Renew Share Discussion Threads

[robow] 17/12/2020 16:14

thanks Rivaldo for highlighting that

[rivaldo] 17/12/2020 09:01

A couple more interesting extracts from Shore Capital's recent Buy note with the 700p target - I'm glad to see that RNWH are likely to stick to their knitting as regards any near-term acquisitions:

"We upgrade our DCF-based fair value by 17% to 700p(35% upside) on higher forecasts and highlight the increased scope for acquisitions of more businesses set to benefit from the UK Government's commitment to invest £640bn in infrastructure over the next five years."

"Management has notedan increased scope for M&A with some larger peers seeking to carve out assets and some small, privately-owned businesses seeking a sale following the difficulties of operating during the pandemic. Whilst still seeking to enter the energy transmission & distribution markets in the medium-term, near-term acquisitions are likely to involve businesses in markets the group currently operate in"

[wind dancer] 16/12/2020 17:17

Going forward not too enamoured with digging trenches for Fibre either. Seems to be far from “ engineering “ with a very low barrier for entry.

[igoe104] 16/12/2020 16:38

Yep, they need to keep away from gas companies 🤦‍a94;️

[wind dancer] 16/12/2020 16:36

Amco was the catylist for Renews recovery without doubt.The jewel in the crown to which similar businesses can bolted onto or indeed replicated.
There have been howlers on that journey though!

[rivaldo] 16/12/2020 11:46

Excellent news - RNWH's AmCo have today won a place as a supplier (one of twelve) on a £200m Southern Building and Civils Framework from Network Rail:

[wfcreserves] 16/12/2020 09:01

@Wind Dancer
Good post. And I would also guess it takes a lot more effort to watch all those spinning plates as more get added?

[dr biotech] 15/12/2020 19:00

The point about Renew getting clumped together with other large construction companies is a valid one. I bought in here on the back of tip without making any worthwhile research - I'm sure I'm not the only PI to do so (given I have shares in about 20 different companies within different sectors the amount I can know about any of them is going to be somewhat limited). I do wonder how much the same would apply to any institutional holder. I know they have access to resources and people that we don't, but in the past I've read brokers reports that completely fail to understand what a company does.

Quite how Renew can differentiate themselves from other similar but different companies to earn a rerating is quite a conundrum.

[rivaldo] 15/12/2020 12:40

Excellent - and quick - bounce back. Hopefully showing that the MMs were trying to get some cheap stock in from activating stop losses and that there's decent demand out there.

[wfcreserves] 15/12/2020 12:23

Some strange trades going through. Perhaps MMs trying to drop price for buyers? Who would actually buy one share @507.52?

[mattboxy] 15/12/2020 11:59

Why the drop?Buying op?

[cwa1] 15/12/2020 08:20

Being a fool to myself, they can have mine for 675p :-)

[rivaldo] 15/12/2020 08:17

Shore Capital have increased their valuation of RNWH to 700p (from 600p) in a new Buy note, and they conclude:

"Mispriced:

At 12x our conservative EPS forecast,Renew remains considerably undervalued, in our view, possibly due to its associations with peers that service larger, fixed contracts. Consistent with previous years, c.70% of our current year forecast is already in the order book, which comprises of a very high volume of small, low-risk, cost-plus contracts. We believe Renew’s ESG credentials (including being one of the 86 issuers that the London Stock Exchange recognises on its Green Economy Mark list) will support a share price rerating."

[wad collector] 14/12/2020 08:33

Looking very long term , the announcement about Sizewell C will be good for the decommissioning business. Gotta commission it first though!

[rivaldo] 11/12/2020 09:52

This new article out today reads rather well re "huge demand".....



"QTS in Penrith has hired seven recruits

National rail contractor, QTS Group, has recruited seven new employees at its Penrith office, bolstering its team across the UK to nearly 500.

The group has experienced huge demand for its specialist services in rail engineering, infrastructure and training throughout the pandemic.

The Penrith site has hired cover yard maintenance and plant operatives, as well as site managers and team leaders.

Since June, the firm has recruited 70 people across all its UK locations, including Nottingham, Leeds, Preston, Strathaven and Wiltshire....

.....Alan McLeish, managing director at QTS Group, said: “It has been really positive to see an increased demand nationally for our services in what could have been a challenging time. To meet this demand, we have made a significant number of hires at our UK locations which will support us across all areas of the business."

[rivaldo] 10/12/2020 11:21

Good to see Seymour Civil working with the local college to train skilled labour for the "digital telecoms sector".

I would suggest that this provides an ideal pathway for Seymour Civil to gain work from the likes of City Fibre as below in upgrading the UK's digital infrastructure:



"One of the major employers for these future roles is City Fibre, which has a three-year recruitment and training programme to provide up to 10,000 people with jobs upgrading the UK’s digital infrastructure to full fibre, and plans to replace Middlesbrough’s copper networks with gigabit-capable full fibre optic connectivity.

The newly formed partnership aims to train over 100 learners in the next six months with the emphasis on providing career opportunities for Tees Valley residents."

[wfcreserves] 09/12/2020 22:55

There also seems to be some dispute over the writing off of a Britannia subsidiary British Building & Engineering Services and the Court ordered it to be reinstated in 2016 after it was written off in 2013.

Not sure how relevant this is now but it’s another legacy of the Gyllenhammar years.

[wind dancer] 09/12/2020 22:23

If there was indeed a cap we we know of it. It would have been clearly stated.

[wfcreserves] 09/12/2020 22:15

Regarding the US in the 2014 accounts of YJL (Overseas) there was a deficit of £24million. The company was dissolved in 2015 after Renew paid in sufficient as share capital to be solvent.

[wfcreserves] 09/12/2020 21:49

There must have been some sort of arrangement as Renew Nominees was the company secretary of Allenbuild until a resignation in 2016 according to Companies House filings.

[wind dancer] 09/12/2020 17:24

Sorry ...seller I meant to say.

[wind dancer] 09/12/2020 17:22

The Allenbuild sale agreement should surely have had a cap on a forward share of contract liabilities. Otherwise what keeps the purchaser honestly working towards the best outcome when the buyer picks up the bill?

[jeff h] 09/12/2020 13:59

Hi wfc. Thanks for your comments, you reminded me of an interview with the Directors from a few years back were the impression gave was that they had missed the boat with the US property, planning permission had expired or words to that effect. Ah from the 2013 Annual Report:-

"..In the USA, the Group has three remaining property assets where delays due to
economic conditions have led to detailed planning and zoning agreements expiring.
Outline permissions remain, however forthcoming changes to state and county regulations will require new applications to be made with the expectation of reductions in allowable building density. The Board commissioned an independent review of the Group’s US property assets and decided to write down the carrying value of two of these assets in the light of these new requirements and current market conditions by $8m (£4.9m)...."


In the 2018 report the Land value figure included in Inventories is zero and they say:-

"The comparative figure for land inventories related to land held in the USA. Following the sale of Horse Farm, and the remaining stock being fully provided against during the year, land inventory at the year end had no carrying value"

The £1.5m Asset for Resale I referred to above is an office property (UK presumably) which I think became surplus after a re-organisation a few years ago, you would have thought it would have been sold by now but it is still on the books at its estimated £1.5m value.

I rather hoped all these legacy items were water under the bridge but as the latest Allenbuild additional provision shows maybe not