Renew Share Discussion Threads

[ironstorm] 06/12/2019 10:05

Strong this morning too. If it stays this way today I think we are then on for 460p. Possibly quite quickly.

[rivaldo] 05/12/2019 22:40

Great to see a £57,000 buy at 441p at the close......

[ironstorm] 05/12/2019 22:27

Errr . . . Think if this starts well tomorrow jump on board.

[ironstorm] 05/12/2019 16:28

Looking good if it can get above that 440p level.

[rivaldo] 05/12/2019 14:20

Buying coming in at 434p now, and the bid price is up to 425p.

It seems that sentiment is at last changing for the better here. Deservedly so.

[rivaldo] 04/12/2019 11:14

Encouraging to see the bid price up to 410p, where it's not been for a while.

Online looks good too - you can only buy a maximum 6k at 420p, whilst you can sell 10k at 411p.

RNWH looks extremely undervalued now imho given the prospects, secure revenues and single-figure P/E.

[wfcreserves] 29/11/2019 12:03

@ wad collector

Since 1992? Just after the Higss and Hill failed reverse takeover bid? Add to that an unsuccessful incursion into the US led to sell off the most profitable housebuilding division along with the name Lovell (now doing well within Morgan Sindall) with a capital reconstruction before Gyllenhammar sorted out the bank's preference shares issue arising out of that.

Let's hope we don't have to go through all that again! Hiving off the house building divisions seem to be back in vogue though with Kier and Galliford Try seemingly facing similar problems that Lovell had back in that distant past.

At present Renew are looking a good long term enhanced earnings bet to me, with a current reasonable dividend yield, although the sector appears to be unloved by the market.

With that I shall retire (dis)gracefully, I don't normally comment on bulletin boards.

[gilesy] 29/11/2019 10:20

looks a good company with excellent long term prospects
bought in at £4.01 today

[wad collector] 29/11/2019 08:18

"grahamburn26 Nov '19 - 12:56 - 8934 of 8954

Think you're being a little bit optimistic about Johnson "abolishing inheritance tax".

He may have mentioned it in the past, but (a) it's not in the manifesto (so far as I'm aware) and (b) it wouldn't be an astute political move until such time as he deals with the other end of the tax scale (eg national insurance contributions and even the anomalies in universal credit."



Grahamburn , you are correct that there is no mention in the Tory manifesto of any IHT changes. Lot on infrastructure spending , if you believe any manifesto!

[rivaldo] 29/11/2019 07:29

Tipped overnight on Master Investor as one of three companies ready to bounce:



Conclusion:

"Overall, I believe that the shares look like a good bet, with management being a particularly good asset here. What’s more, the business is strongly cash generative, with a £16.6 million inflow from operations in 2018, and the current order book represents just over a year’s worth of historic revenues.

Notable growth opportunities come from Network Rail’s current Control Period 6 (CP6) five-year financial period, which has had £48 billion allocated to its budget, with an increase of around 25% in planned spending on operations, maintenance, support and renewals activities, compared to CP5.

Renew shares have slipped a few percent since the October trading update, which seems unfair given that it was in line and there were no negative points.

In September this year, analysts at Peel Hunt initiated coverage on the shares and slapped on a 500p target price, implying upside potential of 33%. Top management seems to agree with that view, with the chief executive, chief financial officer and another director recently splashing out a combined £50,000 on buying the shares."

[wad collector] 28/11/2019 16:08

I think this is a share for the patient and not one to trade . I had to hold for about 20 yrs from 1992 to get my money back first time!

[sharw] 28/11/2019 12:50

This frequently happens here. If you look at yesterday just 5 shares were put through the opening auction @ 395p which turned out to be the lowest trade of the day until 16 22 when it got back to that as a bid price.

[cwa1] 28/11/2019 12:44

Urmmmmmm...it comes from the SETS uncrossing trade at the start of trading today!

[wfcreserves] 28/11/2019 11:41

@Harrogate

I get that now but where did 420p the uncrossing trade come from?

[harrogate] 28/11/2019 10:19

That is SETS for you. Spreads and open and closing prices are not really what they seem at renew.

[wfcreserves] 28/11/2019 10:12

Weird opens at 420p (see chart above) which is one transaction of 6 shares said to be an uncrossing trade. The resulting published spread of 22p almost looks like a sign of discouraging would be punters who are not watching actual trades, which are nowhere near 420p,going through.

[rivaldo] 27/11/2019 08:57

Thanks for the IC Buy tip penpont. Let's hope this momentum helps clear any seller out.

More good stuff in the Yorkshire Post today regarding the huge opportunity in flood and water infrastructure. And Shore Capital have initiated and are very bullish:



"Renew says future floods could be prevented with investment

Engineering services group Renew Holdings has been busy working in South Yorkshire to help alleviate the suffering caused by the recent flooding and said future floods could be prevented with further investment.

The Environment Agency plans to invest £2.6bn in flood and coastal erosion risk management projects between 2017 and 2021. The agency estimates that an increase in average annual investment to around £1bn will be necessary each year until 2065 to sufficiently mitigate flooding risk in the UK.

