Renew Share Discussion Threads

[igoe104] 26/6/2024 10:51

East Kilbride to Glasgow rail electrification work gathers pace.

ENGINEERS are to work ‘around-the-clock’ from July 19 until 22 to support the electrification of the East Kilbride to Glasgow railway line.

Network Rail will work alongside contractors, SPL Powerlines, Story, AmcoGiffen, Siemens, and QTS to deliver a range of works across the three days – which includes the installation of the remaining steel pile foundations between Busby and Thornliebank.

Overhead masts will also be installed at Busby Viaduct near Overlee Park and will continue throughout July before similar work begins along other parts of the route later in the year. Track side cabinets that power signalling equipment are being moved closer to the new Hairmyres station site and several metres of new cabling is being installed.

[igoe104] 26/6/2024 08:06

Nice framework for J Browne to be included in..


We are delighted to confirm that Browne has been awarded a place on the £167m FA1756 Non-Infrastructure Medium Projects - Runway 1 Civils Framework by Thames Water. 


All at Browne are delighted to be given the opportunity to extend the services we deliver for Thames Water. In AMP8 we will continue to apply our collaborative and agile approach to the successful delivery of this programme and our wider portfolio for Thames Water.’



 

[igoe104] 20/6/2024 12:38

I think the next 5 or so years will be very rewarding for RNWH. Water, road infrastructure, Rail maintenance, nuclear, and national grid upgrades are going to see massive spendture. I certainly won't be selling even though its been a multi bagger for me already. Lots more to come, I reckon. I love the recent acquisition, the NG will be spending billions upgrading their infrastructure. Very clever move by RNWH, to enter that market place..

[sharpedge7] 20/6/2024 10:39

It’s possibly my subconscious bias (being a holder) but it’s hard to think of a business which is structurally (politically too) better placed than this one, given the investment required in so many areas of UK infrastructure. Still not crazily valued despite recent big rise. DYOR.

[rivaldo] 19/6/2024 10:59

Amati UK Smaller Companies have now bought in per their May newsletter published last night:



"We introduced a new position, Renew Holdings, this month. Renew are a well-established engineering services group supporting critical infrastructure projects in sectors such as rail, water and environmental. It enjoys excellent long-term visibility supported by major spending commitments across its key sectors."

[rivaldo] 18/6/2024 11:33

Northumbrian Water have today announced that they're tripling their investment programme under the new AMP8 to 2030 to £3.6 billion.

And that they've appointed a number of companies to carry out this investment programme - two of which are RNWH subsidiaries, namely Enisca Browne and Seymour Civil Engineering:

[igoe104] 15/6/2024 11:13

RNWH is covered by investors champion, saying the new acquisition is a picks and shovels play on the national grid upgrades. (About 26 minutes in)

[rivaldo] 13/6/2024 08:20

More detail re Berenberg's latest upgrade:



"Analysts at Berenberg raised their target price on engineering services firm Renew Holdings from 1,250.0p to 1,200.0p on Wednesday following the group’s capital markets day last week.

Berenberg said Renew's CMD focused on growth opportunities in its existing end-markets, the collaboration efforts between operating brands within the group and reminded investors of where the M&A focus was for management.

The German bank also noted that following this "timely revisit" of the opportunity for the group, it was “pleasing” that Renew announced its third acquisition in the last 12 months – buying Excalon Holdings for up to £26.0m of consideration for underlying earnings of roughly £3.0m.

"The acquisition opens up the attractive, structural growth energy transmission and distribution market for the group, while adding yet another speciality to the group’s evolving stable of high-quality operating companies," said the analysts.

Berenberg, which has a 'buy' rating on the stock, updated its forecasts for the stock following the deal, increasing underlying earnings by approximately 4% in FY25 and FY26 and earnings per share by about 3-4%. On its revised forecasts, Berenberg said Renew trades on 14x FY24 price-to-earnings ratio."

[igoe104] 13/6/2024 07:54

11 quid approaching. 👊

[rivaldo] 12/6/2024 09:52

More analysts have raised their targets to 1250p or thereabouts today (from the news wires):

Berenberg raises Renew Holdings price target to 1,250 (1,200) pence - 'buy'

----------

Deutsche Bank raises Renew Holdings target to 1,225 (1,180) pence - 'buy'

[rivaldo] 12/6/2024 06:30

Peel Hunt have raised their target price by a full 100p to 1250p and say Buy:



"‘Buy’ Renew, says Peel Hunt

Engineering group Renew (RNWH) has made a new acquisition that will springboard it into an area of ‘strategic priority’, says Peel Hunt.

Analyst Andrew Nussey reiterated his ‘buy’ recommendation and increased the target price from £11.50 to £12.50 on the Citywire Elite Companies A-rated stock, which gained 0.6% to £10.80 on Tuesday.

It has acquired the UK electricity network sector specialist Excalon for up to £26m in cash, which Nussey said was a ‘highly attractive’ deal given ‘the valuable strategic positions, existing frameworks, and skilled workforce’.

He increased his full-year 2025 profit before tax from £71m to £73.3m and noted ‘the potential for outperformance via an earn-out mechanism’.

‘Renew has consistently identified the UK electricity sector as a key strategic priority,’ said Nussey. ‘Excalon looks an excellent springboard into a substantial and complementary market.’

However, he said the £22m of cash in the business means there are also ‘exciting inorganic as well as organic growth opportunities’.

‘We increase our target price… to reflect the accretion, as well as the favourable earnings mix shift,’ Nussey said."

