QTS acquisition pays off for Renew Holdings

A full contribution from Scottish rail contractor QTS has helped Renew Holdings post record results for the year to September 30 2019.

QTS acquisition pays off for Renew Holdings

Paul Scott

The engineering services group, which took over QTS in May 2018, reported operating profits up 21% to £39.4 million in the year to 30 September as group revenue rose to £600.6m from £541.5m.

The group said its adjusted operating margin was 6.4% compared to 5.7% previously.

Its engineering services order book increased to £542m from £510m previously.

Chief executive Paul Scott said: “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 non-discretionary 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.

“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.”

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