Renew Holdings PLC RNWH Preliminary Results

  Renew Holdings PLC (RNWH) - Preliminary Results

RNS Number : 0421S
Renew Holdings PLC
27 November 2012

                              Renew Holdings plc

                           ("Renew" or the "Group")

                             Preliminary results

Renew  (AIM:   RNWH),   the   Engineering   Services   Group   supporting   UK 
infrastructure, announces record  preliminary results  for the  year ended  30 
September 2012 ahead of expectations.

Financial Highlights

                                2012    2011  
Revenue                      £337.4m £352.8m  -4%
Adjusted operating profit*    £10.3m   £7.9m  +30%
Operating margin                3.1%    2.2%  +41%
Adjusted profit before tax*   £10.0m   £8.2m  +22%
Reported profit before tax     £8.4m   £2.6m  +223%
Adjusted earnings per share*   13.9p    9.7p  +43%
Basic earnings per share        7.9p    2.2p  +259%
Dividend per share             3.15p    3.0p  +5%


  Operational Highlights

· Engineering Services revenue up 24% to £214.1m (2011: £172.8m)

· Engineering Services adjusted operating  profit* up 28% to £9.6m  (2011: 
£7.5m) - an increase in margin to 4.5% (2011: 4.3%)

· Group order book up 16% to £331m (2011: £286m) with Engineering Services
order book up 31% to £235m (2011: £179m)

· Nuclear order book up 51% to £109m (2011: £72m)

· Net debt reduced to £5.5m (2011: £6.8m)

* Adjusted  results are  shown  prior to  exceptional  items of  £1.1m  (2011: 
£5.2m), amortisation charges of  £0.5m (2011: £0.4m) and  a £2.4m loss from  a 
discontinued operation.

Commenting on  the  results, Roy  Harrison  OBE, Chairman  said:  "Our  recent 
success in key framework appointments in Nuclear, Rail and Water together with
our strong  list  of  future  opportunities demonstrates  that  the  Group  is 
pursuing the right strategy, evidenced by  our growing forward order book  and 
our record financial results."


Renew Holdings plc                     Tel: 0113 281 4200
Brian May, Chief Executive
John Samuel, Group Finance
Numis Securities Limited               Tel: 020 7260 1000
Stuart Skinner  (Nominated 
James Serjeant  (Corporate 
Walbrook PR                            Tel: 020 7933 8780
Paul    McManus     (Media   Mob: 07980 541 893 or
Paul  Cornelius  (Investor Mob: 07827 879 496 or

About Renew Holdings plc

Engineering Services, which accounts  for over 60% of  Group revenue and  over 
90% of  operating profit,  focuses on  the key  markets of  Energy  (including 
Nuclear), Environmental  and Infrastructure,  which  are largely  governed  by 
regulation and benefit from non-discretionary spend with long-term  visibility 
of committed funding.

Specialist Building  focuses on  New Build  Affordable Housing,  High  Quality 
Residential and Retail markets in the South of England.

The Group has 76 framework agreements; 62 of these are in Engineering Services
with 45 of those being maintenance in nature.

For  more  information   please  visit   the  Renew   Holdings  plc   website:

Chairman's Statement


The Group has achieved  record results for the  year ended 30 September  2012, 
ahead of market expectations, and has strengthened its position as a  provider 
of Engineering Services to UK infrastructure.

Profit before income tax was up 22%  to £10.0m (2011: £8.2m) on Group  revenue 
of £337.4m (2011: £352.8m).  Adjusted earnings per share  increased by 43%  to 
13.9p (2011: 9.7p). Basic earnings per share increased by 259% to 7.9p  (2011: 

Results  for  the  year  are  stated  after  charging  exceptional  costs  and 
amortisation charges  of £1.6m  (2011: £5.6m)  and a  loss of  £2.4m from  the 
discontinued operation, C&A Pumps Ltd, which  was sold in November 2012 for  a 
nominal consideration.  These amounts  have been  excluded from  the  adjusted 
financial results  to show  the underlying  performance of  the business.  The 
exceptional costs in the period of  £1.1m (2011: £5.2m) relate to the  planned 
scale down of  Specialist Building and  the integration of  our rail  business 
following the acquisition of Amco.

