Renew: redudancies in land remediation and building divisions

Renew has downsized both its land remediation and specialist building operations at a cost of £1.5m. The figure covers both redundancies and restructuring charges.

In a trading statement today, covering the financial year to 30 September 2008, Renew added that there will also be £1m charge triggered by the winding up of the group’s British Building & Engineering Pension Scheme.

But there is some good news….Renew ended its financial year with a healthy cash balance of £27m.

The statement falls shy of declaring what Renew’s pre-tax profit actually is: that figure is being kept under wraps until 26 November.

Brian May, chief executive, said: “In the last few months, conditions in the house building market, which is the principal end market for our land remediation business, have worsened considerably.”

Renew also warned of weaker market conditions ahead for non-specialised building which represented 27% of the group’s building division’s turnover.

As a result the land remediation activities have been “re-aligned” so that capability is on a smaller scale.

The regional civil engineering market is robust, said Renew.

The specialist building division’s capacity has been cut by 15% in line with the reduction in its forward order book.

These actions will result in annual costs over £5m said May.

Looking forward, the operating margins in specialist engineering next year are expected to run to 4%.

May said: “Overall in 2009, the board expects a continuing improvement in the Group’s operating margin percentage.”