Our tip renews your cash six times over

RENEW HOLDINGS has come a long way since Midas recommended the stock at 75p in 2012. Once known as a construction firm, Renew has steadily increased its focus on essential renewal and maintenance work in areas such as railways, waterworks, mobile antennae and nuclear decommissioning.

Today, these businesses generate 95 per cent of group income, sales and profits have soared and the shares have surged to £5.00 – a more than sixfold rise.

Looking ahead, Renew should continue to deliver growth. The Government has pledged to spend billions of pounds on infrastructure, a good proportion of which will be invested in upgrade and modernisation projects. Renew is ideally placed to benefit from these plans.

Chief executive Paul Scott employs 3,600 skilled staff, there is a bespoke Renew academy, and the group has more than 200 young people on training schemes, including 127 apprentices.

Having a large workforce means that Renew can respond quickly when customers need urgent repair work, and it also gives the firm an edge with customers such as Network Rail, Vodafone,

Sellafield and Yorkshire Water. Refurbishing rail tunnels, maintaining track, preventing water leakage, decommissioning nuclear plants – these are all highly-skilled jobs, and contracts tend to last for several years or, in some cases, decades.

New programmes are coming on stream in the regulated rail and water industries and Scott has already secured contracts that will deliver a rich pipeline of work.

The group is also helping mobile operators to deliver 5G infrastructure, a project that will probably take years to complete.

Renew delivered an 11 per cent rise in turnover to £601 million for the year to September 2019, with profit up 22 per cent to £38 million and a 15 per cent dividend rise to 11.5p. Further growth is expected this year, including profit of

£40 million and a 12.5p dividend, which is set to rise again in 2021.