It is particularly pleasing that Engineering  Services revenue grew by 24%  to 
£214.1m (2011: £172.8m), with operating profit prior to exceptional items  and 
amortisation up 28% to £9.6m (2011: £7.5m), an increase in margin to 4.5% from
4.3%. Both our Nuclear and Rail  businesses, which represent over 60% of  our 
Engineering Services activity, performed strongly and have growing order books
for both the new financial year and beyond.

In Specialist Building, our focus on selective niche markets in the South, has
delivered  increased  operating  profit  of  £2.1m  (2011:  £1.9m)  prior   to 
exceptional items and an improvement in margin to 1.7% from 1.1% on revenue of
£123.1m (2011: £178.9m).

The Group's contracted order book at  30 September 2012 stood at £331m  (2011: 
£286m), a 16% increase from one year ago, with the Engineering Services  order 
book up 31% to £235m (2011: £179m).

The Group has reduced  net debt to  £5.5m (2011: £6.8m)  comprising a loan  of 
£7.5m (2011: £12.5m) and cash of £2.0m (2011: £5.7m).


The Board is  proposing a final  dividend at 2.10p  per share, increasing  the 
full year dividend by 5% to 3.15p (2011: 3.00p). The dividend will be paid  on 
4 March 2013  to shareholders  on the  register as  at 1  February 2013.  The 
dividend is 4.4x (2011: 3.2x) covered by adjusted earnings per share.


The Group is successfully positioned as a provider of engineering services  to 
key clients in the UK's Energy, Environmental and Infrastructure markets,  and 
has been  reclassified on  the London  Stock Exchange  as a  Business  Support 
Services company.

Last year, the Board declared its ambition  to grow turnover to over £500m  by 
2014, through both  organic growth  and selective  acquisitions, with  targets 
that Engineering Services will account for  at least 70% of Group revenue  and 
that the Group operating margin will  exceed 3%. These results and our  strong 
forward order book demonstrate that the Group is well placed to achieve  these 

Our acquisition  of  Amco  in  February 2011  has  proved  highly  successful, 
delivering results ahead of our expectations and generating cash such that  we 
have now repaid 50% of the £15m  term loan taken out for the acquisition.  Our 
reducing net  debt  and net  gearing  of 62%  (2011:  76%) together  with  our 
interest cover of over 16x provides the Group with funding flexibility  should 
further suitable acquisition opportunities be identified.

Our Engineering  Services operations  continue to  focus on  securing  further 
sustainable framework positions, concentrating  on areas of  non-discretionary 
spend.  In  Specialist  Building,  our  businesses  are  delivering   improved 
operating  margins  as  they  target  the  stable  markets  of  High   Quality 
Residential, New Build Affordable Housing and  Retail in the South, where  the 
Group has particular expertise and experience.

The Board believes our  key markets and framework  positions provide good  and 
continuing opportunities through 2013  and beyond and that  the Group is  well 
positioned to deliver further profitable growth.

R J Harrison OBE


27 November 2012

Chief Executive's Review

The Group  has  made further  progress  in growing  its  Engineering  Services 
business which  focuses  on  supporting  the maintenance  and  renewal  of  UK 
infrastructure  increasing  both  revenue  and  operating  profit.  Specialist 
Building has increased its operating margin in the year and is concentrated on
sustainable markets in the South.

Engineering Services

Renew provides  integrated engineering  services  nationwide focusing  on  the 
highly regulated  markets of  Energy, Environmental  and Infrastructure.  The 
Group concentrates on  the renewal  and maintenance  of essential  operational 
assets delivered  through  its  multidisciplinary workforce  employed  by  our 
strong local and independently branded businesses.

