Renew Share Discussion Threads

[wad collector] 15/8/2017 15:13

Windham Thomas Wyndham-Quin, 4th Earl of Dunraven and Mount-Earl?

That really would be a surprising appointment since he died a century agao!

[kramch] 11/8/2017 13:26

Yes, I was a bit surprised too.
K.

[harrogate] 11/8/2017 09:19

Any thoughts on the new FD? Looks a slightly odd appointment to me but maybe signals a more aggressive plan in deals given his background.

[wad collector] 08/8/2017 16:03

Half a million new masts ; that is a tidy potential contract.

[rivaldo] 04/8/2017 12:39

From today's Daily Mail - RNWH's Clarke Telecom are at the forefront of UK telecoms infrastructure, and 500,000 new masts for 5G would provide a barrel-load of new work:



"Phone firms fight to erect 500,000 masts for a new super-fast 5G mobile internet network
Published: 21:50, 3 August 2017

Mobile operators are calling for major reforms to Britain's planning system so they can erect 500,000 masts for their new super-fast 5G network.

The bosses of Three, EE and O2 say a rapid increase in the number of transmitters across the country is needed for a proposed 5G mobile network to be in place by 2020.

The technology, which is still being tested, will mean data can be transferred wirelessly at dramatically faster speeds than existing 3G and 4G networks.

It is seen as a vital step as more devices connect to the so-called 'internet of things', placing more demand on existing airwaves.

etc"

[rivaldo] 03/8/2017 12:35

News that Seymour Civil Engineering have completed a £3m waste transfer facility near York, "capable of handling 75,000 tonnes of rubbish a year".

It "will sort and bulk waste from households across the York and Selby districts and from Yorwaste commercial customers."

Good to see Seymour successfully extending its range of activities:

[rivaldo] 27/7/2017 09:21

Finncap initiated coverage not so long ago with a price target of 586p, on the basis that:

- ROCE is significantly ahead of the peer group
- strong Balance Sheet
- cash flows to be reinvested into earnings-enhancing acquisitions
- most of RNWH's work is on large, long-term, essential infrastructure frameworks
- high 65% visibility on next year's sales
- high barriers to entry

The outlook only 2 months ago stated:

"The Board is confident that Renew will achieve its financial target of a 4.5% Group operating margin and report results in line with market expectations for the year ending 30 September 2017."

Enough said.

[harrogate] 27/7/2017 08:17

Hi. Not much to discuss when there is no news. Volume has bene light and it seems to me that SETS amplifies the daily moves. I thought it was a bit ahead of itself at the high £4 mark early in the year and I think it is general drift in the absence of a deal or any news. It has drifted down like this before and they have always turned out to be buying opportunities. We know they will do the 2017 number and 2018 is probably secure as well. Doubt there will be much going on deal wise with them looking for a new FD at the moment. If it fell sub £4 I would be keen having sold a few in the £4.70 - £4.80 range. Still my largest holding but there are not many urgent reasons to buy I suspect.

[mayers] 26/7/2017 20:20

This is beginning to look like an inexorable descent with little discussion here. I am conscious of wadcollector's comment that much future potential is already priced in and that it is not invulnerable to drops in the wider markets, of which there do seem to be hints now. Would value wider opinion here.

[rivaldo] 18/7/2017 14:35

Nice and steady at present. Two 125,000 share trades through today at 435p, so maybe a bit of an overhang cleared.

[hvs] 17/7/2017 08:50

wad collector knows everything.

[rivaldo] 11/7/2017 08:43

Major new £2.4m 7-month gas works contract for RNWH's Forefront Utilities in Brixton:

[wad collector] 07/7/2017 17:05

Looks like that top-up opportunity has now drifted past. The only thing that I don't like about RNWH is that the yield is not that impressive , a lot of future potential is priced in , so although it is seen as defensive it may still see a big drop if the wider market drops.

