The consideration includes £0.6m in respect of two freehold properties used by Lewis. The acquisition has been funded from the Group's cash resources and overdraft facilities provided by HSBC Bank plc. Lewis had a net cash position of £0.6m at the point of acquisition.
Lewis, which is based near Cardiff, was founded in 1984 and specialises in the construction and maintenance of infrastructure and assets within the water industry. It is a well respected brand in its region and market with clients including Wessex Water and Dwr Cymru Welsh Water. It provides its services through framework agreements and employs approximately 175 highly skilled personnel.
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In the year ended 31 July 2012, Lewis reported an operating profit of £1.0m on turnover of £20.4m. For the year ended 31 July 2013, Lewis is expected to record an increase in turnover of approximately 20% and to maintain its operating profit margin percentage. Lewis's financial performance is both cash generative and accretive to Renew's Engineering Services operating margin.
Lewis was 80% owned by Mrs J Lewis, who has resigned from the Board at completion of the transaction. David Boden, Managing Director of Lewis, who owned the remaining 20%, continues in that position following the acquisition, having entered into a new two year service contract, and will report to Renew's Engineering Services Director, Paul Scott.
(CD/JP)