Our strategy is delivering both  strong financial results and growth.  Revenue 
in Engineering  Services  grew by  24%  to  £214.1m (2011:  £172.8m)  and  now 
accounts for 63% of  ongoing Group revenue and  over 90% of operating  profit. 
Operating margin increased to 4.5% (2011: 4.3%).

The Engineering Services order book is growing strongly and is underpinned  by 
62 frameworks, an increase of 22% in the year, of which 45 are for maintenance
work. Non-discretionary  orders account  for 95%  of the  £235m (2011:  £179m) 
order book which has grown by 31% in the year.

Our order  book in  Energy  grew by  51%  to £124m  (2011:  £82m), by  14%  in 
Environmental to £33m (2011: £29m) and by 15% in Infrastructure to £78m (2011:

It remains  the  Group's  strategy  to  grow  its  Engineering  Services  both 
organically and by  targeting earnings enhancing  acquisitions in  sustainable 
markets. The  recent appointment  of  Paul Scott,  Managing Director  of  our 
Nuclear business, as Engineering Services Director, will assist in  developing 
our integrated offering to these markets.


Renew operates  nationally in  the nuclear,  renewable and  traditional  power 
generation sectors  where  work  concentrates  on  the  critical  planned  and 
reactive maintenance  and  asset  renewal  programmes. Much  of  the  work  is 
delivered through our 24 framework agreements.

In Nuclear,  Renew  operates  across  the  Nuclear  Decommissioning  Authority 
("NDA") estate in  high hazard  reduction programmes,  decommissioning and  in 
operational asset  care. We  are  strongly positioned  with engagements  on  9 
licenced nuclear  sites that  command  around 70%  of  the NDA's  £3bn  annual 
expenditure. Within  that budget,  over  55% of  the  spend is  allocated  to 
Sellafield, where we have been active for  over 60 years and where we are  the 
principal provider of mechanical and electrical services.

Our revenue at Sellafield grew by 12% in the last twelve months and has  grown 
by over 150% in the last 7 years. All of our 2012/13 revenue budget in Nuclear
is already secured  in an order  book that has  grown by 51%  to £109m  (2011: 

Operational asset  care  is  vital to  Sellafield  which  derives  substantial 
revenue from spent fuel management and reprocessing. For the last 15 years  we 
have carried out production operations support under the Multi Discipline Site
Works framework. Since the year  end, we have again  been appointed as one  of 
three participants to  deliver work packages  worth up to  £280m over 4  years 
commencing in April 2013. During the year, we were also appointed as the  sole 
mechanical and electrical  partner to Stobbarts  on the £58m  Site Wide  Asset 
Care framework which runs until April 2016.

During the year,  in high  hazard risk reduction,  we were  appointed as  sole 
participant to the 4 year £26m Bulk Sludge Retrievals Framework and we deliver
a wide range  of decommissioning tasks  through the Decommissioning  Framework 
Agreement which is secured until 2015. The Evaporator D programme is the  UK's 
largest current nuclear project where  our mechanical and electrical  services 
contract has recently been  extended to provide over  £50m of work through  to 
completion in 2015. We are able to secure positions on these highly  sensitive 
programmes due to  the large  number of our  employees who  carry the  highest 
level of site security clearance.

Our predominant position on  the site makes  us a partner  of choice on  major 
programmes. A  good example  of this  is our  appointment as  a Supply  Chain 
Partner  to  Morgan  Sindall  which  recently  announced  its  appointment  as 
preferred delivery partner for a potential £1.1bn contract delivering a  range 
of essential  services  at  the  Sellafield  site,  under  the  Infrastructure 
Strategic Alliance. These services will  include the maintenance of steam  and 
electricity generation,  water  supply,  chemical  storage  and  distribution, 
drainage networks and all transport infrastructure at the site.

