Rail infrastructure work delays hit trading at engineering group

Engineering services group, Renew, says a slow start to the latest five-year rail infrastructure control period means trading in its railway operations is now behind management expectations.

Leeds-headquartered Renew has today issued a trading update for the year ending 30 September 2025, ahead of its Annual General Meeting on 27 January 2025.

It explains the rail sector’s control period seven began in April 2024 but notes that lower-than-expected levels of activity have continued in recent weeks.

Renew’s update states: “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 (2024: £70.9m).

“Having operated in this sector through previous control period transitions, we believe this situation 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.”

In Environmental sector, Renew says activity levels in Water infrastructure are ahead of expectations and it anticipates strong momentum through the transition to the new control period, which begins in April 2025.

For this period, the business has been appointed by water supplier Affinity Water to two new major five-year frameworks, further strengthening the company’s position ahead of the next control period.

Meanwhile, forecast trading in Renew’s Energy and Infrastructure sectors remains in line with management expectations.

Through further framework success, Renew says its order book is at a record level, providing long-term visibility and as of 31 December 2024 it was worth £905m (31 Dec 2023: £795m Engineering Services).