Renold Share Discussion Threads

[roddiemac2] 08/8/2012 16:43

There is little or no comparison between Renold and Dawson, full stop.

[gleach23] 08/8/2012 16:30

roddiemac2 - your post made me chuckle. I may just copy and paste it onto some other boards. There seem to be so many posters doing exactly as you say.

[simon templar qc] 08/8/2012 14:25

Where is the repetition I have not posted the links before and the latest news on the subject has just come out?

In the meantime don't you think other potential investors need to be warned of the pitfalls or are you vent on ramping here regardless of the pitfalls.

Where I post or what I hold is totaly irrelevant to you other posters look forward to my posts whether or not they are buyers sellers or holders.

Bulletin boards serve a useful purpose and it does no good to anyone hiding the truth. You will gain no brownie points ignoring any negatives. I suggest you look at what they are saying on the Dawson thread many there are regreting holding on.

[roddiemac2] 08/8/2012 13:55

Simon T , you are indulging in unnecessary repetition. Since you don`t hold the shares , what is the purpose of your posts, other than trumpeting what you see as your wisdom for not investing.Take a hike.

[simon templar qc] 08/8/2012 12:06

Dawson shares suspended today they had a black hole in their pension fund. I would not get carried away with false hope pensioners give ground on that front!



A few months ago pension funds refused to back down..



The reality of the situation is pensioners come first shareholders come last hence the suspension...

[roddiemac2] 03/8/2012 19:39

adon,--you have summed the situation up with admirable clarity. If the problem of pension deficits in general gets much worse, pensioners will have to give ground. It is a problem easily solved.

[adon] 03/8/2012 09:31

rburtn
Dont worry the pensioners will have to take a cut, the business comes first, that's life these days, government or regulations can't do anything about it. The pensioners need to live in the real world. The current price of 22p is overdone on the downside following the trading update (which wasn't that bad)but, what do you expect in this market. The brokers don't care about the business they just want to rip the existing shareholders off. The Directors know better hence their previous optimism.

[rburtn] 03/8/2012 08:14

How should we read the competence of the directors to run this business, between five of them they sank almost £150k into it at 35p a share over the last 6 months! Did they not know about pension funds? This pricing looks ridiculous to me but I'm down so much, averaging down does not seem an option, I've been doing that for five years. If even this company is to be sunk by its pension liabilities, where will it all end.

[simon templar qc] 03/8/2012 08:02

That is two downgrades then. However with borrowings at year end of near £23 million and a verly large pension deficit I think the reduced price target is still too high. Renold is very high risk imo.

[philanderer] 03/8/2012 07:58

Singer Capital Markets downgrades today.

'fair value' - target down from 37p to 23p

[simon templar qc] 03/8/2012 07:27

As I said yesterday debt is too high and so is pension deficit avoid!

If trading deteriorates further the company would be at risk. Debt had risen at year end which is not a good sign.

5 year performance terrible...

[napoleon 14th] 02/8/2012 22:01

RNO might not set the world alight, but imo it's at near-enough rock-bottom.
Five year chart says it all:



I have some FENR & am wondering if the trend will pull them down...

[simon templar qc] 02/8/2012 14:42

Pension deficit and net debt at year end should have been a warning sign I can see further downside here. This is what RNO said at year end:

Balance sheet

Net assets at 31 March 2012 were £53.2m (2011: £56.9m). The net liability for retirement benefit obligations was £45.2m (2011: £42.0m) after allowing for a net deferred tax asset of £10.5m (2011: £9.5m). Overseas schemes now account for £21.3m (47%) of the post tax pension deficits and £19.1m of this is in respect of the German scheme which is not required to be prefunded.

Cash flow and borrowings

Cash generated from operations was £5.9m (2011: £6.6m). Capital expenditure was reduced to £5.6m (2011: £6.6m), to partially mitigate £4.3m working capital increases supporting sales growth of £18.5m. Group net borrowings at 31 March 2012 were £22.9m (2011: £20.0m) comprising cash and cash equivalents of £4.8m (2011: £7.4m) and borrowings, including preference stock, of £27.7m (2011: £27.4m).

[simon templar qc] 02/8/2012 12:20

Too much debt glad I avoided this company. It was bound to be hit as there is a downturn in the UK Europe amd also China.

[philanderer] 02/8/2012 11:28

FLASH: Finncap downgrades Renold from buy to hold, target price cut from 55p to 24p

2 August 2012 | 12:21pm

StockMarketWire.com

[marben100] 14/7/2012 11:28

PS I note the comments above about executive pay in #1026 above (which are spot on, IMO). This is an issue ShareSoc has been very active on. It is being addressed in the new Enterprise and Regulatory Reform Bill.

As well as being active in consultations on this subject, we have made a submission to the parliamentary committee reviewing the Bill, which you can see here:

I hope that readers will wish to support ShareSoc's efforts, on behalf of individual shareholders, not just to read the AGM report!