The Group undertakes  work at  8 other nuclear  licenced sites  across the  UK 
including  work  on  the  2  year  decommissioning  and  demolition   contract 
associated with a  redundant Fuel Manufacturing  Facility at Springfields  for 
Westinghouse. We continue to support the consortia involved in the Nuclear New
Build programme where we provide skills in stainless steel fabrications.

We continue to provide support at  some of the UK's largest traditional  power 
stations, where we provide maintenance services under 7 framework agreements.
There are also increasing  opportunities in the renewables  market and we  are 
active in investment programmes in  biomass and hydro generation  technologies 
where we are currently  delivering initial works on  two 3 year  hydroelectric 
frameworks with Scottish Water and Welsh Water.


The Group  has extensive  expertise in  water infrastructure  development  and 
operational maintenance,  flood alleviation,  river and  coastal defences  and 
land remediation. A large  portion of work in  this sector is procured  under 
long term framework agreements.

In Water, we continue to  work for Northumbrian Water  under the 10 year  AMP5 
programme. In  addition to  carrying out  works under  the major  waste  water 
project framework we now  have a position  on 7 non-discretionary  maintenance 
frameworks which accounts for 80% of  ongoing activity. In particular we  have 
developed specialist skills in providing services to the existing trunk  mains 
network both in cleaning and general  maintenance. This shift in the  profile 
of our work in the Water sector has led to a doubling of our order book at the
year end  and an  improvement in  margins which  we expect  to build  upon  in 

In Land Remediation, we extended our  16 year relationship with National  Grid 
where we were reappointed to 3 remediation frameworks nationally. Also in the
year we were appointed to the Environment Agency's National Contaminated  Land 
Remediation Contractors framework which  runs to 2015.  Ongoing work for  the 
Environment Agency is delivered  through 7 minor  works and river  maintenance 
frameworks for civil, mechanical and electrical services.


The Group continues to access the rail, highways and industrial markets across
the UK where work is underpinned  by 17 framework agreements for the  delivery 
of integrated civil, mechanical and electrical engineering services.

The majority of activity this year has been  in Rail where we have seen a  23% 
increase in our order book to £74m (2011: £60m). Our focus is on the  renewal, 
refurbishment and maintenance of operational assets for clients, including our
largest client Network Rail where we remain a leading provider of  engineering 
maintenance works. These works include  off-track renewal and maintenance  of 
line side structures including tunnels,  bridges and viaducts, mechanical  and 
electrical installations  and the  delivery of  a wide  range of  planned  and 
reactive  maintenance  services.  We  have  particular  skills  in   managing 
complicated tunnel refurbishment projects and earlier this year completed  our 
largest individual project at Ore Tunnel near Hastings.

During the year our existing Asset  Management frameworks were renewed for  up 
to 5 years  and extended by  a new framework  appointment in Scotland.  These 
frameworks,  along  with  our   established  Buildings  and  Civils   Delivery 
Partnership framework agreements,  where we  have seen  increased spend,  have 
reinforced our  position with  Network Rail  as the  only provider  delivering 
these services nationally.

The recent McNulty Report recommends the devolution of responsibility so  that 
decisions are made as close to customers and the market as possible.  Network 
Rail has  commenced  implementation  of these  recommendations  by  appointing 
management responsible  for the  10 operating  routes. As  the only  national 
provider of off-track  maintenance of  existing assets, with  12 local  depots 
spread across the country, these initiatives play to our strengths and we  are 
well placed to support our key Rail client as these changes are implemented.

Specialist Building

The Group's Specialist Building activities are focused in the South  targeting 
the High Quality Residential, New Build Affordable Housing and Retail markets.
These niche markets,  in which  we have particular  experience and  expertise, 
provide sustainable opportunities for the  future. Following our decision  to 
withdraw from public sector building markets in the North, Specialist Building
revenue reduced  as  expected to  £123.1m  (2011: £178.9m)  whilst  delivering 
operating profits  up 11%  at  £2.1m (2011:  £1.9m) and  increasing  operating 
margin to 1.7% (2011: 1.1%), thereby justifying our strategy.

