Renew Share Discussion Threads

[penpont] 30/11/2015 07:50

Thanks for the recent info rivaldo - here's ST's comment in the IC last week:

(RNWH: 362p), an Aim-traded engineering services group specialising in the UK infrastructure market, has issued top of the range results, a positive outlook statement and declared a robust increase in the dividend for good measure.
The board can certainly afford the 40 per cent hike in the payout to 7p a share, as the company ended the 12-month period to 30 September 2015 with net debt of only £4.8m, down 70 per cent year on year. Balance sheet gearing is now only 20 per cent of shareholders funds, and falling. Indeed, with the business cash generative and analyst Nick Spoliar at brokerage WH Ireland upgrading his fiscal 2016 pre-tax profit estimate by 8 per cent to £21.1m and lifting his EPS estimate by 10 per cent to 27.5p, then guidance is for the company to turn into a net cash position in the current fiscal year. Mr Spoliar expects the dividend per share to be hiked a further 12 per cent to 8p. On this basis, the shares are being rated on 13 times earnings forecasts and offer a 2.2 per cent dividend yield.
Importantly, those estimates are well underpinned by an order book up 14 per cent year on year to over £500m, buoyed by specialist hazard risk reduction work in nuclear energy, and at Sellafield in particular, and by renewable energy contracts with clients including E.ON, SSE and Scottish Water. The company has been winning a raft of infrastructure contracts elsewhere including one with Northumbrian Water, for sewage repairs and maintenance work, and for rail work where Renew Holdings is the national leader in engineering skills for works on tunnels and bridges.
For instance, Renew successfully carried out repair work on the Dawlish lower sea wall following last year's severe storms, which cut off rail access to south west England, and has subsequently won a contract to protect the coastal line at Saltcoats in Scotland. These awards helped drive both operating profit and EPS up by a quarter to £20.4m and 26p, respectively, on revenues ahead 12 per cent to £520m in the latest 12-month trading period, easily beating consensus estimates.
Renew's board is proving adept at generating organic growth, too”
In the circumstances, it's hardly surprising that investors have been warming to the shares with the price now in the middle of my target price range of 350p to 375p, having risen by 40 per cent since I recommended buying at 258p ('A small-cap break-out', 14 August 2014). I last advised buying at 315p ahead of the results ('Engineering ratings upgrades', 6 October 2015). Investors are likely to remain positive, too, because the board are on the look-out for more earnings accretive acquisitions.
Bearing this in mind, the company has completed six major deals since 2006 without seeking recourse to shareholders for funding. And with its key engineering services division, accounting for 85 per cent of turnover, posting 22 per cent underlying revenue growth in the fiscal year just ended, excluding the contribution from acquisitions, then Renew's board is proving adept at generating organic growth, too.
Reflecting the aforementioned earnings upgrades, and potential for earnings accretive bolt-on deals in the coming months, I am raising my target price range to between 390p to 400p, implying a rating of 14 times earnings estimates. It's worth noting that Renew's share price has just taken out its summer highs post this week's results and has given a swing and point and figure buy signal on the charts. It's one worth following and, on a bid-offer spread of 358p to 362p, I rate the shares a buy.

[rivaldo] 30/11/2015 07:37

Jeff, will you reproduce the article please - I don't subscribe.

I understand that Simon Thompson has a new increased price target of 400p.

[hvs] 28/11/2015 11:14

Not to mention the nice juicy divi to come in March.

[santangello] 27/11/2015 17:23

Thanx to Riv and me old Mukka Jeff for todays info and banter.All in all, a good week for holders, and a rosy future too.

[jeff h] 27/11/2015 16:29

riv - u not mentioned ST in today's IC either.... Are u not well??!

[hvs] 27/11/2015 16:01

No worries

The share price us travelling faster than the SHINKANSEN.

[volsung] 27/11/2015 16:00

That Queen guitarist gets about! Eclipses, badgers and now RNWH

[rivaldo] 27/11/2015 15:40

Apologies Jeff, must try harder :o)) I always forget about brr - will listen later, cheers.

[jeff h] 27/11/2015 14:27

Rivaldo think u slipping in your old age!...seem to have missed this:-

[rivaldo] 27/11/2015 14:06

£400m of electrification work in the North West alone should lead to lots of work for RNWH's Amco, as per this work in Heaton:



Extract:

"Amco Rail said significant work had been required on tunnels and bridges such as Ladybridge Lane to accommodate overhead line equipment.

In under two years, Network Rail has rebuilt 15 road bridges and four footbridges on the line between Manchester and Preston via Bolton, demolished one unused bridge and rebuilt the River Chor Aqueduct in Chorley.

It is hoped the the £400 million North West Electrification programme will improve travel across the region and improve connections from Manchester-Liverpool, Huyton-Wigan, Preston-Blackpool and Manchester-Stalybridge."

[rivaldo] 26/11/2015 07:40

A second institutional holding RNS late yesterday - Hargreave Hale (i.e Marlborough) are also increasing their stake here, going above 13% to almost 8.1m shares:



So Miton and HH are both now increasing and own around 19% between them.

[santangello] 25/11/2015 17:26

Still encouraging to see an addition by them.Good to see buyers piling in, before the respected media give column inches to the update on the short term.Nice to see Brokers posting anywhere between 395 and 425p as latest targets.

[grahamburn] 25/11/2015 15:23

A long while ago - well, September - so NOT due to statement.

[glaws2] 25/11/2015 15:08

Miton ups its holding

[hvs] 25/11/2015 10:43

And today as well.

Anyone seen any press comment ?

[santangello] 24/11/2015 17:21

Some chunky buying today.....and why not :)

[hvs] 24/11/2015 13:38

Thank you rivaldo.

Its looking very good.

Press comments will be JUST BRILLIANT like the results

[rivaldo] 24/11/2015 11:53

Numis have increased their target price to 390p (from 335p). Presumably they have increased their forecasts too:

[hvs] 24/11/2015 11:13

lol !!!!

lol !!!!!!

but never much room for slip ups with this one

U still in bed then ?

Two words ENJOY and REJOICE !!!!!!!

[rivaldo] 24/11/2015 11:10

Forecasts for this year were 26.7p EPS, but we now know RNWH almost achieved this last year.

If forecasts are increased to say 29p-30p EPS for this year, I can certainly see 400p coming (this week would be nice, but may be pushing it!).

The Balance Sheet has been the same ever since I bought in the 60p's and is typical of this kind of business. Either investors live with it or not.

With net cash expected by this year end, it's probably not long until the next earnings-enhancing acquisition. There's quite some headroom, so should be a decent-sized one for £15m-£20m?

[thecroots] 24/11/2015 10:48

I think most, including me, know that they deliver but I am uncomfortable with the balance sheet myself. Its just too bare and lean at the minute and the pension deficit is still a niggling worry for me.

I cant see us moving on from here without an acquisition and shouts of 400p by the end of the week is just laughable!!

[dlku] 24/11/2015 10:24

big goodwill problem?