AIM stock in focus: Renew

The need for infrastructure services

In today's rapidly evolving world, the importance of maintaining and enhancing our infrastructure cannot be overstated. Infrastructure services encompass a wide range of activities, from civil engineering and construction, to the maintenance and upgrading of essential facilities. These services ensure that our roads, railways, utilities, and public buildings remain functional, safe, and efficient.

Who are Renew:

Renew Holdings is a company comprised of independently branded subsidiary businesses. These subsidiaries provide essential engineering services to maintain critical UK infrastructure in regulated markets. These markets benefit from long-term spending commitments, ensuring ongoing investment and support.

• Rail: Renew ensure the safety and reliability of the rail network through maintenance and upgrades. This includes tasks like removing fallen trees and monitoring track conditions for landslips.
• Infrastructure: Renew enhance transportation efficiency by offering comprehensive maintenance and repair services for roads and highways, including groundwork, drainage, fencing and signage.
• Environmental: Renew maintain and improve water infrastructure to ensure a clean and reliable water supply. Their services include, flood alleviation, river defence and coastal erosion protection.
• Energy: Renew support the energy sector with services that ensure the reliability and sustainability of energy infrastructure. They provide nuclear decommissioning and decontamination; and wind turbine maintenance.

Why we think they’re a good investment:

• Exposure to attractive long-term, non-discretionary structural growth drivers – the markets they operate in are underpinned by resilient long-term growth dynamics and committed regulatory spending, supported by a strong orderbook.
• Low risk business model: Renew’s subsidiaries operate in a diversified range of end markets.  A typical job is relatively small and is charged on a time and materials basis, ensuring that a delay or complication doesn’t make it loss making.  They are notdependent on large, capital-heavy contract awards.
• Barriers to entry: Renew’s work demands a highly skilled and experienced workforce. They have a proven track record of safe delivery, and their engineers are available 24/7 across the whole of the UK. This creates a barrier to entry.
• Ideally poised to benefit from green infrastructure investment: as global warming leads to more extreme weather events. Damage caused by storms and flooding highlights the growing need for resilient infrastructure and drives demand for Renew’s services.
• Strong financial health: Renew is a highly cash generative, profitable business with positive free cashflow. Some of this excess cash will be used to make further bolt-on acquisitions to help grow the business further.

Key facts:

• Market Value: £641.2 million
• Price/Earnings Ratio: 12.8X
• Dividend Yield: 2.4%
• Revenue for FY 2024: £1.009 billion

Source: Bloomberg, data at 30/09/2025

Risks:

• Shortage of skilled labour: although in recent years they have focused on recruiting trainees, apprentices and graduates in anticipation of future growth.
• Risk of a major economic downturn: resulting in a reduction in public spending. However, Renew’s work is mostly critical and non-discretionary, therefore spend tends to be less volatile.
• Major accident or hazard: no incidents to date.

Summary:

Renew provides essential engineering services to maintain and renew critical infrastructure networks, through their highly skilled, directly employed workforce, which enable Renew to deliver a safe and responsive service.

The infrastructure assets that they work on, operate in regulated markets, which means  they are funded by long-term frameworks. This provides visible, reliable and resilient revenue. 

Renew is exposed to structurally attractive end markets and there is scope for further growth as infrastructure spend increases.

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