In High Quality Residential, the Group's activities are focused in and  around 
London  where  the  market   remains  strong  with   over  £400m  of   current 
opportunities identified. Our experience in  this sector as a leading  quality 
provider with particular skills in  providing the temporary works  engineering 
solutions  to  extend   properties  below   ground,  continues   to  prove   a 
differentiator and provides opportunity for early involvement in schemes.

In New Build Affordable  Housing, the Group has  recently been appointed to  a 
new framework with  Catalyst Housing  where, as one  of 7  providers, we  will 
access up to an advertised £350m of projects over the next 4 years. The Group
now  has  a  position  on   14  framework  agreements  with  leading   Housing 
Associations which provide access to a £700m annual market. 

In Retail, there  remains good  visibility of opportunities  with new  clients 
including Morrisons and Odeon Cinemas.  We continue our 24 year  relationship 
with Tesco and remain the preferred fit out contractor for Cineworld.


We are committed to  the safety of  our employees and those  who work with  us 
evidenced in  the record  reduction  in the  Group's Accident  Incidence  Rate 
during 2012, now at its lowest figure in 7 years, a reduction of 87% over that

The strong financial results demonstrate  the skills and determination of  all 
our employees. The success  of the Group depends  on our employees  continued 
hard work  and commitment,  for which  the  Board would  like to  express  its 


Renew  provides  engineering  services   to  support  the  essential   ongoing 
operations of critical  UK infrastructure through  experienced local  delivery 
teams. The Group is focused  on developing its maintenance, refurbishment  and 
renewal activities in its target  regulated sectors where sustainable  revenue 
is generated through its  core maintenance and  renewal frameworks with  major 
clients, many of which the Group has worked with for a number of years.

Our recent success in  key framework appointments in  Nuclear, Rail and  Water 
together with our strong  list of future  opportunities demonstrates that  the 
Group is pursuing the right strategy,  evidenced by our growing forward  order 
book and our record financial results.

Brian May

Chief Executive

27 November 2012

Group income statement

For the year ended 30 September 2012

                                                          Before  Exceptional
                                                     exceptional    items and
                                                       items and amortisation
                                                    amortisation           of
                                                              of       assets
                                               Note       assets (see Note 3)     Total     Total
                                                            2012         2012      2012      2011
                                                            £000         £000      £000      £000
Group revenue  from  continuing                   2      337,423           -   337,423   352,760
Cost of sales                                          (301,040)           - (301,040) (319,661)
Gross profit                                              36,383           -    36,383    33,099
Administrative                                          (26,115)      (1,620)  (27,735)  (30,856)
Operating profit                                  2       10,268      (1,620)     8,648     2,243
Finance income                                                45           -        45       167
Finance costs                                              (518)            -     (518)     (387)
Other  finance  income  -  defined   benefit                 246           -       246       530
pension schemes
Profit before income tax                                  10,041      (1,620)     8,421     2,553
Income tax expense                                4      (1,713)          405   (1,308)   (1,177)
Profit for the year from continuing activities             8,328      (1,215)     7,113     1,376
Loss    for    the    year    from     discontinued                             (2,372)      (71)
Profit for the year attributable to equity  holders                               4,741     1,305
of the parent company
Basic earnings per share from continuing          6        13.9p       (2.0p)     11.9p      2.3p
Diluted   earnings   per   share    from          6        13.3p       (1.9p)     11.4p      2.2p
continuing operations
Basic earnings per share                          6                                7.9p      2.2p
Diluted earnings per share                        6                                7.6p      2.1p
Group  statement  of  comprehensive 
For the  year  ended  30  September                                                2012      2011
                                                                                   £000      £000
Profit for the year attributable to equity holders                                4,741     1,305
of the parent company
Exchange movements in reserves                                                    (407)       123
Movement in actuarial valuation of the defined                                  (3,442)   (5,265)
benefit pension schemes
Movement on deferred tax relating to the defined                                    847     1,382
benefit pension schemes
Total comprehensive income/(expense) for the year                                              
attributable to equity holders of the parent
company                                                                           1,739   (2,455)
Group statement of changes in equity

