Renew Share Discussion Threads

[harrogate] 08/1/2019 12:38

Riv - thanks for that. I do wonder why they don't RNS some of these wins through the year - especially the asset tender wins which I think are new lines of business for them. But I agree that the main Renew business looks to be set fair in CP6.

[rivaldo] 08/1/2019 12:14

This review of 2018 and beyond for AMCOGiffen all sounds very cheery:



"The Past & Present

The last 12 months have been monumental for the evolution of AmcoGiffen. We’ve entered new markets, secured some brilliant Network Rail Asset tender wins, and been awarded the SNE Lot 3 Renewals and Enhancement framework. We’ve rebranded, gained traction in the industry, and continued to develop the pioneering merger of AMCO and The Giffen Group....

....The Future

Going in to 2019 and CP6 with a solid work-bank and a well-earned reputation, AmcoGiffen’s future is looking bright. Launching our new SHEQ 24/7 strategy, embracing the innovation of modern technologies, and strengthening our existing teams, we’re excited to see what next year brings!"

Plus lots of work at Kings Cross over Xmas with 1000 hours on site:

[rivaldo] 03/1/2019 10:27

The £61m Big Ben restoration job is in the hands of RNWH's Shepley Engineers....



"All the metalwork has been transported to Sheffield-based Shepley Engineers for restoration or replacement. They are stripping down the 3,222 bronze, copper and brass components, either by sandblasting or with chemicals, before repairing or replacing them.

Head of restoration Trevor Marrs said: ‘Virtually every single element has needed a fairly significant amount of work. There is a lot of damage. A lot of it is to do with the gutters and catastrophic failures of major elements of the roof.’"

[gengulphus] 17/12/2018 08:27

What she's had is a vote of confidence from Conservative MPs for her to be their leader. A vote of confidence in the government from all MPs is another matter, and it would be a failure to get that (confirmed by a second such failure a couple of weeks later) that could cause a general election to be called before 2022.

Gengulphus

[thecroots] 14/12/2018 16:39

Hi Brandon

But surely May has had a vote of confidence it shouldn't weigh on them too much for a while?

[harrogate] 14/12/2018 08:03

Of course but the disruption to the contracts etc if labour were to look at nationalising the railways would be huge and I am sure that is what is weighing on the shares. Unless behind the scenes we haven't won as much of CP6 as we hoped which I doubt

[igoe104] 14/12/2018 07:58

Regardless of what government in term, bridges and railways will still need upgrading and repairing by a reliable contractor.

[harrogate] 14/12/2018 07:52

Don't think there is any chance of a share price recovery until the issue that is causing it disappears and I am sure that is the current chance of an election and then a labour government. This share should be rock solid as there can't be many that are as certain to hit its numbers so it must be the political risk which could get worse from here. One of my core holdings so a painful year for me for sure

[thecroots] 13/12/2018 16:39

Seems crazy that share price won't recover although i suspect when she does start to recover she will do so quickly!

[rivaldo] 13/12/2018 12:13

Beat me to it Jeff H :o))

Another £13m contract in the bag, adding to order books for the next 18 months or so.

Nice.

[jeff h] 13/12/2018 10:50

Another one for the collection guys:-

[wad collector] 10/12/2018 13:12

350 was too much to resist for a little top up. Won't cover my Interserve losses though....

[rivaldo] 07/12/2018 10:56

Thx Jeff, great news.

£190m of secured work going forward is not to be sniffed at :o)) And hopefully more to come.

It also seems Clarke Telecom's workload is picking up nicely - this is from October and wasn't posted here. They won a share of a £200m contract back in 2016 for an Emergency Services Network, including 4G provision, and according to this:

"Over the next six months, the programme expects 70 EAS sites to begin construction in the most remote and rural areas of Scotland, Wales and England":

[igoe104] 05/12/2018 14:54

Cheers Jeff, good news that things are starting to happen regarding frameworks.


Also found this, good to subsidiary businesses working together on a project.