[rivaldo] 19/6/2017 12:15

Finncap has today issued its quarterly note on the Support Services sector. RNWH is one of its 7 favoured picks (amongst the others is ACL, which I also own), with a Buy and a 586p target price:

"Invest in defensive markets where share can be taken

Renew - Renew's repair and maintenance services are fundamental to the
UK's energy, gas, water, telecoms and rail infrastructure. The order book
typically provides visibility on 65% of next year’s sales, but in reality the vast
majority of Renew's work is on large, long-term, non-discretionary frameworks.
This supports attractive and relatively low-risk growth prospects."

[wad collector] 13/6/2017 13:30

Been dangling a buy order there myself , but not been filled yet. Wider market seems to be in a strange place at the moment , surprised the political uncertainty has not flattened the market.

[rivaldo] 09/6/2017 15:32

Looks like some are taking advantage of the fall now - the latest buy is at 436.25p.

[deadly] 07/6/2017 13:09

Big fall these last few days; buying chance?

[rivaldo] 02/6/2017 11:55

Nice write-up on GCI yesterday, this extract in particular:



"No worries

Relatively new CEO Paul Scott told GCI he has no stand-out issues to worry about at the moment and our conversation underscored the impression of a company performing well. Net debt was £3.5 million at the half year but this is expected to move to a net cash position by the year end. The active M&A pipeline is said to be ongoing."

[rivaldo] 26/5/2017 11:25

Managed to get access....here's the tip, which doesn't even mention Finncap's 586p target:

"Aim-listed Renew Holdings, which we bought on November 25 at 396p, posted half-year results on Tuesday and is living up to those hopes. It is among the more speculative constituents of this portfolio.

This specialist engineering business has successfully captured a number of niche sectors. Skill requirements are high, which is a helpful barrier to competition; contracts tend to be long, giving reassuring sight of future revenues, and customers are generally exceptionally large businesses or government agencies. That adds up to a compelling picture.

The core areas Renew serves tend not to rest on discretionary spending, either. One is transport infrastructure, with Network Rail a major client and projects involving both maintenance and new installations. Another is the provision of environmental services in the fields of clean and waste-water distribution, flood risk controls and nuclear waste management.

Whatever happens in the economy, there is limited room for this spending to be cut or deferred. In fact, looking ahead, Renew should benefit from substantial projects in all these areas.

For these business segments, Renew's revenues for the half year are up 6pc, profit is up 14pc and the margin has improved 9pc. The order book is up 5pc.

All of that is driving the dividend, with the interim payout up 13pc to 3p.

Renew has a further division where the outlook is less rosy. This is a specialist building operation which enlarges or maintains luxury homes and period buildings in and around the capital. Revenues here account for about 18pc of total but the margin is lower and the order book down.

The gamble here is that the factors outlined above play out and that cash is returned to shareholders. Numis has set a target price of 500p. We remain very positive."

[rivaldo] 26/5/2017 11:19

RNWH have been tipped today by Questor in the Telegraph as a "small cap share for surefire income" - anyone got access?

[wilmdav] 26/5/2017 10:34

Rivaldo

That explanation would certainly fit. Five years is a long time to get away with under investment. There is nothing wrong with prudence in depreciation policy either.

[rivaldo] 26/5/2017 08:35

Thanks for the update from Simon Thompson penpont. Looks like he's aiming for around 530p or so.

Wilmdav, that's surely the point about RNWH - they barely require any cap.ex as they're providing services/expertise/manpower.

Another positive article in the IC (the rest is subscriber-only)....



"Engineering drives Renew

Renew (RNWH) has posted a record set of results for the half-year to the end of March 2017, with adjusted operating profit 15 per cent on the same period last year and adjusted EPS up 16 per cent. These improvements were largely driven by the performance of the engineering services business, which accounts for 80 per cent of group revenue. Revenue here was up 6 per cent to £234m, while the order book increased by 5 per cent to £435m. The division also increased margins by 40 basis points to 5.1 per cent. One notable contributor to the division's performance was the environmental business, which saw benefits from the ramping up of the AMP6 regulatory period."