                          Called   Share    Capital   Cumulative  Share based  Retained     Total
                           share premium redemption  translation     payments  earnings    equity
                         capital account    reserve   adjustment      reserve
                            £000    £000       £000         £000         £000      £000      £000
At 1 October 2010          5,990   5,893      3,896        1,059          217   (3,893)    13,162
Transfer   from   income                                                                       
statement for the year
                                                                                  1,305     1,305
Dividends paid                                                                  (1,797)   (1,797)
Recognition   of   share                                                                       
based payments
                                                                           66                  66
Exchange differences                                         123                              123
Actuarial         losses                                                                       
recognised  in   pension 
schemes                                                                         (5,265)   (5,265)
Movement on deferred tax                                                                       
relating to the  pension 
schemes                                                                           1,382     1,382
At 30 September 2011       5,990   5,893      3,896        1,182          283   (8,268)     8,976
Transfer   from   income                                                                       
statement for the year
                                                                                  4,741     4,741
Dividends paid                                                                  (1,827)   (1,827)
Recognition   of   share                                                                       
based payments
                                                                            6                   6
Exchange differences                                       (407)                            (407)
Actuarial         losses                                                                       
recognised  in   pension 
schemes                                                                         (3,442)   (3,442)
Movement on deferred tax                                                                       
relating to the  pension 
schemes                                                                             847       847
At 30 September 2012       5,990   5,893      3,896          775          289   (7,949)     8,894

Group balance sheet

At 30 September 2012

                                      2012        2011
                                      £000        £000
Non-current assets                                   
Intangible assets - goodwill         26,918      27,726
 - other      2,250       2,750
Property, plant and equipment         4,690       4,805
Retirement benefit assets             1,820       1,089
Deferred tax assets                   2,929       3,329
                                    38,607      39,699
Current assets                                       
Inventories                           9,109       8,918
Trade and other receivables          73,958      84,901
Current tax assets                      834         646
Cash and cash equivalents             2,040       5,688
                                    85,941     100,153
Total assets                        124,548     139,852
Non-current liabilities                    
Borrowings                          (2,500)     (7,500)
Obligations under finance leases      (676)       (369)
Retirement benefit obligations        (569)       (119)
Deferred tax liabilities            (1,039)     (1,091)
Provisions                            (566)       (566)
                                   (5,350)     (9,645)
Current liabilities                        
Borrowings                          (5,000)     (5,000)
Trade and other payables          (104,302)   (115,543)
Obligations under finance leases      (570)       (291)
Current tax liabilities               (266)       (231)
Provisions                            (166)       (166)
                                 (110,304)   (121,231)
Total liabilities                 (115,654)   (130,876)
Net assets                            8,894       8,976
Share capital                         5,990       5,990
Share premium account                 5,893       5,893
Capital redemption reserve            3,896       3,896
Cumulative translation reserve          775       1,182
Share based payments reserve            289         283
Retained earnings                   (7,949)     (8,268)
Total equity                          8,894       8,976

* Balance sheet has been restated for hindsight fair value adjustment on
acquisition of Amco Group Holdings Ltd.

