Renew Share Discussion Threads

[wfcreserves] 09/12/2020 12:55

Addendum to 9315
I also remember a former chairman (when it was still Y J Lovell) saying at an AGM "The Americans saw us coming". If I remember rightly it was when Sellier was CEO. He never had much to say at the AGMs leaving it all to the chairman of the meeting to explain the dire consequences.

[wfcreserves] 09/12/2020 12:48

@Jeff H
I received the following from the company after enquiring about the USA situation in 2013.
"Lovell America, Inc., our USA subsidiary, still owns some residual land interests in Maryland and our strategy is to realise the value of those land interests without making any material investment into the USA. You will be conscious that the last few years have not offered a good economic climate for land realisations in the USA or indeed in most countries. Some of the land parcels are going through the long process of obtaining zoning and planning permissions. The results of the USA business are consolidated into the Group accounts and the USA land values are included in Stock and Work in Progress. The USA business only employs 3 staff."

Hope that helps.

[rivaldo] 09/12/2020 09:17

One of the more surprising snippets from yesterday's results was the small remaining Specialist Building division, which actually saw its order book soar to £89m, from just £39m a year ago. I'd have thought this was an ideal candidate for disposal.

News from QTS - the introduction of a new, improved Mega Chipper - "the world’s largest and only rail-mounted chipper" :o))

[wind dancer] 09/12/2020 09:03

Property has been a bogey sector for the company more as a matter of principle it seems rather than the rational pursuit of the synergies it brought to its building abilities. The Renew business has certainly down played the significant contributions made from its now closed UK property development activities.

[jeff h] 08/12/2020 22:53

mattboxy - back in 2014 Renew sold Allenbuild for a cash consideration of £2.75m plus the "benefit" of 10 outstanding uncompleted contracts. Since then in the financial and restated financial statements for the following years in the region of £20m of losses have been incurred although as long ago as 2016 it was mentioned that all the Allenbuild contracts had been completed on site.

Now 6 years after the original disposal another £5m+ of discontinued operations losses have been booked and excluded from the headline adjusted EPS etc.

There is no guarantee more losses for the Allenbuild business will be incurred in future years.

No losses were booked in the 2017 accounts with the FD resigning shortly after. The following year in the 2018 financial statements 2017 figures were restated to include more Allenbuild losses.

Draw your own conclusions about the above.

I lost track now but was the property in the US ever sold? Can recall it being written down by a few million, not sure if this is the £1.5m Assets Held for Resale item on the Balance Sheet.

[wind dancer] 08/12/2020 18:51

The allenbuild legacy almost bust the Montpellier business.The board were latterly far too slow to deal with its southern operations.Provisions are possible in the current year unless they have been aggressive in this assessment.
An absolute focus on Engineering is the way. Sell the underperforming building activity, it possesses all potential negative attributes of Allenbuild.
Like wise the land remediation business which lacks the turnkey abilities of its competitors.

[mattboxy] 08/12/2020 14:38

Jeff please explain? I know very little about this issue.

[rivaldo] 08/12/2020 10:32

Bouncing back nicely - looks like buyers are hoovering up the traders' shares.

[jeff h] 08/12/2020 09:03

The Allenbuild provision is a disgrace - and that is coming from someone who has held since buying at 32p

[wfcreserves] 08/12/2020 08:13

Record results but overall dividend cut is a bit disappointing. Future prospects look good but legacy issues still ongoing. At least the ill fated American venture, which was the final nail in the coffin for Lovell as was, has finally been ended.

[igoe104] 08/12/2020 08:11

I hate traders with a passion, make shares too volatile...

[igoe104] 08/12/2020 08:10

Looks like traders jumping ship, get this alot of results day. Regardless how good they are.

[babbler] 08/12/2020 08:09

So it drops... Lol

[rivaldo] 08/12/2020 07:30

Excellent results given the pandemic - the £39.6m operating profit is at the top end of the expected range, and is well ahead of the (recently increased post trading statement) consensus forecast £38.8m.

The 41.2p adjusted EPS is also nicely ahead of consensus forecast 39.9p EPS.

Most importantly, the order book looks terrific at £692m, hugely up from the prior year £581m (which excluded Carnell). Great to see RNWH with net cash now too (though with deferred VAT to pay).

Lots of highlights, but some include:

- "Trading in the new financial year has started well"
- RNWH are now an important wireless/5G play:

"Delivering all aspects of wireless telecoms infrastructure, including 4G and 5G deployment, maintenance and decommissioning services, we have long-term relationships with all the main UK network operators, equipment vendors and managed service providers. In the period, we have seen a significant increase in work across all our frameworks as the 5G roll-out programme accelerates. We were awarded positions on both Telefonica's and MBNL's new three year 5G services frameworks as well as a contract to deliver Telefonica's microwave services for the next two years."

- water, nuclear, rail, highways....these are all areas with huge government-backed infrastructure spending laid out for the next 5 years under CP6, AMP7 etc

With all sectors now recovering, Carnell fully consolidated for the year and Sellafield coming back in H2, we could perhaps see 48p-50p EPS this year.

A shame about the additional Allenbuild provision, but overall prospects are terrific - and the narrative suggests a continued likelihood of further acquisitions soon.

[iandippie] 08/12/2020 07:28

The Board remains confident that Renew is strongly positioned to play a significant role in the long-term recovery opportunities that will emerge across UK infrastructure, a sector that will play an important role in rebuilding the economy over the next decade and beyond.

[nw99] 08/12/2020 07:14

Looking good

[wad collector] 07/12/2020 13:09

I like to see a share price creep up on pre-results day.

[wad collector] 07/12/2020 10:13

What on earth do you mean?

[wfcreserves] 07/12/2020 09:43

Yes we can all bank on this government’s commitments can’t we?
Sure?

[rivaldo] 07/12/2020 07:22

Shore Capital say Buy, with a 600p target which is likely to be increased soon:



"‘Buy’ Renew to play UK infrastructure, says Shore Capital

Renew (RNWH) offers a way for investors to benefit from the UK government’s pledge to invest in infrastructure, says Shore Capital.

Analyst Tom Fraine retained his ‘buy’ recommendation and ‘fair value’ price of 600p on shares in the engineering company, which were trading at 542p on Thursday.

Fraine is expecting to increase his 2022 free cashflow forecast by 25% to £26.1m, which implies a 6.5% yield and ‘slightly upgrade’ to his target price.

‘We believe, despite the recent share price appreciation, Renew represents a good opportunity for investors to benefit from the UK government’s commitment to invest £640bn in infrastructure over the next five years,’ he said.

‘We believe the market overestimates the group’s risk profile, possibly due to its associations with peers that service much larger, fixed contracts than Renew’s.’"

[dennisbergkamp] 06/12/2020 11:13

Thanks Bagpuss,

No surprises in the future

D

[bagpuss67] 06/12/2020 10:40

Hi. They have done a buy in. That means the scheme has its self effectively insured, in this case, all its obligations to the members. The next step would be to buy out the scheme and provide each member in their own right that assurance from the buy out provider

This means not future exposure to funding volatility and crucially no more deficit repair contributions hence a positive impact on FCF..

[dennisbergkamp] 06/12/2020 10:27

Harrogate,

Can you summarise the pension announcement?

Tia

D

[harrogate] 06/12/2020 08:15

I think the market has underestimated the impact of the pension announcement last week. On a cash flow basis at 12 x it surely is worth about 75p on the share price. I couldn't see any broker notes on it but maybe the notes after the prelims next week will include the impact. It should lead to either a jump in the dividend and / or the ability to fund larger acquisitions without dilutive share issues.