£1.3m exceptional gain in pipeline for Renew
YORKSHIRE engineering services group Renew Holdings today announced it will see a £1.3m exceptional gain in its results for the year following the sale of 71 acres of land.
The Leeds-based group, which operates in UK infrastructure markets, said the £11m cash received for the sale of the land near Rugby will outweigh the write-down of the value of land it owns in the US and a £2.9m provision it has made against expected unrecoverable contract costs for previously closed building businesses.
This £1.3m exceptional gain will be used to eliminate short-term borrowings to finance the acquisition of Lewis Civil Engineering for £7.9m, which it announced earlier this month.
In its results for the year ending September 30 2013, Renew said it anticipates it will show a net cash position. It also said current trading is in line with market expectations.
The land sold near Rubgy, for employment land use, will result in an exceptional profit of £9.4m. Renew said it anticipates that tax on this profit will be fully relieved by brought forward losses.
In the US, the group has three remaining property assets where delays due to economic conditions have led to detailed planning and zoning agreements expiring. Outline permissions remain, however forthcoming changes to state and county regulations will require new applications to be made with the expectation of reductions in allowable building density.
The board commissioned an independent review of the group’s US property assets and has decided to write down the carrying value of these assets in light of these new requirements and current market conditions by £5.2m to £2.7m.
