Renew Share Discussion Threads

[rivaldo] 16/10/2020 07:23

Good to see a new article on Stockopedia assessing RNWH as a "high quality" stock with a good Piotroski score and a "cheap" valuation: Https://www.stockopedia.com/articles/why-quality-and-value-might-be-key-drivers-of-the-renew-holdings-share-price-133063/ "The Renew Holdings share price has moved by 8.45% over the past three months and it’s currently trading at 482.56. But what's interesting about this share is its potential exposure to the influential profit drivers of high quality and a relatively cheap valuation.... ....One of the quality metrics for Renew Holdings is that it passes 6 of the 9 financial tests in the Piotroski F-Score. The F-Score is a world-class accounting-based checklist for finding stocks with an improving financial health trend. A good F-Score suggests that the company has strong signs of quality..... .... As a percentage, the higher the Earnings Yield, the better value the share. A rule of thumb for a reasonable Earnings Yield might be 5%, and the Earnings Yield for Renew Holdings is currently 7.01%. In summary, good quality and relatively cheap valuations are pointers to those stocks that are some of the most appealing to contrarian value investors. It's among these shares that genuine mis-pricing can be found. Once the market recognises that these quality firms are on sale, those prices often rebound."

[wad collector] 09/10/2020 13:31

Looks like this is finally being noticed by the market as £5 approaches again.

[rivaldo] 06/10/2020 13:48

VHE have been contracted to start major works at this large project designed to "transform the 740-acre site in to a new sustainable development that will comprise up to 3,890 homes, shops, restaurants, a primary school, and leisure and community facilities including parks and 310-acres of green open space": Https://www.vhe.co.uk/blog/2020-10-01-vhe-commence-work-at-waverley-riverside "VHE commence work at Waverley Riverside 01 October 2020 VHE have commenced work at Harworth Group plc impressive Waverley Riverside project in Rotherham. This will include the delivery of earthworks and infrastructure work providing surface water and foul drainage, a highway into the development, a headwall into a lake and gabion basket works adjacent to the river."

[robow] 05/10/2020 13:58

thanks for posting Rivaldo

[rivaldo] 05/10/2020 12:37

Since the new issue of SCSW is now out, here's some extracts from the big Buy tip which was in the last issue. SCSW are aiming for a £10 share price in the next couple of years. Remember this was printed before the trading "materially ahead of current market expectations" update and subsequent upgrades last week: Https://www.scsw.co.uk/article.php?id=8623 "Renew - Expecting a COVID-19 bump up (Sharewatch) Engineering services company Renew, led now by chief executive Paul Scott, is sailing majestically through COVID-19. When I caught up with Scott back in June, Renew’s first half results had set new records for sales, pretax profit, earnings and operating margins. These results had covered just a couple of weeks of COVID-19 but brokers suspect that the disruptive impact on forecast earnings is only 10-15% for the full year, with Renew’s Engineering Services side proving to be resilient in the face of COVID-19 because much of what it is doing is maintenance and renewal and its clients do not have the option to stop the work. Around 80% of Renew’s activities continued even throughout the worst of the crisis. The Rail and Highways sectors account for most of the activity, and both Highways England and Network Rail have been taking advantage of the quieter roads and rail lines during the lockdown to perform essential works. Water and Telecoms (5G) are also deemed critical works and these too remained operational. Only the Nuclear bit has sites still closed. According to Government figures, construction had the largest proportion of workforce returning from furlough leave and Renew is “shovel ready” to benefit from Boris’ infrastructure spending blitz. I also think there is the chance of a real COVID-19 bump to present forecasts and the shares could in a couple of years be making an assault on £10. Directors were buying last month." "Mostly maintenance and renewal works As will become apparent here, across each of the divisions, the majority of the group’s revenue is from infrastructure maintenance and renewal programs ultimately driven by public sector spending, limiting its cyclicality and providing a degree of assurance that it will meet forecasts. The typical value of Renew’s contracts are £10m for renewal schemes and £10k for maintenance services. All sides share similarities as they get much of their work in the form of framework agreements let by the regulated sectors. Renew’s markets therefore have stringent safety demands, meaning it is imperative that key clients trust it, which acts as a major barrier to entry. Despite a reasonably high level of competition in the markets that Renew competes in, it is rare for its contracts to not be renewed upon completion. Renew had a strong order book of £591m at the end of March supporting the £600m turnover forecast for the group in the current year to end September. As it stands, Renew's specialist engineering division's forecast sales of £553m this year (with a combined margin of 6.8%) splits between these areas: • rail (50%); • infrastructure - telecoms & highways (19%); • energy - nuclear and power stations (16%); • environmental-water & land remediation (15%)." "Buy ahead of 1 October update One unexpected benefit coming from COVID-19 is that the public sector organisations have also been much faster than usual to pay their bills, which has meant net debt is also coming in better than expected and by the year end is expected to fall to £4m - for a net debt/EBITDA of 0.1. Meanwhile there are also further efficiencies coming through to boost margins and a small acquisition in energy transmission also looks likely before long. Even without such deals, analysts are looking for profits to rise to £36.2m/eps 38.9p for a prospective PE of 11.1, dropping further in the following two years, if profits continue to rise to the tentatively forecast £39.9m/43.2p and 41.8m/44.9p."

[rivaldo] 05/10/2020 09:05

...and now buying coming in at the full 480p offer.

[rivaldo] 03/10/2020 07:35

Excellent finish on Friday night, which hopefully bodes well for next week.

