LONDON (ShareCast) - (Sharecast News) - Renew Holdings reported in an update on Friday that trading for the year ending 30 September was set to be below market expectations due to ongoing delays in its rail sector operations.
The AIM-traded firm said the slower-than-anticipated start to Network Rail's Control Period 7, which began last April, had continued to impact activity levels, leading to lower performance in the segment.

Despite the challenges, the board said it expected adjusted operating profit to surpass the prior year's figure of £70.9m.

The company said it was confident that the situation would normalise over time as clients remained committed to record levels of investment in maintaining and renewing the UK rail network to meet regulatory obligations.

However, uncertainty regarding the timing of several renewal programmes was persisting.

Outside of rail, Renew reported strong performance in its environmental division, with activity levels in the water sector exceeding expectations.

The firm said it anticipated further growth momentum as it transitioned to the new regulatory period, AMP8, commencing this April.

Recent contract awards from Affinity Water for two major five-year frameworks had bolstered its position ahead of the next control period.

Trading in the energy and infrastructure sectors remained in line with expectations, while the integration of recent acquisitions, Excalon and Full Circle, was progressing as planned, with both businesses expected to meet their full-year forecasts.

Renew said it was continuing to explore acquisition opportunities as part of its growth strategy.

The group's order book reached a record £905m as of 31 December, up from £795m a year earlier, reflecting continued framework successes and providing long-term revenue visibility.

Renew said it would issue a further trading update for the six months ending 31 March on 1 April.

At 0946 GMT, shares in Renew Holdings were down 21.29% at 715.52p.

Reporting by Josh White for Sharecast.com.

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