Renew Share Discussion Threads

[rivaldo] 08/10/2019 12:17

More great news - RNWH's Lewis Civil Engineering are one of only two companies appointed to implement a £75m network maintenance contract for Bristol Water until 2024....



"Bristol Water awards £75m of contracts under new delivery model
07/10/2019

Bristol Water has awarded new Network Maintenance Partnership Contracts worth �75 million to Lewis Civil Engineering and TK Gallagher....

.....The new contractors started with Bristol Water on 1 October and the contracts will run until 2024.

A spokesperson for Lewis Civil Engineering said: �We�re delighted to have secured a partnership with Bristol Water. Securing this strategic partnership framework will allow us to strengthen our current relationship with Bristol Water and align fully with their social contract values and efficiency targets.�

[rivaldo] 02/10/2019 15:13

Great spot from yesterday igoe104. Worth highlighting extracts from the news - this secures eight years' worth of works for Yorkshire Water:

"Yorkshire Water has appointed Seymour Civil Engineering to its Minor Civil Framework, worth up to £290mn, where it will deliver requirements around the entire operational area.

Yorkshire Water has recently awarded £1bn of Civils Frameworks for 2020-2025, covering the full range of civil engineering requirements across its clean and wastewater assets with a total of 18 partners after a 12-month procurement process.

Seymour is the only company to be appointed within both Yorkshire Water's Minor Civils Lot 1 and 2 and will be carrying out civil engineering works to existing assets on operational treatment and distribution facilities. This will also include refurbishment and repairs to clean potable water and wastewater structures including reservoirs respectively.

Karl Brennan, Pre-Construction Director at Seymour Civil Engineering, said: "This is a key milestone for the business to achieve this strategic growth in Yorkshire and it provides a platform for further growth and development.

"The work will commence later this year or early 2020 and will last over an eight-year period with a review after five years. This will result in creation of jobs and many opportunities to deliver social value as well as reinforcing our position as a multi discipline specialist civil contractor in the region."

"Karl Brennan added: "As Seymour has grown from a family business, this appealed to us and the decision was soon made to declare an interest in the Minor Civils framework.

"The framework was a three-stage process and we competed against some of the UK's main contractors before securing our position."

[igoe104] 02/10/2019 13:31

Yorkshire Water appoints Seymour to £290mn Minor Civil Framework.


Seymour is the only company to be appointed within both Yorkshire Water's Minor Civils Lot 1 and 2 and will be carrying out civil engineering works to existing assets on operational treatment and distribution facilities. This will also include refurbishment and repairs to clean potable water and wastewater structures including reservoirs respectively.
Karl Brennan, Pre-Construction Director at Seymour Civil Engineering, said: "This is a key milestone for the business to achieve this strategic growth in Yorkshire and it provides a platform for further growth and development.

[rivaldo] 02/10/2019 08:15

The IC also says Buy:



"Renew Holdings (RNWH) expects FY2019 results will be in line with market expectations, reflecting a full year contribution from QTS. Engineering services is expected to report good organic growth with the order book underpinned by long-term framework contracts. Rail has commenced operations in the first year of new control period CP6, with activity levels in line with the group’s forecasts. Net debt as at 30 September 2019 is anticipated to be between £10-11m. Buy."

From memory all the analysts covering RNWH say Buy. Peel Hunt are the only ones I've seen so far - as the others opine hopefully word will spread. Apart from anything else, RNWH must be a pretty safe haven in these uncertain markets.

[harrogate] 02/10/2019 07:30

Thanks for posting that. We all agree! The key question is how is the investment case going to become "better understood". We can understand it and have done for a while so what is going to be the catalyst? Not sure the company help that much as they engage little with private investors

[rivaldo] 02/10/2019 07:10

Peel Hunt remain very bullish - by now people with any sense should have realised the difference between RNWH's maintenance and essential works model and the rest of the contracting sector. Which is what makes RNWH so attractive. Especially on a P/E of 9.

Here's some commentary from them:

"The woes of the contracting sector have led to a material de-rating of Renew Holdings shares despite management's delivery, says Peel Hunt. The broker notes that the positive investment case is firmly underpinned by its exposure to rail, sustainable barriers to entry, blue-chip customers, confidence in estimates, as well as its merger-and-acquisitions opportunities. "We believe that as the differentiated investment case and the group's strategic positions--including the M&A potential--become better understood, there is scope for a material re-rating," it says. Peel Hunt has a buy rating on the stock with a target price of 500 pence."