[rivaldo] 11/6/2024 13:59

Excalon's latest accounts are a year out of date to 30/4/23, but are worth a look:

- at 30/4/23 Excalon had a £4.1m cash pile, making the acquisition even better value

- at that stage Excalon were making £1.9m operational EBITDA ; this is expected to improve to £3m per today's RNS, and judging by the factors which affected 30/4/23 and the very positive subsequent outlook this seems entirely possible

- "Commercial Pipeline forecasts for 2023/24 are exceptionally encouraging with key clients aggressively focusing on projects again and some key wins both with existing and new blue-chip clients. Gross profit increased due to several factors but primarily due to client and work mix being favourable relative to prior years"

- "As noted, the commercial sales pipeline of work for 2023/24 and beyond is ahead of expectations with the electricity and green energy markets showing unprecedented growth over a period aligned with the expansion of the fragmented UK infrastructure services market. Excalon are well placed within these sectors to continue our sustainable and controlled growth"

- also good to see that as with RNWH, framework contracts are protected by annual RPI contractual increases offsetting inflation and "new works tendering will remain unaffected by pricing based on new pricing indices"

[wad collector] 11/6/2024 13:56

If RNWH was main market it would now be capitalised at number 205 , in other words midrange in the FTSE250. Hope the management don't have such thoughts, as it would lose the AIM benefits for holders, but with new HMG coming next month the AIM rules may all change anyway. Hope not....

[igoe104] 11/6/2024 09:02

Lots of work in that specific area as the National grid are doing lots of upgrades... They have just recently raised billions via a rights issue recently.. so lots of money to spend..

[rivaldo] 11/6/2024 06:33

Indeed - looks very good and exactly as RNWH have been planning as regards electricity sector expansion:

- "immediately earnings-enhancing"
- material in size at £26m including decent deferred consideration dependent on the founder staying on and profit targets being achieved
- entry into another massive market for the upgrade of the grid that is required to support the UK's zero carbon generation and renewables sector
- once again, to hammer home the message per today's RNS, "targeting end markets where maintenance and renewals programmes benefit from long-term, non-discretionary funding programmes", since Excalon has "a number of long-term frameworks with electricity Distribution Network Operators ("DNOs") across the UK"

[harrogate] 11/6/2024 06:09

Looks a decent acquisition and a market they have been trying to get into for some time

[wad collector] 10/6/2024 12:10

Every tree on a 12m x 250000m corridor is a lot of vegetation, and a secure source of ongoing work! Shame about the ironic carbon cost though...

[rivaldo] 06/6/2024 06:44

Good to see RNWH spreading the word today via a Capital Markets Day for analysts and investors - there's a good story to tell:



Cheers igoe104 - here's a link to the Network Rail contract win. Note that this is just the first year of the programme and annual maintenance work will follow:



"Network Rail has started an extensive vegetation management programme to clear 250 kilometres of the Edinburgh-Glasgow and Borders railway lines.

The work is part of the first phase of a wider programme of vegetation management programmes across the Scottish railway.

Ayrshire-based QTS has been awarded a contract to deliver the first year of the programme, which will see trees and vegetation cleared up to six metres either side of the tracks on land within the railway boundary.

Following this process, the railway will undergo an annual maintenance programme to control vegetation growth."

[wad collector] 05/6/2024 21:51

The share price rise has rather diminished the effect of the Xd effect! 6.33p isn't going to make much of a dent in tomorrow's price. Not that I am refusing it of course...

[igoe104] 05/6/2024 18:57

Nice work for QTS from network rail.

[...]

Unfortunately the link won't work, no numbers issued but 270 km to clear banks at the side of the track in Scotland..

[rivaldo] 30/5/2024 07:27

The IC says Buy:



"The UK's need for infrastructure repair is a boon for Renew

Acquisitions have helped the company widen its reach ahead of new five-year framework deals

The UK’s creaking infrastructure may be a source of complaints among users of the country’s roads, rail and rivers but it is providing a steady stream of work for Renew Holdings (RNWH).

The Leeds-based contracting group reported a 13 per cent increase in operating profit for the six months to 31 March and has continued to convert most of this into cash. It finished the period with net cash of £42.5mn (excluding leases), up from £35.6mn at the end of September and £17mn a year ago.

The company has been something of a cash compounder in recent years and it has funnelled proceeds back into the business by making bolt-on acquisitions that have added either new capabilities or expanded its geographical reach.

Chief executive Paul Scott flagged Rail Electrification – acquired for £5.3mn in 2021 – as a business that, working alongside two existing rail businesses, has placed it in a much stronger position to win work on the industry’s latest five-year framework agreements. New budgets are also being set for the next five-year programmes to be carried out across the road and water networks, with spending on the latter likely to increase by 87 per cent based on current business plans.

Renew’s focus on maintenance work means it’s less likely to be affected if whichever party wins this year’s election decides to take an axe to planned capex schemes. Although its shares look quite pricey compared with contracting peers – they trade at 15 times earnings, having risen by 40 per cent over the past 12 months – its strong track record and resilient end markets suggest they remain good value. Buy."

[wad collector] 28/5/2024 21:49

Congrats on a 20 bagger! Doesn't look a bad time to sell , but I have been saying that for the last year.

[dozey4] 26/5/2024 16:57

Forced to top slice here, still leaving me overweight. First bought in at under 50p back in 06. Fantastic management to have navigated ups and downs sure footedly.
Hope they have a look at VANL where I have a small position: their specialisation on groundwork could broaden RNWI offering at early stage in many major capital projects forthcoming.