and amortisation of intangible assets

On 26 October 2018, the High Court handed down a judgement involving the Lloyds Banking Group's defined benefit pension schemes. The judgement concluded the schemes should be amended to equalise pension benefits for men and women in relation to guaranteed minimum pension benefits. The issues determined by the judgement arise in relation to many other defined benefit pension schemes. The impact of the additional liabilities amounted to £260,000 for the Amco Pension Scheme and £4,000,000 for the Lovell Pension Scheme.

The Board has separately identified the charge of £6,528,000 (2018: £4,157,000) for the amortisation of the fair value ascribed to certain intangible assets, other than goodwill, arising from the acquisitions of Giffen Holdings Ltd and QTS Group Ltd.

4 Income tax expense

Dividends are recorded only when authorised and are shown as a movement in equity rather than as a charge in the income statement. The Directors are proposing that a final dividend of 7.67p per Ordinary Share be paid in respect of the year ended 30 September 2019. This will be accounted for in the 2019/20 financial year.

6 Earnings per share

The dilutive effect of share options is to increase the number of shares by 548,000 (2018: 380,000) and reduce basic earnings per share by 0.21p (2018: 0.06p).

7 Preliminary financial information

The financial information set out above does not constitute the company's statutory accounts for the years ended 30 September 2019 or 2018. Statutory accounts for 2018 have been delivered to the registrar of companies. The auditor has reported on those accounts; his reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for 2019 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course.

8 Alternative performance measures

Renew uses a variety of alternative performance measures ('APM') which, although financial measures of either

historical or future performance, financial position or cash flows, are not defined or specified by IFRSs. The Directors

use a combination of APMs and IFRS measures when reviewing the performance, position and cash of the Group.

The Directors believe that APMs provide a better understanding of the underlying trading performance of the business because they remove the impact of non-trading related accounting adjustments. Furthermore, they believe that the Group's shareholders use these APMs when assessing the performance of the Group and it is therefore appropriate to give them prominence in the Annual Report and Accounts.

The APMs used by the Group are defined below:

Net Cash/(Debt) - This is the cash and cash equivalents less bank debt. This measure is visible in Note 31 in the Annual Report & Accounts. The Directors consider this to be a good indicator of the financing position of the Group.

Adjusted operating profit (£38.329m) and adjusted profit before tax (£37.750m) - Both of these measures are reconciled to total operating profit and total profit before tax on the face of the consolidated income statement. The Directors consider that the removal of exceptional items and amortisation provides a better understanding of the underlying performance of the Group. The equivalent GAAP measures are operating profit (£27.541m) and profit before tax (£26.962m).

Adjusted operating margin (6.4%) - This is calculated by dividing operating profit before exceptional items and

amortisation of intangible assets (£38.329m) by group revenue including share of joint venture (£600.631m) both of which are visible on the face of the income statement. The Directors believe that removing exceptional items and amortisation from the operating profit margin calculation provides a better understanding of the underlying performance of the Group. The equivalent GAAP measure is operating profit margin (4.6%) which is calculated by dividing operating profit (£27.541m) from group revenue including share of joint venture (£600.631m).

Adjusted earnings per share (40.43p) - This measure is reconciled to the earnings per share calculation based on earnings before exceptional items and amortisation in Note 3. The Directors believe that removing exceptional items and amortisation from the EPS calculation provides a better understanding of the underlying performance of the Group.

Group Revenue (£600.631m) - This measure is visible on the face of the income statement as Revenue: Group including share of joint venture.

Group order book, Engineering Services order book and Specialist Building order book - This measure is calculated by the Directors taking a conservative view on secured orders and visible workload through long-term frameworks.

Engineering Services revenue (£564.478m) - This measure is visible in Note 2 as Engineering Services Revenue including share of joint venture. The Directors consider this to be a good indicator of the underlying performance of the Group's Engineering Services business.

Adjusted Engineering Services operating profit (£39.410m) - This measure is visible in Note 2 as Engineering Services operating profit before exceptional items and amortisation of intangible assets. The Directors consider this to be a good indicator of the underlying performance of the Group's Engineering Services business. The GAAP equivalent measure is engineering services operating profit (£32.622m) which is also visible in Note 2.

Adjusted Engineering Services operating profit margin (7.0%) - This is calculated in the same way as adjusted operating profit margin but based on the adjusted Engineering Services operating profit (£39.410m) and the Engineering Services revenue (£564.478) figures as set out above. The equivalent GAAP measure is engineering services operating profit margin (5.8%) which is calculated by dividing engineering services operating profit (£32.622m) from engineering services revenue including share of joint venture (£564.478m).

Organic growth (8.4%) - This has been calculated by taking the Engineering Services revenue growth year on year excluding the impact of any acquisitions.

9 Posting of Report & Accounts

The Group confirms that the annual report and accounts for the year ended 30 September 2019 will be posted to shareholders as soon as practicable and a copy will be made available on the Group's website:

www.renewholdings.com