Renew Share Discussion Threads

[mayers] 04/4/2023 19:16

Hmmh Descending channel with lower highs and lower lows despite the enthusiastic support as ever here. I am well represented but not emthused to increase. I suspect the enthusiasm has always been in the price and am not enamoured by the house brokers.

[rimau1] 04/4/2023 16:44

Almost time to top up the forever holding.

[pugugly] 04/4/2023 14:11

Looks as though Mr Market not too happy with brokers targets. Currently marginally down while indexes at the moment marginally up.

[rivaldo] 04/4/2023 12:13

Numis say Buy and also have a 900p target:

"RENEW (BUY 900p). H1 trading update.

Renew has issued a brief, reassuring trading update indicating that trading in 1H23 was in line with management expectations. We therefore make no forecast changes. The statement notes that the order book position, underpinned by long term framework positions, is expected to be similar to that reported in the AGM update (Engineering Services order book £758m at Dec-22 versus £717m at Sep-22). The business continues to successfully manage inflationary pressures and supply chain challenges. It also notes that Enisca, acquired in Nov-22 is integrating well into the Group and is trading in line with expectations.

The shares trade on a +12m PE of c.11.5x and EqFCF yield of c.7.5%. Given the Group's track record of compounding organic growth and accretive M&A, its strong balance sheet, and high ROIC, we believe the shares merit a premium rating relative to sector peers."

[rivaldo] 04/4/2023 09:07

Peel Hunt retain their 900p target and say Buy:



"Peel Hunt: Renew a ‘key buy’

Engineering group Renew (RNWH) is not only a cash compounder, but it has ‘meaningful’ opportunities to consolidate its fragmented market, says Peel Hunt.

Analyst Andrew Nussey retained his ‘buy’ recommendation and target price of 900p on the stock, which softened 0.5%, or 3.7p, to 672.4p yesterday.

First-half 2023 results from the group showed ‘positive operational and strategic momentum’ and there was ‘no surprise within the commentary’, said Nussey, who also noted the ‘good cash generation’.

A confident outlook was ‘underpinned by proven, specialist capabilities, well bid order book, and leadership in structurally attractive markets.’

‘Renew continues to demonstrate highly attractive cash compounding metrics afforded by its focus on essential engineering services to UK infrastructure,’ said Nussey.

‘Moreover, there are meaningful opportunities to consolidate highly fragmented markets. The shares remain a key buy on 11.2 times September 2023 earnings per share given the growth outlook and balance sheet strength.’"

[lammylover] 03/4/2023 16:08

Market just seems to be controlled by algo trades at the moment. Batting price around within a range to create some volume of trades.
However there must also be a fund selling in the background, as each day there's loads of larger ordinary share buys, which don't move the price upwards, as you'd expect.
I'm expecting it to breakout of the current range (below 700p) as soon as seller is done.

[harrogate] 03/4/2023 15:42

In these markets you need ahead statements to move the price. I am pretty sure they will beat this year but it will be much later before they announce that. In the meantime we could do with a deal. The reduction in EPS in the current broker numbers for future years due to the corporation tax increase coming through is not helpful.

[wad collector] 03/4/2023 15:30

An upbeat kind of inline statement , but not an enthusiastic response from the market. Those heady £8+ days of 2021 seem a while ago. On the positive side, a buying opportunity remains , though I have far too many for a balanced portfolio and they do say never fall in love with a share.

[rivaldo] 03/4/2023 07:21

Agreed - as positive as one could hope for at H1's close and in the current economic environment.

RNWH's P/E is barely above 11 despite the huge growth likely in so many of its sectors, the confidence in the outlook and strong order book shown today and despite RNWH's impeccable record over so many recent years in either beating or meeting expectations.

And as rimau says there's a definite possibility of another acquisition given the rising cash pile.

With that healthy forward outlook "underpinned by long-term framework positions" it's about time RNWH were given credit for their secure position within UK infrastructure and their consistent long-term performance, and re-rated accordingly.

[rimau1] 03/4/2023 07:03

Nice positive update, very Renew like. Maybe an earnings accretive acquisition in H2?

[igoe104] 28/3/2023 16:18

Good positive talk from schroders about RNWH. (Starts about 19 minutes in)

[rivaldo] 24/3/2023 11:28

I'd be very happy in the current environment with meeting expectations.

With consensus of around 60p EPS to this September, and a forecast £32.9 cash pile, RNWH is getting better and better value at these levels.

Broker targets of 900p-950p are fair imo, especially as Shore Capital can see "scope for revenue upgrades" and there's ten months of last year's Enisca acquisition to be included.

[wfcreserves] 24/3/2023 10:08

Trading update due 3rd April. Will it be just another “in line with management expectations” one?

[rivaldo] 21/3/2023 10:00

Good spot tanneg - here's a link:

[tanneg] 17/3/2023 16:40

J Brown part of this 5 year framework award,

"Thames Water has appointed six contractors on the first lot of winners made public under its Waste Network Services framework.