Mark

[marben100] 14/7/2012 11:20

Bill Hall has posted an excellent report on Renold's AGM on ShareSoc's member network, here:

To access the report, you'll need to be a member of ShareSoc, which is a not-for-profit organisation that supports individual shareholders and campaigns for shareholder rights. If you're not already a member you can join as an associate FOC here:

Once you've joined, you'll receive an invitation to register for our "members network" private social network, from where you'll be able to access the report (and reports on over 60 other AGMs). If you're already a member and have any difficulty accessing the report, please do not hesitate to contact us here:


Cheers,

Mark

[rivaldo] 02/7/2012 08:34

I note that Singer now forecast 5.9p EPS this year, with a 0.5p dividend, rising to 7.4p EPS and a 1p dividend next year.

This from David Schwartz last month in the FT wasn't posted here. Since then Cazenove have increased their stake by over 600,000 shares to over 5%, there's been various director share buys and the share price has bounced nicely:



"Turning to my own trading efforts, I was quite impressed by the annual results released on Tuesday by Renold (RNO), the industrial chain and transmission provider.

Its statement wrongfooted investors who were frightened by Renold's April warning that European sales growth had moderated. Its warning triggered a 32 per cent share price decline. The size of this drop surprised me because the report specifically stated that European growth had slowed, not declined, and that it was fully offset by double-digit growth in the rest of the world where most of its sales come from.

Last Tuesday's results confirmed my suspicions. Operating profits for the year almost tripled due to the fact that the company's operations are highly leveraged. Small revenue gains trigger healthy profit bounces. Investors Chronicle reports that every incremental pound of revenue generates an extra 41p of operating profit.

Future prospects look rosy. Renold's operating margin advanced to 6.7 per cent, up from 3.7 per cent last year. Management is aiming for 10 per cent. It is optimistic about achieving its goal. Renold's order book continues to grow and the City's consensus profit forecast for the current year is a gain of more than 25 per cent. In my view, the stage is set for a substantial share price rise."

[mctmct] 18/6/2012 16:19

Some director buys that attracted attention in the FT ... "Investors take note".

[rburtn] 09/6/2012 15:09

I'm surprised that there has not been a squeak from shareholders since the recent report.

It's now seven long years since this company saw fit to return anything to its owners. Not only that, a double whammy has destroyed their capital on a heroic scale. The only thing that has risen has been the amount our senior employees have decided to pay themselves for the privilege. It does not help to know that if/when the latter do declare the sort of return that any self-respecting enterprise should for its owners, they expect to do this in exchange for lottery style windfalls.

Unfortunately, Renold is not alone in having its executive sideline its owners. Wherever the bureaucrats do this, a collapse is assured. This applies whether it be the politburo forgetting who they should be representing in a communist state, the ruling elite forgetting the interests of the mob despite being heavily out-numbered by them, or a business in which the owner is not vigilant as to the actions of his employees and the till. Unfortunately, the injustices can go on for a very long time before retributive action.

One thing I am totally unconvinced about, is that the recent profits are better left in management hands rather than ours as dividends.

The institutional investors have all been asleep at the wheel largely I suspect because corporatism has taken control of their businesses as it has in the companies in which they invest. They are in dereliction of duty for their investors and in an efficient market - not one bribed by tax concessions - they would eventually run out of mandates.

Vince Cable is supposedly trying to do something about executive pay, and I concede that rno may not be the worst offender, well let us all make a suggestion - where a contract of employment exceeds a certain threshold, and this could be dependent on a number of criteria, shareholders should insist, and it should be inscribed in law, that the contract must be let through open tender with independent shareholder scrutiny. That should sort out the competition to pay the most which currently obtains and make the blighters pay attention to us. I wrote to him in such terms, I wonder if anything will be done.

[penpont] 29/5/2012 16:36

IC comment:
Renold talks the torque
By Lee Wild, 29 May 2012

Renold lost a quarter of its value after warning in April that growth in Europe had been hampered by economic uncertainty and a strong Swiss franc. That the industrial chains and gearbox maker still doubled underlying operating profit to £14.1m last year suggests the mild recovery since has further to go.

Higher sales and a £1.5m reduction in costs at the core chain division were largely responsible for the strong performance. In fact, every extra pound of revenue generated in the period created an extra 41p of operating profit, and operating margin jumped to 6.7 per cent from 3.7 per cent. That's just 30 basis points shy of pre-recession levels and management want double-digits next year.

Back-office restructuring will save £1m this year and £1.8m annually from 2013-14. Meanwhile, operating margins at gearbox and couplings division Torque Transmission are at a record 16 per cent. The unit generated a quarter of group sales, but 47 per cent of profit, driven by demand from the metals industry and from quarrying and mining. A number of mass transit tenders in Europe and North America are also expected to convert into contracts in the coming months.

Expect adjusted pre-tax profit of £15.2m and adjusted EPS of 5.4p in 2013, says broker Arden Partners (from £9.7m and 3.6p in 2012).


IC VIEW:

Renold is pushing the less cyclical Torque business, and rapid growth in India and South East Asia should offset any weakness in Europe. On a forward PE ratio of six, a big discount to the sector, the shares look cheap. Buy.

Last IC view: Good value, 29p, 15 Nov 2011

[penpont] 29/5/2012 08:41

Added this am on what look like good results and encouraging outlook.