Leeds-based Renew has welcomed the investment, having seen first hand the damage it can do.

Chief executive Paul Scott said: "Floods could be prevented with investment.

"We simply have to crack on. More money will be spent on flood mitigation and we see that as a growth area for the group.

"When an emergency happens, we are there looking at the health of the flood prevention measures. We are in there, making sure they are performing."

Earlier this month, communities in South Yorkshire experienced a month’s worth of rain in a single day.

Renew has a long association with the Environment Agency to deliver important maintenance and improvement works nationally through the Flood and Coastal Risk Management programme where it has framework positions in the North, Central, South West and South East regions over the next four years.

Elsewhere in Yorkshire, Renew recently won new contracts with Yorkshire Water, securing both lots on the £290m AMP7 Minor Civils Framework which will see it carry out engineering works to existing assets on operational treatment and distribution facilities for the next five years.

Mr Scott said: "The contract with Yorkshire Water commences in early 2020. We are looking at waste and clean water network renewal and maintenance.

"Networks are leaking. That is an obligation that all water companies have to solve it."

Mr Scott was speaking as Renew announced record results for the year to September 30.

Revenue rose 11 per cent to £601m and pre-tax profit leapt 84 per cent to £27m. The group benefited from the£80m acquisition of leading Scottish railway contractor QTS last year, but organic growth rose more than 8 per cent as well.

Renew said its critical infrastructure markets have excellent long-term prospects with growth driven by regulatory requirements. The firm works in areas where the Government, whichever political party forms it, has to spend money in crucial areas like rail, energy and water, where investment cannot be deferred.

Analyst Tom Fraine at Shore Capital said: "We initiated coverage on Renew with a 'buy' recommendation on November 15.

"Key to our investment case is our expectation that investment in transport infrastructure will continue to increase in the long-term as the Government seeks to achieve its net zero carbon emissions target by 2050.

"Renew is also very well placed, in our view, to benefit from growth in other regulated markets including water infrastructure, nuclear decommissioning, renewable energy and land remediation."

[penpont] 26/11/2019 22:02

@wfcreserves

Yes, you're right, must be a slip-up by the writer I suppose.

[wfcreserves] 26/11/2019 17:11

@ penpont

Shouldn’t those Peel Hunt adjusted pretax figures be for September year ends?

[wfcreserves] 26/11/2019 16:49

Thanks all for information. Let’s hope for slow burner.

[penpont] 26/11/2019 15:31

Tip update in today's IC:



Renew (RNWH) focuses on securing work on the non-discretionary spending programmes that maintain the UK’s critical infrastructure. Spanning the rail, telecoms, energy and environmental markets, the overwhelming bulk of the business is based in ‘engineering services’ – this now accounts for more than 90 per cent of group revenue and over 95 per cent of adjusted operating profit. Sales from the division rose by over a fifth to £565m in 2019, with accelerated activity at the end of the previous rail control period, CP5, driving 8 per cent organic growth. Adjusted operating profit also surged by 21 per cent to £39.4m, benefiting from a full year’s contribution from specialist rail contractor QTS, which was acquired last year.


Sustaining growth relies on being able to secure contracts on long-term framework agreements. The group won all the renewals frameworks it tendered for in CP6 as well as being awarded new positions – significant given that almost two-thirds of engineering services turnover is derived from rail activities. Expanding further into the wireless telecoms market, it also secured a new framework for MBNL to deliver EE’s 5G roll-out.

Peel Hunt anticipates adjusted pre-tax profit of £39m and EPS of 41.7p for the March 2020 year-end, rising to £41m and 43.8p in FY2021.


IC View
Net debt has more than halved to £10.2m and house broker Numis forecasts a small net cash position next year. Capitalising on long-term regulated budgets, Renew has avoided the uncertainty afflicting much of the construction sector, enjoying a high degree of revenue visibility. Activity levels in the first year of CP6 are said to be on track and further momentum could come as the group looks to enter markets such as highways and power infrastructure. Buy.

Last IC View: Buy, 388p, 15 Aug 2019

[rivaldo] 26/11/2019 15:17

Quite right sharw, I had a brief brainstorm trying to answer quickly! Cheers.

Brief but interesting commentary on Proactive from Liberum, who apparently expect RNWH to exit the Specialist Building business. If so, hopefully they can get a decent price for it given (1) Walter Lilly is a very well-respected, upmarket brand AFAICS and (2) it's been branching out and winning contracts in medical (for example) recently.

[harrogate] 26/11/2019 15:12

Does it make a difference that RNWH are on SETS?

[sharw] 26/11/2019 15:07

rivaldo - not so - the published figure is always the highest bid and lowest offer. However, as you point out, you can get a quote within the spread very often in small caps. This is voluntary for the RSPs - the formal quote is binding up to EMS, which is 750 for RNWH.

[rivaldo] 26/11/2019 14:36

The published figure is just an average of the MMs bid prices - but the actual trades show you what's really happening, i.e what buyers and sellers are really paying and receiving on the market.