The £139m Lot 5 deal covers high value proactive and reactive emergency repairs on both the gravity and pressurised wastewater network across the Thames Water Utilities operations area.

The six winners are Barhale, Cappagh Contractors, Clancy Docwra, J Browne, McAllister Bros and Morrison Utility Services."

[wfcreserves] 13/3/2023 13:18

@ Rivaldo

Guess it's how long you are prepared to wait for the market's appreciation of the company and the resulting capital gain whilst receiving low yield dividends?

[rivaldo] 10/3/2023 07:25

Cheers chaps. Wfc, I'd far rather see capital growth and gains than dividends since capital gains are taxed relatively lightly and the rewards are potentially so much more.

I see from today's RNS that option expiries led to obligatory selling of 161k shares by directors to cover the resulting immediate tax liabilities. That's all fine and understandable except for Liebenberg, who sold the entire resulting 75k. He must be getting divorced :o))

At least now we know why the recent decline to 680p or so has occurred.

[rimau1] 09/3/2023 13:08

Thats interesting from Peel, thanks for posting Rivaldo. I have held HILS and Renew for a few years now and don’t see them as peers or easily comparable. I find HILS is a more cyclical play (roads/construction) with an exciting large US division hence the deserved premium rating. Renew as we all know is stickier critical UK infrastructure, slower and steadier. I sleep easier at night with Renew. HILs is volatile.

[wfcreserves] 09/3/2023 11:24

I don't disagree with much you say Rivaldo. Renew is by far my largest shareholding and I am similarly sanguine about future viability.

What sort of dividend yield would you hope to receive on a target price of say £9 which has been touted for many years now? Are you willing to accept relatively low yields now for capital gains further down the line.

[rivaldo] 09/3/2023 07:22

New support for RNWH from Peel Hunt, who in analysing Hill & Smith's results yesterday see RNWH as a much better bet:



‘The (Hill & Smith) shares trade on 16 times our upgraded full-year 2023 earnings per share forecasts… and now appear to be fairly valued. We downgrade our recommendation… following a strong recent share price performance, and see more upside for Renew, which is considerably cheaper despite generating higher returns on invested capital, higher historic earnings growth, and having a lower risk profile.’

[rivaldo] 08/3/2023 09:40

:o))

Wfcreserves, I'm quite satisfied with RNWH's share price performance over the last couple of years, i.e a rise of around 30%-35%. Especially when compared with the rest of the market. Particularly seeing the many, many companies whose shares have collapsed (i.e just yesterday WIN, SPT etc), even recent flat performance can't be complained about. And I just received a lovely chunky dividend too.

I said the following on the SUR thread recently. Sometimes you just have to accept that there are sellers out there, probably funds/institutional, who wish to take profits/need cash for redemptions/see opportunities elsewhere/change fund managers etc.

Take comfort from the fact that most people agree that RNWH are undervalued, and relax. It's likely imo that after this extended consolidation phase RNWH will go on another run upwards.

This year's H1 trading update will be on 3rd April, so only around 3 weeks away now. Hopefully there will be a nice run up before and after it given the recent AGM statement:

"Trading for the first quarter of the year has continued in line with the Board's expectations. The Group order book at 31 December 2022 was 861m (31 December 2021: 742m). The Engineering Services order book stood at 758m (31 December 2021: 687m)."

"We are pleased with the momentum within the Group. This, combined with the structural growth drivers in our regulated infrastructure markets, give us confidence in the year ahead."

I'm sleeping very easily with this stock.

[wfcreserves] 07/3/2023 12:36

The market are not apparently taking kindly to all your good news Rivaldo.

Have you any idea why?

[rivaldo] 06/3/2023 12:25

Good news from Friday - the first ever framework wins with Welsh Water for Enisca through to 2027 at minimum:



"Enisca awarded Major Mechanical & Electrical Frameworks

3 Mar 2023

Enisca are delighted to have been successfully appointed to Dŵr Cymru Welsh Water (DCWW) Major Mechanical and Major Electrical Frameworks.

These frameworks will support delivery of works and services from feasibility, through Early Contractor Involvement, to design, construction, commissioning, and handover throughout the DCWW operating region. The contract will run until 2027 with an option to extend for a further 3 years.

Conor King, Managing Director said “We are delighted to have secured these frameworks, our first with Dŵr Cymru Welsh Water. We look forward to working closely with the Welsh Water team, delivering the programme of works and customer environmental and wider sustainability outcomes in our cost efficient and collaborative manner.”

Dŵr Cymru Welsh Water provides water and sewerage services to over 3 million people living and working in Wales as well as some adjoining parts of England. DCWW serves 1.4 million households and businesses, operating 66 impounding reservoirs, 63 water treatment works and supplies an average 828 million litres of water every day through a network of 26,500km of water mains. DCWW also collects wastewater (and surface drainage) through a network of more than 30,000km of sewers, incorporating 1,912 sewage-pumping stations and 3,200 combined sewer overflows. It is treated at 838 wastewater treatment works."