[wad collector] 01/10/2020 10:29

That could be a fraudulent note Rivaldo ; Donald would suspect it :-)

[rivaldo] 28/9/2020 22:51

Absolutely sure - it was copied as is and sent to me by a trusted source, dated 25th September 2020 and with the 593p target price. Probably as a Flash Note update it doesn't register on the site as a full update. To prove it, I've included below the Key Data and contact info which I omitted last time as unnecessary: "finnCap Company Flash 25 September 2020 Renew (RNWH) : Buy Support Services Resilient and reliable Key data Share price (p) 446.0 Target price (p) 593.0 Market cap (£m) 350.6 Enterprise value (£m) 356.1 Renew’s trading update at the beginning of September detailed trading since H1 results had been strong and ahead of expectations. We have upgraded our FY 2020 EPS by 8% and improved our net debt assumption from £10.5m to £5.6m (excluding finance leases, the group will be in net cash). Renew’s engineering activities in Rail, Infrastructure and Environmental markets have remained robust, with the majority designated as critical to the COVID-19 response. We continue to forecast dividend repayments to recommence with a final in FY 2020 (results due 8 December) and reiterate our view that there is no change to the long-term outlook. This is supported by the Government’s commitment to invest £640bn over the next five years, which is looking increasingly essential to restart and support the economy. Guy Hewett [e-mail] 020 7220 0549 "

[sharw] 28/9/2020 17:29

rivaldo - are you sure that was from finnCap? - I have just logged in to their site and a search gives the latest note on RNWH as in 2017! (27/11/17 target price 586p hmm.)

[igoe104] 25/9/2020 18:58

Got a feeling that statement, just might be good.

[harrogate] 25/9/2020 18:57

I doubt there will be a trading update next week as they have done one - earlier than normal. The next we hear will be 8th December when finals will be released.

[jeff h] 25/9/2020 18:16

Did not know finnCap covered Renew, thought it was Peel Hunt and Numis that covered it. Liberum also had a 490p price target for it back in June. Full year trading update next Thursday I think.

[rivaldo] 25/9/2020 11:56

Finncap have this morning issued a Flash Buy note on RNWH, headed "Resilient and reliable" (thanks mate). They have a 593p target price. They state: "Renew’s trading update at the beginning of September detailed trading since H1 results had been strong and ahead of expectations. We have upgraded our FY 2020 EPS by 8% and improved our net debt assumption from £10.5m to £5.6m (excluding finance leases, the group will be in net cash). Renew’s engineering activities in Rail, Infrastructure and Environmental markets have remained robust, with the majority designated as critical to the COVID-19 response. We continue to forecast dividend repayments to recommence with a final in FY 2020 (results due 8 December) and reiterate our view that there is no change to the long-term outlook. This is supported by the Government’s commitment to invest £640bn over the next five years, which is looking increasingly essential to restart and support the economy."

[rivaldo] 25/9/2020 07:30

Nice bounce yesterday. I'm sure value will out here soon - RNWH are simply too low at these levels. Given the "ahead of expectations" update the run up to the results in November should be interesting. I came across this flood defence contract for AmcoGiffen which will benefit September just before the year end, as part of a £32 million programme of flood defence works across Yorkshire: Https://www.miragenews.com/sheffield-river-maintenance-works-to-reduce-flood-risk/ "Sheffield river maintenance works to reduce flood risk The Environment Agency will be starting work in the river channel in Sheffield this month (September) to help reduce the risk of flooding in the city.... ...The Environment Agency has employed contractors AmcoGiffen to carry out the work."

[wad collector] 24/9/2020 10:21

It does remain an enigma , why the share price is not responding to a series of pieces of seriously good news. However , if you are long here, it is not a worry.

[deadly] 24/9/2020 08:31

Hasn't joined the market rise this week and fell 3.5% yesterday against the strong market. So an even greater bargain?

[igoe104] 11/9/2020 08:16

Also now HS2 Is kicking off, they should be a increase in revenue from that massive project as well.

[rivaldo] 11/9/2020 08:02

In the March interims, the Specialist Building order book had doubled to £99m (from £49m). This likely reflects both the work at Westminster and that medical build contract they won. The refurb works at Westminster are now forecast to cost around £6 billion. A reasonable share of that would be very material for RNWH.

[wad collector] 10/9/2020 10:19

Excellent , and not only will that be profitable , it is a flagship project that can only bring in more custom. Providing they continue do a good job and Guy Fawkes does not rejuvenate.... (anyone else remember the Lovell homes sand problem?) Looking at last yrs results , the specialist building division only made RNWH £0.9M profit (£37.7M whole group) so perhaps not that big a part .

[rivaldo] 10/9/2020 08:29

This news from July hasn't been posted before, but is quite significant imo. It shows that RNWH are a vital component of the huge restoration works needed at Westminster (via Water Lilly and Seymour Civil as main contractors). It perhaps also explains why RNWH haven't sold off Walter Lilly, as the works at Parliament will be massive over the next few years. And note that Walter Lilly have now been reappointed to carry out works on another courtyard: Https://www.walterlilly.co.uk/houses-of-parliament-restoration-project-reaches-finals-in-constructing-excellence-secbe-awards/

[rivaldo] 09/9/2020 10:31

Cheers. Their 590p price target is reasonable for the moment, but may be upgraded imo after the upcoming 30th September year end.

[bsdjj] 09/9/2020 08:45

Numis have upgraded FY Profit forecasts for FY20 (EBITA & PBT) by 7-9%. Target price 590p (unchanged).