[jeff h] 05/12/2018 13:35

Railway specialists Story Contracting and AmcoGiffen have bagged the first major contracts to be let by Network Rail for the CP6 control period from 2019 to 2024.

The contracts are the first of three that will be let for Scotland and North East structures and building renewals and enhancements, worth together £645m

Story Contracting picked up the £135m deal for renewals and enhancements work in Scotland, while AmcoGiffen has secured work on the London North East route valued at around £190m.

The remaining and most significant work-bank ‘Lot 1’, will be announced later this year and is valued at a further £320m.

As well as the renewals and enhancements framework, SNE will also name its two geotechnical framework partners shortly that will share £147m of work.

The awards are the first of Network Rail’s CP6 contracts to be let following the Office of Rail and Road’s final determination, which confirmed £35bn of funding for rail maintenance and renewals.

Scotland North East and Southern regions are anticipated to hold the largest work-banks for the coming five-years, with over £5bn of renewals spend estimated per region in addition to substantial network-wide upgrades.

Southern will be the next region to announce its contract awards next month.

[thecroots] 30/11/2018 20:09

No bad news buried in my opinion. Just the market being impatient.

Assuming the markets behave, I believe these will get to £5 next year sometime.

Not as early invested as you but I've had these since 39p but me personally have never been so confident with RNWH's future than now. Forefront is out of the way now.

Hopefully we with get the rail update soon enough.

[wad collector] 30/11/2018 19:41

Well , that was a disappointing end to the week , with the share price closing around 350p. I have held these more or less continuously since 1991 so take a long term view , but it is now by biggest holding and I worry slightly that there is some bad news buried somewhere. I think I shall go and have a beer and forget about it for a year or so...

[rivaldo] 29/11/2018 13:37

Here's the IC's Buy tip (cheers mate):

"Renew (RNWH) : Buy

Operating margin surprises on the upside

Renew has reported a good set of FY 2018 results to September slightly ahead of our expectations at the profit and earnings level. While sales were a bit behind our forecasts (partly affected by a reduction in rail revenue in the final year of the control current period) this was more than made up for at the operating margin level. Operating margin of 5.7% is up from 5.2% last year (our forecast 5.3%). DPS was raised by 11% as expected. Net debt of £25.8m (incl. finance leases) is better than our forecast £28.7m, albeit operating cash flow looks lower than we forecast. We now forecast net debt to reduce significantly as the acquisition of QTS benefits and trading remains good.

The outlook is positive, evidenced by the Engineering Services order book rising +16%. We reiterate our view that the main excitement on Renew is the forthcoming 25% increase to £32bn in rail operations, maintenance, support and renewals spend by Network Rail in the 2019-2024 control period, and the increased exposure to this area Renew has post the acquisition of QTS. In this context, the FY 2019E P/E of 9.7x and free cash flow yield of 8.8% alongside net debt falling remains attractive."

[rivaldo] 29/11/2018 11:40

The IC says Buy - anyone got access for the full tip please?

"Tip Updates November 27, 2018
Renew positions itself for rail spending splurge"

[rivaldo] 28/11/2018 08:55

Cheers mas, good to see Questor saying Buy. The results were good at the core and the prospects better.

There's lots of upside imo - especially if (a) defensive shares come back into fashion given Brexit worries and (b) there's bound to be increased Governmental infrastructure spending prior to the next election (as long as that's not too soon!).

Numis say Buy and have a 500p target - they now go for 39.7p EPS this year and 42p EPS next year. A P/E of 9 is just far too cheap imho:

"RENEW HOLDINGS (BUY 500P) FY Results.

Good FY results, and we retain current estimates. Key points:

1. Full year results were c2% ahead of NSe on PBT and EPS, and DPS was some 11% up on last year. Net debt at £21.4m was in line with NSe.

We look to maintain current year estimates (PBT £37.1m/EPS 39.7p) and outline a 2020 figure for the first time, pointing to a 5% growth rate (£38.8m/42.0p). We believe this prudent given that rail will be a key driver of growth but that this will only be the first full year of the next 5 year/CP6 programme.

