Renold Share Discussion Threads

[davidosh] 18/4/2024 10:35

melody9999.....Well done for organising and hopefully Renold will join us at Mello2024 next month too.

[melody9999] 18/4/2024 09:22

Meeting at RNO yesterday was positive. I'll post some detail later.

[this_is_me] 17/4/2024 16:47

More than recovered the March drop.

[greenknight1] 17/4/2024 16:38

Lovely move today. Still further to go. So undervalued here.

[davidosh] 17/4/2024 16:34

The share price is on fire this afternoon....Is that linked to the Signet investor site visit I wonder?

Any reports from on site?

[bubloo] 15/4/2024 22:24

some funds who brought in 20's selling as they have virtually doubled. hence Renold has high weighting in these funds. hence top slicing. expect some more selling before it settles in the mid thirties

[sausage7] 15/4/2024 21:13

So an interesting and encouraging review of Renold on BASH this evening. The poll of viewers came out at Buy 72% Hold 17% Avoid 9% Sell 2%. With such a Buy % a point not raised was who is selling? Intriguing. A company in strong recovery.

[greyingsurfer] 15/4/2024 16:26

Plus the pension deficit is coming down. Not sure what it was in 2007.

But resumption of dividends, when it happens, will potentially shift the valuation. I saw posted on X this morning an unattributed set of forecasts which showed a dividend being paid in 2025. If correct thats not far away.

[sausage7] 15/4/2024 15:36

Have signed up, thanks for the note DD

[davidosh] 15/4/2024 14:48

Now the trading update is released Renold will be reviewed on the BASH this evening

Mello BASH (Buy, Avoid, Sell or Hold)



Do join

[greenknight1] 15/4/2024 13:16

Revenue will be grown via "value accretive acquisitions". As long as they maintain margins through integration, this will continue to grow nicely.

[davidosh] 15/4/2024 13:12

I guess the most important question is how much higher can these earnings go. Renold will continue to get re-rated steadily if this 20% growth in profits can continue and it also looks like a dividend is on the cards.

The broker says...

We raise our Target price from 58p to 65p, offering significant upside with the shares trading on a P/E of 5.9x, which looks too low given recent upgrades and sustainable cash flow improvements.

That is more than 50% higher than where the share price is now and the order book is not discretionary spend as these are critical engineered items

[sausage7] 15/4/2024 12:24

Thanks for the note Essential. What I am driving at is the rating on this company and many others which investors ascribe. There has been a general derating on UK listed companies making them vulnerable to take over/take private. Renold which is clearly having a renaissance in its fortunes is a victim of this investor neglect. Let’s hope we and they continue to make progress.

[essentialinvestor] 15/4/2024 12:06

Just for a bit of context ..

the RNO share price traded around 60 pence in early 2006. It then climbed rapidly in to the spring/summer, 2007 - the pre GFC peak.

In FY 2007, adjusted EPS of 8 pence a share. Debt under £20 million.

So although I fully accept the point on arguable undervaluation, at the same time earnings have 'not increased' in 17 years. They are effectively now at 2007 levels.

The above is obvs being Highly selective with dates, you could equally look at more recent progress, etc.

[sausage7] 15/4/2024 11:24

I am not aware of such

[greenknight1] 15/4/2024 11:10

Has there been any dilution since 2007?

[sausage7] 15/4/2024 10:10

Welcome news indeed this morning. Let’s put this announcement in context. 2023 saw the Renold statutory operating profit come in at £22.9m. Stock price after today’s statement that it should be 20% ahead, 43p. In 2007 the operating profit was £9.8m, stock price 110p. Renold is symptomatic of the aggressive derating across all UK smaller companies and is currently too cheap for its own safety. This like many other companies we have seen recently is in danger of being taken out by private capital. A sad reflection on the attitudes of the institutional fund management community to genuinely world class smaller UK companies.

[this_is_me] 15/4/2024 08:05

Great news! "The results for the full year are now expected to be materially ahead of current market expectations1, with adjusted operating profit approximately 20% higher than the prior year, driven by a further improvement in margin."

Those who sold in March have lost out.

[davebowler] 15/4/2024 07:48

Cavendish The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as management actively seeking EPS accretive acquisitions. We raise our Target price from 58p to 65p, offering significant upside with the shares trading on a P/E of 5.9x, which looks too low given recent upgrades and sustainable cash flow improvements

[c3479z] 15/4/2024 07:32

looks as though operating profit will be about £1m, 5-10% ahead of expectations?

[wigwammer] 15/4/2024 07:27

Great stuff... rapidly paying off the cost of the acquisitions... "Strong cash conversion, and careful management of working capital has resulted in a year end net debt position of £24.9m (31 March 2023: £29.8m and 30 September 2023: £28.3m)"

[chrisdonohue] 13/4/2024 13:41

Following the recent large fall, it seems that those who wished to sell have already done so and the prospects of a recovery to the more reasonable prices it reached earlier in the year look promising. Part of the reason for the large fall may have been selling before the end of the tax year, which has now passed. What happens when a significant number of weak holders sell is that peoples' stop losses are repeatedly triggered and a small fall gathers an unstoppable momentum. The fall does not appear to have been triggered by any concrete events or any significant change in the company's prospects. Time to hold on until the damage has been fully reversed.

[pj84] 12/3/2024 21:52

I have previously posted the post below that I made on the Wincanton thread before the recent takeover and whenever the next triennial review of the Renold pension fund happens I expect we will see that the pension issue has disappeared or significantly reduced.

I continue to believe Renold is undervalued and am more than happy to continue to hold.

PJ84 26 Sep '23 - 09:01 - 2492 of 2543 Edit



some excerpts from the article: -

"It was the stock market surprise of the week: Wincanton, the trucking company, delighted investors on Wednesday by announcing that its staff pension scheme had dramatically swung back into surplus for the first time in decades.

The company would not now have to make previously promised contributions to the scheme of about £25 million a year for the next four years. And it was immediately released from restrictions on how much it could pay shareholders in dividends."

.....

"Like many UK companies with long histories, Wincanton had been the prisoner of defined benefit pension promises going back decades. It has a market value of about £400 million but until recently its pension fund was three times bigger with about £1.2 billion of outstanding promises to 12,800 current and former lorry drivers and warehouse workers."