Renew Holdings PLC on Friday warned annual profit would be below market expectations, reflecting slow trading in its Rail business.
The Leeds-based firm provides engineering services to four core markets, rail, infrastructure, energy and environmental.
Renew said trading within the rail sector has been impacted by the slow start to the Control Period 7 delivery plan, which commenced last April.
This lower-than-expected level of activity has continued in recent weeks, as has been widely reported, the firm added. As a result, trading in the group’s rail sector is now behind management expectations.
‘Given the ongoing challenges with delay and deferment in our Rail activities and more recent uncertainty over timing of the commencement of a number of renewals programmes, the board anticipates full year trading will be below market expectations albeit adjusted operating profit is still expected to be ahead of prior year,’ Renew said.
In the year to September 30, 2024, Renew reported adjusted operating profit of £70.9 million.
Company compiled consensus for the year to September 30, 2025, forecasts adjusted revenue of £1.15 billion, adjusted operating profit of £79.1 million and pre-IFRS 16 net cash of £4.0 million.
In response, shares in Renew fell 22% to 709.95 pence each in London on Friday morning. It has a market value of £562.0 million.
Having operated in this sector through previous control period transitions, Renew believes that this situation in Rail will normalise as ‘we move through the cycle’.
‘Our clients remain committed to record levels of expenditure in renewing and maintaining the national rail network to satisfy their regulatory obligations,’ it noted.
Elsewhere, Renew said in Environmental, activity levels in water are ahead of expectations. Forecast trading in the Energy and Infrastructure sectors remains in line with management expectations.
In addition, Renew said the integration of recent acquisitions, Excalon and Full Circle, is ‘progressing well’ and trading at both is forecast to be in line with expectations for the full year.
‘In line with our strategy, the group continues to review an active acquisition pipeline,’ Renew added.
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