2. Engineering Services EBIT ahead 19% in part reflects the QTS acquisition, which is performing strongly and in line with expectations. However, we would also point to the lower organic revenue in rail (c£20m) this year as CP5 ends, offset by growth in Energy and Environmental and also that ex-QTS margin increased by c60bps. With the ES order book +16%, the full weight of QTS in the current year and the commencement of the CP6 Network Rail programme (with an expected 25% increase in OMR spending) there is a very positive outlook, though as suggested above it is right to be prudent about this programme in the seminal years of transition.

3. Specialist Building is now less than 5% of group profits and saw a decline in profits on the back of a contract issue and increasingly competitive markets. Management alludes to this being a non-core operation given increased London competition. This will have no implications for profits, but will mean an initial working capital impact due to the negative working capital nature of the business. That said, we still expect Renew to be cash positive by 2020E with NSe net cash of c£6m.

4. Conclusion. Good performance provides the strong platform across all areas of ES, but notably in the Rail area (c60% of the division) with increased service capability and profitability resulting from QTS. We argue that Renew's increased rail exposure provides upside risks as workloads accelerate, while Energy and Environmental are also showing good and sustainable growth dynamics.

As such, the 12/19E P/E of 9.2x does not reflect Renew's premier rail positioning or the strength of the business model into key areas of investment which are funded on a non-discretionary basis so carry very little political or cyclical risk. We retain target price and BUY recommendation."

[harrogate] 28/11/2018 06:45

Thanks for that article. I went through the results presentation on the website last night and I am convinced that they put a lot of pieces in place last year for the future and that with the order book up and framework positions renewed and indeed increased they are in a good place now. The p& l was messy last year with forefront write down and loss on disposal but with a clean year now and surely 40p pretty much nailed on they are cheaper than they have been for years. Once debt is seen to be coming down as forecast and this year is seen to be on track I can see it back up. Based on their usual lack of updates it will be AGM statement in late January before we hear anything though. I could see specialist building disposal as this management team clearly not as wedded to it as the last one. That might help rating as think it has legacy reputation as a builder.

[masurenguy] 28/11/2018 00:31

Renew Holdings is an Aim-listed company that does what its name implies and more. Think of every aspect of the country’s infrastructure network, from railways to nuclear power to wind farms to flood defences, and, with the exception of roads, Renew is almost certainly working on it in some capacity. All of which should mean that it is in a princely position to profit from the government’s £600 billion infrastructure building and overhaul drive over the next decade and its promised increase in spending on shoring up Britain’s flood defences. With the regulated water and rail sectors poised to secure agreement on their profit and investment plans for the next five years, it also should be in a strong position to give investors good guidance about the likely level of medium-term earnings.

Renew’s annual results for the year to the end of September were complicated by losses taken against the Forefront gas infrastructure business sold earlier in the year for £1, which depressed statutory pre-tax profits by 25.8% to £14.7m. Underlying performance was impressive, though, with margins improving, adjusted operating profits from engineering services rising by 19.3% to £32.5m and the order book up 16.4% to £510m. The dividend was lifted by 11.1% to 10p. The shares, down 14p at 361p yesterday, are volatile, regularly buffeted by falls at other contractors. They trade at a paltry 10.6 times earnings for a yield of 2.7% and must be a “buy”.
ADVICE Buy. WHY New infrastructure may boost low-rated engineer

[wad collector] 27/11/2018 09:35

Agree ; I suspect some investors are looking at the summary and,being unimpressed with the headlines , are selling without reading on.
When you look at the 25% share price fall from last yr , there is significant discounting already.
Will add if I can find something else to sell!

[harrogate] 27/11/2018 08:16

Not in these markets and I think that they are out of favour - I strongly suspect still because of the risk of a labour government and the impact on the rail business. I also think that this is back to the price of the placing which seems to happen a lot and we will look better when the debt has reduced significantly through this year

[thecroots] 27/11/2018 08:13

But surely any savvy investor will know its about the disposals which mask a couple of the figures which we all knew was going to be the case.

Future does look rosy and i thought that would be the only thing the market would be interested in...