Group cash flow statement

For the year ended 30 September

                                                           2012     2011
                                                           £000     £000
Profit for the year from continuing                           7,113    1,376
Amortisation of intangible assets                               500      404
Depreciation                                                  905    1,111
Profit on sale of property, plant and                           (17)     (32)
Increase in inventories                                      (501)    (248)
Decrease in receivables                                     10,081    8,567
Decrease in payables                  (10,969)    (337)
Current service cost in respect of defined benefit pension         54       56
Cash contribution to defined benefit pension                 (3,477)  (4,039)
Expense in respect of share options                               6       66
Financial income                                            (291)    (697)
Financial expenses                                            518      387
Interest paid                                               (518)    (387)
Income taxes paid                                              (333)    (523)
Income tax expense                                          1,308    1,177
Net cash inflow from continuing operating                      4,379    6,881
Net cash outflow from discontinued operating                   (794)    (205)
Net cash inflow from operating activities                      3,585    6,676
Investing activities                                             
Interest received                                              45      167
Proceeds on disposal of property, plant and                      191    1,768
Purchases of property, plant and equipment                   (1,253)    (843)
Acquisition of subsidiaries net of cash acquired                   - (29,319)
Net cash outflow from continuing investing                   (1,017) (28,227)
Net cash inflow from discontinued investing                       36        8
Net cash outflow from investing activities                     (981) (28,219)
Financing activities                                             
Dividends paid                                            (1,827)  (1,797)
New loan                                                           -   15,000
Loan repayments                                              (5,000)  (2,500)
Inception of new leases                                          983      396
Repayments of obligations under finance leases                 (396)    (109)
Net cash (outflow)/inflow from financing                     (6,240)   10,990
Net cash (outflow) from discontinued financing                     -      (6)
Net cash (outflow)/inflow from financing                     (6,240)   10,984
Net decrease in continuing cash and cash                     (2,878) (10,356)
Net decrease in discontinued cash and cash                     (758)    (203)
Net decrease in cash and cash equivalents                    (3,636) (10,559)
Cash and cash equivalents at beginning of year                 5,688   16,245
Effect of foreign exchange rate changes on cash and cash         (12)        2
Cash and cash equivalents at end of                            2,040    5,688

Bank balances and cash                                       2,040    5,688


1 International Financial Reporting Standards

The consolidated financial statements for the year ended 30 September 2012
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's businesses are organised into two operating segments 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.

                                            2012    2011
Revenue is analysed as follows:              £000    £000
Engineering Services                      214,102 172,808
Specialist Building                       123,070 178,902
Inter segment revenue                       (179)    (61)
Segment revenue                           336,993 351,649
Central activities                            430   1,111
Group revenue from continuing activities  337,423 352,760

                             exceptional  Exceptional                
                               items and    items and                
                            amortisation amortisation                
                                 charges      charges 2012            2011
Analysis of operating profit         £000         £000            £000    £000
From continuing activities                                                
Engineering Services                9,639        (986)           8,653   6,608
Specialist Building                 2,134        (634)           1,500 (1,425)
Segment operating profit           11,773      (1,620)          10,153   5,183
Central activities                (1,505)            -         (1,505) (2,940)
Operating profit                   10,268      (1,620)           8,648   2,243
Net financing
(expense)/income                    (227)            -           (227)     310
Profit on ordinary
activities before income tax       10,041      (1,620)           8,421   2,553

3 Exceptional items and amortisation of intangible assets

                                          2012  2011
                                          £000  £000
Redundancy and restructuring costs        1,120 3,680
Amco acquisition costs                        - 1,357
Provision for Office of Fair Trading fine     -   200
Legal fees in connection with OFT fine        -    10
Total exceptional items                   1,120 5,247
Amortisation of intangible assets           500   404
                                         1,620 5,651

The Board has determined that certain  charges to the income statement  should 
be separately identified for better understanding of the Group's results.

During the year, the Group  has incurred £1,120,000 of exceptional  redundancy 
and restructuring  costs.  £634,000  of  these  costs  relate  to  Specialist 
Building where further staff  reductions have been made  to align the  segment 
with  the  current  trading  environment.  £486,000  relates  to  Engineering 
Services which primarily  relates to  the integration of  our rail  businesses 
following the acquisition of Amco Group Holdings Ltd.