[wad collector] 01/10/2019 10:51

So we are all agreed this ought to be a fiver again soon. Just the market that doesn't agree! Happy to hold. Actually I exaggerate ; never quite made a fiver in past.

[rivaldo] 01/10/2019 08:43

Peel Hunt reiterate their Buy and 500p target:



Good to see you in here CWA1.

[harrogate] 01/10/2019 08:16

Excellent update and great to see my slight worry about a possible slow start to CP6 was wrong. With this out of the way and focus on 2020 let's see what happens. I still think the words will have to turn into more than a 5% increase in EPS from 19 to 20 to get us moving. Surely that 41p and change is going to have to move up.

[cwa1] 01/10/2019 08:11

Morning Rivaldo

I agree, the update was decent. Took a handful in the auction, the only trade early on as it happens, at 393. Doesn't seem to be a lot of interest from punters but happy enough with that purchase on a medium term basis.

FWIW, in my locale the QTS boys have been working 7 days a week on the local railway line, clearing trees, vegetation, etc, so they must be doing something right...

Good fortune with it :-)

[rivaldo] 01/10/2019 07:08

Excellent year end update today:

- nicely in line
- "good organic growth"
- "strong order book"
- CP6 has started well
- net debt halved and down to levels where we can expect further acquisitions

As of today, RNWH is on a current year P/E of just 9.3 with consensus forecasts of 41.74p EPS. Much too low.

Onwards and upwards from here.

[rivaldo] 11/9/2019 09:19

The odds are good that the upcoming update will be good, given the outlook from the interims:

"David Forbes, Chairman of Renew, said: "The Group has delivered record interim results, in part reflecting the contribution of QTS which we acquired in the second half of last year. We are pleased to have increased the interim dividend by 15% consistent with our progressive dividend policy. We continue to deliver on our established strategic objectives and remain confident of reporting full year results in line with expectations."

Typical that neither Numis or Peel Hunt can be seen on Research Tree! If anyone has access to their coverage that would be appreciated....

[harrogate] 11/9/2019 08:41

Thanks riv All good stuff but it seems no one is interested! They have a strong core of II s but they do very little to encourage PIs and I think that is a mistake as it can make a real difference. I still believe that the threat of the labour government is holding us back. Fingers crossed that the TU in 3 weeks is strong.

[rivaldo] 11/9/2019 08:23

Excellent - Peel Hunt have today initiated coverage of RNWH with a Buy and a 500p target:

[wad collector] 02/9/2019 13:14

One fly in the ointment is the possible AIM IHT relief rules. RNWH share price benefits from this status . Hard to know how much the share price would fall if the long delayed review decides to remove the relief but it does cast a bit of a shadow.
Mine are all ISAed anyway so not my reason for holding but it is a factor in the share price
The Office for Tax Simplification ( I never knew it existed - sounds like Harry Potter invention)issued the second report in July without making many ripples. I guess the press have had other political news. Curiously, although it has some definite suggestions (Like changing IHT gift exemption to 5 yrs not 7 and abolishing taper relief) it does not come out with a statement on AIM IHT relief , instead it comes out with a question.

"However, in particular in relation to third party investors in AIM traded
shares, BPR is not necessary to prevent the business from being broken up or
sold in order to fund the payment of Inheritance Tax. This raises a question
about whether it is within the policy intent of BPR to extend the relief to
such shares, in particular where they are no longer held by the family or
individuals originally owning the business."

The lawyers view seems to be that it will take a yr or two for the proposed changes to be enacted. Presumably a Labour Government would view the specific AIM IHT exemption question as one with an obvious answer. Not clear what other parties would do.

[rivaldo] 02/9/2019 11:32

New article noting RNWH as a stock which should thrive even after a no-deal Brexit:



"I recently wrote about engineering services provider Renew Holdings (LSE:RNWH), pointing out that it generates most of its revenues from regular, ongoing maintenance spending in sectors such as water, rail and nuclear.

This spending will need to continue, whereas larger projects, such as HS2, could be stopped or delayed after Brexit. The Renew share price has drifted down to 389p since the previous article, so the shares are trading on less than 10 times prospective earnings."

[rivaldo] 28/8/2019 09:15

Agreed wad collector.

