Renew Share Discussion Threads

[harrogate] 15/5/2024 09:47

Presentation on the website now. Adds some detail I think to the results.

[robow] 15/5/2024 09:13

thanks Rivaldo

[rivaldo] 15/5/2024 08:54

More re Berenberg's increased 1200p target price:



"‘Buy’ high quality engineer Renew, says Berenberg

Renew (RNWH), the AIM-listed engineering services group, can continue the momentum it has built in the past six months given its ‘high-quality proposition’, says Berenberg.

Analyst James Bayliss maintained a ‘buy’ recommendation but lifted his target price from £10 to £12 as the shares gained 2.4%, or 24p, to £10.26, valuing the company at £812m.

The six months to 31 March ‘reflected another record performance’, with group revenue up 17.2% at £552.8m and operating profit also 17% higher at £33.1m, ‘both driven by strong demand and performance across all end-markets and the group’s high-quality, low-risk business model’.

Bayliss said net cash of £42.5m leaves the group ‘well placed for further organic and inorganic investment, while strong momentum in the first half has carried through to the start of the second half’.

Management is continuing to tender for and win new contracts and so Bayliss ‘sees no reason that this momentum cannot continue’ and he upgraded his earnings forecasts by 4% for full-year 2024.

‘We move our price target to £12 to reflect Renew’s continued momentum and its high-quality proposition,’ he said."

[rivaldo] 14/5/2024 22:39

Tipped tonight in the IC:



"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

May 14, 2024

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."

[bsdjj] 14/5/2024 13:52

New target prices :Berenberg 1200pPeel Hunt 1150p

[wad collector] 14/5/2024 08:17

Not surprisingly , the market likes it this morning. I did suspect they might boost the divi a bit more , as 6.33p is covered 5x by earnings now. Not complaining as the Capital Gain dwarfs the yield and suspect a bigger war chest for more acquisitions is a better option.

[rivaldo] 14/5/2024 07:35

Agreed - extremely encouraging both re H1 and looking forward.

The H1 performance suggests forecasts will be beaten for the year given the acquisitions during the period and the increased order books.

Particularly as the higher margin Engineering Services order book has increased beautifully to £831m from £780m - it's the very low margin Building order book dropping to £67m which has meant the overall order book is only up by £8m overall.

The cash pile has roared ahead to £42.5m and is way ahead of forecasts - with the suggestion today that more acquisitions are on the cards.

With the big Rail and Water divisions thriving, and Roads, Telecoms, EV Charging and Nuclear all looking good too, RNWH look set for impressive multi-year growth.

[igoe104] 14/5/2024 07:21

Fantastic set of results, the company is going from strength to strength..

[harrogate] 13/5/2024 08:41

Results tomorrow

[harrogate] 10/5/2024 13:08

Think should use the break out beyond £10 to say how wrong I was that I couldn't see how this could get much higher from mid £7 without a deal or an increase in the dividend. The recovery in AIM generally has helped but still fantastic performance. Delighted of course as a holder so better to be lucky than smart I guess. They have so much ammo for deals that if they can find something of size then this would be a great base from much to go again.

[igoe104] 10/5/2024 11:27

Also this Billion quid framework.(and if you look at the bottom of the link, more additional work for QTS and Amco)

Lot 1A generalist buildings and civils with an estimated value of £1bn – Amco Giffen, Bam Nuttall, Morgan Sindall and Story Contracting

[rivaldo] 09/5/2024 12:21

News this morning that RNWH's Seymour Civil Engineering have won a place on Northumbria Water's framework to deliver its £3.6bn AMP8 capital investment programme:

[rivaldo] 09/5/2024 08:04

Worth flagging up the first trade this morning - a buy at 1,000p (for the first time I believe). Even if it is for 10 shares!

[rivaldo] 07/5/2024 13:29

Cheers CWA1 - I believe 1150p is the highest price target yet.

[cwa1] 07/5/2024 10:24

From this morning's press round ups:-

Deutsche Bank starts Renew with 'buy' - price target 1,150 pence

[rivaldo] 07/5/2024 10:09

New highs again.

Peel Hunt have raised their price target to 1050p, but with material upside potential in a 19 page note.

Their upside model incorporating (1) higher organic growth than their conservative forecasts and (2) acquisitions from the cash pile, would deliver 91p EPS to Sept'26. This would certainly support a share price of 1500p and possibly 1700p-1800p imo.

They summarise:

"Momentum and visibility drives TP increase

• Time to revisit – Ahead of the 1H24 results (14 May), we revisit the powerful investment case and update our M&A/blue sky scenarios.
• Upside risk – We retain estimates across the horizon, but see upside risk building, given profitable market share opportunity across key markets.
• Increased target price – Visibility into new regulatory periods, positive drivers and the M&A opportunity lead us to raise our TP from 950p to 1,050p.

We believe that Renew’s strategic focus on developing its leading positions across infrastructure-led markets, through its operationally-led competitive advantages, leaves it well-positioned to sustain attractive, cash compounding growth. The shares remain undervalued, in our view, given the quality of earnings and both the organic and acquisitive opportunities. We retain our Buy rating."

"Investment case.

Growth is underpinned by consistent cash generation, leading to compounding free cash flows. We look for FY24E net cash of £47m, providing management with attractive capital allocation options. We expect the M&A pipeline to be reasonably active with management remaining disciplined (we note the two small transactions already announced this financial year). We believe that under this leading management team, Renew remains well positioned to continue to deliver attractive, long-term shareholder returns. A better appreciation of these opportunities has supported a deserved rerating, but the September 2025E PE of 14.2x and FCF yield of 7% still fails to reflect both the organic and inorganic opportunities and the synergies that both drivers can bring to Renew, in our view. Our target price implies 15.9x FY25E EPS."

[rivaldo] 29/4/2024 22:44

Great finish - in particular a large £383,000 buy of 39,528 shares at 968p reported after the close.

[wad collector] 29/4/2024 12:55

As no-one else commented , just noticed that Route One acquisition; RNWH is becoming a bigger player.

Looking at chart £10 must be on horizon.

[wad collector] 23/4/2024 22:43

About that ATH....

[mirabeau] 23/4/2024 14:02

Same trajectory as Costain and falling interest rates should boost such stocks even further

[wad collector] 23/4/2024 13:57

Looks like we are back on the trail to another new ATH again ; been almost a month since the last one....

[rivaldo] 23/4/2024 10:42

Cheers igoe104. RNWH seem to be on a roll at present.

Looks like a good start for QTS to the Network Rail CP7 2024-2029 five year plan - which is budgeted at £44 billion.

And of course Thames Water are under huge pressure to ramp up investment and maintenance spending, which is bound to happen one way or another whomever owns it. So it's encouraging to see J. Browne:

"awarded the Surbiton trunk mains renewal works by Thames Water as part of the wider FA1488 PROG2011 Trunk Mains Programme".

[igoe104] 18/4/2024 09:44

More good news, J browne have won some work with Thames Water.

[igoe104] 17/4/2024 17:01

Nice to see QTS involved in this large contract.

QTS Group is among the winners of Network Rail’s nearly £2bn capital works delivery frameworks for CP7 in the North West and Central region.