The Board  has  also  separately  identified the  charge  of  £500,000  (2011: 
£404,000)  for  the  amortisation  of  the  fair  value  ascribed  to  certain 
intangible assets other than goodwill arising from the acquisitions of Seymour
(C.E.C) Holdings Ltd and Amco Group Holdings Ltd.

Discontinued operation analysis

                                                  2012    2011
                                                  £000    £000
Revenue                                           1,816   3,907
Expenses                                        (3,216) (4,000)
Write off of goodwill and fair value adjustment   (904)       -
Loss before income tax                          (2,304)    (93)
Income tax (expense)/credit - deferred tax         (68)      22
Loss for the year from discontinued operation   (2,372)    (71)

The discontinued operation, C&A Pumps Ltd, was sold on 14 November 2012 for  a 
nominal consideration.

4 Income tax expense

Analysis of expense in year                  2012         2011
                                            £000         £000 
Current tax:                                                 
UK corporation tax on profit for the year   (266)            - 
Adjustments in respect of previous             86          417 
Total current tax                           (180)          417 
Deferred tax - defined benefit pension      (893)      (1,175) 
Deferred tax - other timing differences     (302)        (397) 
Total deferred tax                        (1,195)      (1,572) 
Income tax expense                        (1,375)      (1,155) 
Deferred tax in respect of discontinued        67         (22) 
Income tax expense in respect of                            
continuing activities                                          
                                          (1,308)      (1,177)


5 Dividends                                                   2012        2011
                                                       Pence/share Pence/share
Interim (related to the year ended 30 September
2012)                                                         1.05        1.00
Final (related to the year ended 30 September
2011)                                                         2.00        2.00
Total dividend paid                                           3.05        3.00
                                                             £000        £000
Interim (related to the year ended 30 September
2012)                                                          628         598
Final (related to the year ended 30 September
2011)                                                        1,199       1,199
Total dividend paid                                          1,827       1,797

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 2.10p per Ordinary Share be paid in respect
of the  year ended  30 September  2012. This  will be  accounted for  in  the 
2012/13 financial year.

6 Earnings per share

                                            2012                   2011
                            Earnings    EPS   DEPS   Earnings    EPS   DEPS
                                £000  Pence  Pence       £000  Pence  Pence
Earnings before exceptional
costs & amortisation            8,328  13.90  13.33      5,807   9.69   9.35
Exceptional costs &
amortisation                  (1,215) (2.03) (1.95)    (4,431) (7.39) (7.13)
Basic earnings per share -
continuing                      7,113  11.87  11.38      1,376   2.30   2.22
Loss for the year from                           
discontinued operation        (2,372) (3.96) (3.79)       (71) (0.12) (0.12)
Basic earning per share         4,741   7.91   7.59      1,305   2.18   2.10
Weighted average number of
shares                               59,899 62,493           59,899 62,093

The dilutive effect of share  options is to increase  the number of shares  by 
2,594,000 (2011:  2,194,000) and  reduce  basic earnings  per share  by  0.32p 
(2011: 0.08p).

7 Preliminary financial information

The financial  information set  out above  does not  constitute the  Company's 
statutory accounts  for  the  years  ended 30  September  2012  or  2011.  The 
financial information for 2011 is derived from the statutory accounts for 2011
which have been  delivered to the  Registrar of Companies.  The auditors  have 
reported on the 2011 accounts; their report was (i) unqualified, (ii) did  not 
include a reference to any matters to which the auditors 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 2012  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 Posting of Report & Accounts

The Group confirms that the annual report  and accounts for the year ended  30 
September 2012 will  be posted to  shareholders as soon  as practicable and  a 
copy will be made available on the Group's website:

                     This information is provided by RNS
           The company news service from the London Stock Exchange


FR KMMZMVVFGZZM -0- Nov/27/2012 07:00 GMT
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