News of some heavy duty emergency work which should provide a nice boost just before the year end:



"The West Highland Line re-opens ahead of Schedule
27/08/2019

Hard to believe in light of the glorious weather we have enjoyed over the Bank Holiday weekend that a week has passed since the AmcoGiffen team in Scotland was battling with the elements to complete an emergency works programme to re-open the West Highland Line, days ahead of schedule, following recent flood damage at locations around Crianlarich.

Quickly mobilising, our team has worked round the clock at five locations to repair damaged rail infrastructure – clearing debris, devegetation, reconstructing embankments, enhancing drainage and rebuilding the track-bed. Critical to this successful outcome has been our fantastic supply chain.

Facing very challenging conditions, we worked safely and collaboratively with Network Rail to deliver this early completion – an achievement recognised by Alex Hynes, Managing Director of Scotland’s Railway who commented: “I am delighted that we are opening the West Highland Line earlier than first anticipated. Our engineers worked around-the-clock often in challenging weather to rebuild the line and get it open as quickly as possible for our customers.”

Further recognition came from Michael Matheson, The Scottish Government’s Cabinet Secretary for Transport, Infrastructure and Connectivity:

“The Network Rail team have been working on site just south of Crianlarich 24-hours-a-day in order to get the West Highland Mainline repaired and have had to bring in 3000 tonnes of aggregate in what is a very difficult site to get access to.

etc"

[wad collector] 27/8/2019 16:15

Picked up some more at 385 . I probably have too many but can't see many better places right now.

[rivaldo] 21/8/2019 07:47

Tipped here by Andrew Hore:



"Renew (RNWH)
401p

Renew (LSE:RNWH) is an engineering services company, which has operations involved in the rail, water, telecoms and nuclear sectors. This is a UK-focused business that generates revenues from regular maintenance spending, rather than large projects which can be delayed and provide lumpy revenues.

Rail and nuclear have been trading strongly and water infrastructure investment should pick up in a couple of years when the AMP7 regulatory spending period gains momentum. When 5G telecoms investment takes off, this will provide further potential growth.

A full contribution from rail engineering services provider QTS, acquired last year, helped underlying interim pre-tax profit to rise by 37% to £17.7 million, but there is also organic growth.

Cash generation is strong and net debt could nearly halve from £21.4 million to £10.9 million this year. Numis forecasts a rise in full year pre-tax profit from £30.3 million to £37.1 million. An engineering services order book of £531 million underpins the forecasts for the next couple of years.

The share price has risen by 18% this year. Even so, the shares are trading on ten times prospective earnings for this year. The forecast yield is 2.8%."

[harrogate] 20/8/2019 08:30

I see no evidence of a seller here at all. Polar sold a few in March and there have been no sales by them since. Only 6 weeks until TU so hopefully that will help. The other Corbyn impact would be the removal of IHT exemption on AIM stocks as renew is a top IHT funds holding. Maybe the transition from CP5 to CP6 caused some temporary delays on work release - we know government is poor at these things. Just musing on reasons why we are only valued at 9 times that is all

[wad collector] 19/8/2019 22:47

Agree; this is not a particularly politically sensitive stock. Hold and prosper. Them piles of radioactive waste don't know who the PM is, nor do the railway sleepers.

[rivaldo] 19/8/2019 15:39

IMO there's simply a seller out there drip-feeding stock (could be Polar Capital, who reduced per their RNS in March?). Any Brexit effect on RNWH is surely de minimis if anything, and I can't believe that anyone now seriously believes Corbyn will be voted in (even temporarily as he would like!). In fact, given the need for investment in infrastructure post-Brexit any effect would likely be positive for RNWH.

The rail, water and nuclear industries will all continue to need to be maintained and serviced, and all of them are coming into time frames and biases in terms of work flow which will benefit RNWH.

[harrogate] 19/8/2019 13:01

I am pretty sure the reason that we are stuck here despite all good news, tips and broker targets all at least 20% above £4 is the fear of a Corbyn government and what they might try to do with the railways and potential nationalisation. Even if this proved impossible and eventually it all remained as is it could be disruptive to the largest part of the business. There is no brexit risk here in a specific sense for me

[hsduk101] 19/8/2019 12:56

This is still heading down, whats the brokers projecting this at? Price could be brexit related? If so then it will go further south before it goes up

[rivaldo] 19/8/2019 11:38

Cheers penpont, appreciated.