Buy-in of Pension Scheme Liabilities
3 December 2020
Renew Holdings plc
("Renew" or the "Group")
Buy-in of Pension Scheme Liabilities
Renew (AIM: RNWH), the leading Engineering Services Group supporting UK infrastructure, is pleased to announce that o n 26 November 2020, the Trustee of the Lovell Pension Scheme (Lovell Scheme), in consultation with the Board of Renew, entered into a "buy-in" agreement with a specialist insurer.
This transaction will ensure the security of the benefits of the Lovell Scheme's pensioners and deferred members and while the Group remains legally responsible for the Lovell Scheme, the transaction has eliminated all of the Group's exposure to investment and funding risks in the Lovell Scheme. The transaction also improves the long-term security of members' benefits within the Lovell Scheme. Following the conclusion of this buy-in, and previous buy-ins that occurred in 2011 and 2016, all of the Lovell Scheme's liabilities will now be matched with corresponding annuities.
Whilst no further material contributions are now expected to be made to the Lovell Scheme, the Board has decided to investigate the opportunity of diverting those contributions into another of the Group's defined benefit pension schemes, the Amco Scheme, to see if that would enable the Amco Scheme to fully buy-in its liabilities over a shorter time scale than had previously been envisaged. Based on current estimates, the Directors believe that diverting the equivalent of one year's worth of contributions from the Lovell Scheme into the Amco Scheme is likely to be sufficient to achieve a buy-in of its remaining liabilities. Once the funding risk has been removed from both schemes there will be an immediate, material improvement to the Group's cash flow.
The "buy-in" will be completed by using Lovell Scheme assets to purchase annuities from the specialist insurer which match corresponding pension liabilities, where the annuity policy remains an asset of the Lovell Scheme.
Sean Wyndham-Quin, Renew's CFO, commented:
"We are very pleased that the Trustee of the Lovell Scheme has completed the recent buy-in with a specialist insurer. This transaction significantly de-risks the Group's balance sheet, further reduces the Group's pension exposure risks and improves the Group's cashflow in the medium term. We are now focused on trying to fully buy-in our liabilities with the Amco Scheme to further reduce the Group's pension exposure in line with our strategy."
For further information, please contact:
|
Renew Holdings plc |
|
|
Paul Scott, Chief Executive Officer Sean Wyndham-Quin, Chief Financial Officer
|
via FTI Consulting 020 3727 1000 |
|
Numis Securities Limited (Nominated Adviser) Stuart Skinner/ Kevin Cruickshank
|
020 7260 1000 |
|
FTI Consulting (Financial PR) Alex Beagley / James Styles / Sam Macpherson / Rafaella de Freitas
|
020 3727 1000 |
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.
About Renew Holdings plc
Renew Holdings Group plc is a leading UK Engineering Services business, performing a critical role in keeping the nation's infrastructure functioning efficiently and safely. The Group operates through independently branded subsidiaries across its chosen markets, delivering non-discretionary maintenance and renewal tasks through its highly skilled, directly employed workforce.
Renew's activities are focused into two business streams: Specialist Engineering, which accounts for over 90 per cent of the Group's adjusted operating profit, focuses on the key markets of Rail, Infrastructure, Energy (including Nuclear) and Environmental which are largely governed by regulation and benefit from non-discretionary spend with long-term visibility of committed funding.
Specialist Building focuses on the High Quality Residential and Science markets in London and the Home Counties.
For more information please visit the Renew Holdings plc website: www.renewholdings.com
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
Latest directors dealings
- 2 hours ago Johnson Matthey
- 3 hours ago Galliford Try
- 3 hours ago Galliford Try
- 3 hours ago Centrica
- 4 hours ago Smith & Nephew