Renold Share Discussion Threads

[rivaldo] 16/11/2011 07:23

GCI say undervalued - 4.1p EPS to look forward to, and with any stabilisation and recovery in the markets the pension fund deficit would no longer be a problem:



"Profits double at Renold
15/11/2011
Miles Nolan

Chains-to-torque transmissions group Renold (RNO) has reported a doubling of profits, driven by solid demand and the useful effect of operational gearing.

Interim results to September reveal that operating profits surged to £6.3 million (2010: £3.1 million) as the pre-tax line soared eight-fold to £3.7 million, on sales up 14 per cent to £105.5 million. Net debt increased to £29 million (2010: £20 million) due to higher working capital as well as the reintroduction of bonus payments.

Perhaps the most encouraging sign for Renold is that its order intake continues to outstrip revenue growth. It is the world number two in the £1 billion industrial steel chains market, so is a useful barometer of industry - particularly given its distribution into 105 countries. This accounts for three-quarters of total sales, and is doing well with all major regions witnessing double digit sales growth.

Renold is winning market share, moreover it is seeing good growth in end user markets. It has benefited from past restructuring and cost savings efforts, and having successfully implemented a SAP IT platform in the US the intention is to roll this out in Europe over the next year or so. This will tie in with a restructuring of its back office.

The torque transmission arm enjoyed higher margins, but the mass transit sector suffered due to the timing of large projects in the US. With its emphasis on products which are bespoke, with high barriers to entry the outlook is good as it focuses on growth markets such as energy, metals and mining.

In an interview with Growth Company Investor, chief executive Robert Davies said 'we expect our positive sales momentum to continue into our second half - which is typically our strongest trading period.'

Broker Singer Capital Markets forecasts 2012 pre-tax profits of £11.7 million and EPS of 4.1p. We last rated Renold as a long-term buy in June at 35.75p, just ahead of the meltdown in world markets over the summer. With strong market positions, current trading good and good growth from emerging economies - the shares remain undervalued."

[roddiemac2] 15/11/2011 22:19

Auldmart, ---pension fund deficits are becoming a problem. Look at FSJ ---today`s IMS---" recent performance in equity markets and low interest rates mean there may be some negative effect on the reported balance sheet figure for pension deficits at the year end .

Dozey3 may well be right.

[auldmart] 15/11/2011 20:01

A great set of results but no positive market reaction. Is it the unfunded pension obligation that's holding this share back ?

[dozey3] 15/11/2011 16:49

Very good, might just about pay off the pension deficit in the next 20 years with a following wind. Nothing here for shareholders that I can see, and Mr Market agrees.

[fatman4] 15/11/2011 09:31

good half yr results and even better-still got a strong order book despite all the gloom

[world wide investments] 15/11/2011 07:41

Well done Renold.
A good return in the face of a difficult market and economy.
Thankyou and here's an early christmas drink to 2012.

[rivaldo] 28/10/2011 12:29

Hmm....about to break out upwards?

[goliard] 26/10/2011 15:34

Rivaldo, thanks. I had missed that the Hanover sale was the 27th.

[rivaldo] 26/10/2011 14:11

Ticking up again...

[rivaldo] 24/10/2011 18:57

See the holdings RNS's on 28th and 29th September for the increases in institutional holdings.

[rivaldo] 24/10/2011 15:51

...which means that same director - actually Hanover Master Fund - remains interested in 12.7m shares, or almost 6%...

...whilst Rights & Issues Trust bought 4m of those shares, and Henderson Global bought another 2m, going to 15% and 3% respectively. Doubtless with other institutions taking up the rest of the shares.

Just to give readers the full picture.

[envirovision] 24/10/2011 13:02

Interesting Schwartz neglected to mention the directors happy to have offloaded some 12 million shares pretty much near the market bottoms though.

[rivaldo] 24/10/2011 10:09

Nice start - over 300k traded already.

[envirovision] 22/10/2011 21:42

I'm into Solar energy as well. EG. laying on a sunny beach and catching a few rays.

[hvs] 22/10/2011 16:44

And he is also into Solar energy.

lol !!!

[gswredland] 22/10/2011 13:09

Schwartz has been tipping RNO for the last 18 months on and off.

[goliard] 22/10/2011 10:06

Sorry, perhaps I am just being pedantic. I know what incremental means, but the wording isn't great. The FT article does help re the highly leveraged point. I would expect a bounce on Monday, but the markets are not being kind to the sector and it is a risky place to invest at the moment, but then again, where isn't?

[rivaldo] 22/10/2011 08:13

Nice coverage in David Schwartz's FT column today should bring in interest on Monday (goliard, "incremental" means additional revenues to the prior year, it's simple).

I look forward to the "substantial share price increase" :o))



"Turning to my own trading efforts, I continue to be a fan of Renold, the industrial chain and transmission provider. The City has avoided capital goods suppliers in recent months because of threats to the global economy. But Renold has taken no notice.

The company turned in a smashing update last Tuesday. Revenues continue to rise at a double-digit rate. The size of the forward order book is growing as well. Another good omen comes from the US, Renold's biggest market. The latest US industrial production report that was released last week shows continued expansion.

Renold profits are leveraged. Small revenue increases trigger healthy profit bounces. Pre-tax profits of around £9m are expected for the current financial year. The City expects that figure to double in the year ahead. The stage is set for a substantial share price increase."

[vraic] 21/10/2011 18:00

Daily Mail today says Renold added to Goldman Sachs Coviction Buy List
trading statement due Nov 18th

[goliard] 21/10/2011 14:51

Quoting it doesn't explain it.

What is the difference between revenue and incremental revenue?

[rivaldo] 21/10/2011 13:46

The excellent update seemed clear to me:

"Incremental revenues continue to deliver strong conversion to operating profit consistent with achieving the market forecasts of doubling our adjusted operating profit in the current financial year."

"The double digit growth rates noted when the full year results were announced in May 2011 have continued throughout the first half of the current financial year with underlying* sales 13% higher than the comparable period last year."

And from today's Mail:

"Industrial engineer Renold was added to Goldman Sachs' Conviction Buy List following recent underperformance but the shares still dipped 0.5p to 27.5p.

The US broker says the capital markets day on November 4 should see the company expand on its strategy in the Fluid Systems division and management should confirm earnings guidance in its trading statement on November 18."

[goliard] 18/10/2011 12:48

Positive sales update, but half of the RNS is unintelligible!

[scotty tsquared] 08/10/2011 13:10

goliard,

Have you not checked your SCO 'bottom drawer' recently ?

[goliard] 08/10/2011 13:05

Comment in FT re chairman sales. Looks like he sold to buy into another company instead, so not very positive I'm afraid.