[wilmdav] 25/5/2017 20:44

I've just updated the RNWH page on the website I use to keep track of my investments. It highlights two persistent features.

I don't recall ever seeing a period of 5 years during which free cash flow per share has exceeded eps by such a large margin. Normally fcfps trails eps. See chart "prof-cash". This is all the more remarkable because they paid out around £3m for pension deficit reduction each year between 2012-14 and £4.3 and £4.7m in 2015 and 2016 respectively. This will continue for a couple of years at least.

Over the same period, the ratio of capex to depreciation is unusually low. See chart "capex".

The two characteristics are obviously related. Either RNWH are over-depreciating; or their business model is such that not much capex is required; or they are starving the company of investment that should be made.

[penpont] 25/5/2017 15:11

Thanks for those rivaldo. Simon Thompson at the IC updated his views yesterday:

'Half-year results from Renew (RNWH:462p), an Alternative Investment Market (Aim)-traded engineering services group specialising in the UK infrastructure market, and on the nuclear, rail and water industries in particular, were bang in line with analyst expectations. Adjusted pre-tax profit increased by 11 per cent to £12m on revenue up 9 per cent to £289m in the six month trading period and, with the engineering services order book up 5 per cent to £435m to maintain the group order book at around £517m, analysts expectations of a similar revenue performance in the second half are fully covered by orders.
Clearly, the board is confident of delivering the 16 per cent increase in full-year EPS to 31.7p as analyst Nick Spoliar at broker WH Ireland predicts as they raised the half-year payout by 13 per cent to 3p, suggesting a 9p a share full-year payout is on the cards. They can certainly afford to be generous as net debt of £3.5m at the end of March 2017 is expected to turn into a net cash position of between £4m and £5m at the end of September 2017 after factoring in the second-half profit and cash flow.
The solid stream of earnings generated by supplying critical infrastructure maintenance services, which produce a return on capital employed north of 60 per cent, looks well underpinned by a raft of contracts in rail infrastructure, the AMP6 cycle in the water industry, and the nuclear industry where Renew is an established player in both decommissioning and decontamination work. Also, the board's decision to withdraw from its loss-making low pressure, small diameter gas pipe replacement activities is a sensible one as it is expected to return Renew's gas business to profitability in the next financial year, albeit it will result in £500,000 of one-off cash costs in the second half and a £5.8m non-cash impairment charge.
The bottom line is that having first recommended buying the shares at 258p ('A small-cap breakout', 14 Aug 2014), and banked dividends of 18.5p since then, I am comfortable advising running profits on this holding having previously recommended top slicing at 470p last month ('Taking profits', 18 Apr 2017). With the shares rated on a forward PE ratio of 15, my instinct is that a bull market top probably lies somewhere between the two target prices of the brokers who cover the stock: WH Ireland's (470p target price) and finnCap's (586p). Run profits.'

[rivaldo] 25/5/2017 12:39

Interview with the FD, mostly about their Yorkshire operations, but a nice snippet about the Giffen acquisition:



"Renew has also benefitted from its recent takeover of Giffen, which specialises in delivering mechanical, electrical and power services for Network Rail and London Underground. Giffem was acquired from private equity firm Rcapital in a £7m deal.

Giffen Holdings, which is based in St Albans, specialises in mechanical, electrical and power services within the railway environment employing 123 staff.

Samuels added: "We didn't have London Underground as a customer before and now we can offer services from the rest of our rail activity that we've worked on such as civil engineering and particularly tunnel work to London Underground.

"The other way to build the business is to grow it by expanding the service offering that we offer to Network Rail, we have a few projects where we have tendered jointly with Amco and Giffen together for projects that neither Amco nor Giffen would have been able to apply for before.""