Renold Share Discussion Threads

[wigwammer] 08/2/2023 10:43

The pension deficit is not the same as debt. Far longer term, cheaper, and the conditions attached are far more flexible, given the trustees typically recognise the value to the scheme of keeping the business a going concern. I suspect there is substantial opportunity for gains by recognising the consensus tendency to lump the deficit into an enterprise value calculation however.

[this_is_me] 08/2/2023 09:24

Where did you get that figure for pension liability and how up to date is it?

At the last triennial pension valuation the technical provisions deficit of the UK scheme, which is how the trustees and regulator view the scheme, was only GBP9.1m.

It is a lot more complicated than that, of course, since eg. the company has overseas pension schemes in different legal systems.

[74tom] 08/2/2023 09:05

Re. the P/E multiple here, it's rather irrelevant when a company has a pension liability that is almost equal to the current market cap (£61.1m) + net debt of £34m as per the interims.

The effective enterprise value is therefore £63m + £61m + £34m = £158m, so it's trading at about 5.3x adjusted EBITDA. They paid 7.6x adjusted EBITDA for YUK, so yes it's trading at a discount to that, but that makes sense given the pension cost drag.

Out of interest I just looked at BAE Systems defined benefit pension financials & they have a surplus of £1.5b, with scheme investments comfortably covering liabilities. RNO always look to have had a significant deficit, and once in that position it's clearly very difficult (and expensive) to rectify.

[prokartace] 08/2/2023 08:50

deanowls, I believe the pensions deficit is under control and declining fast. The fact that interest rates have risen will have a benecificiary effect on the fund.

[this_is_me] 08/2/2023 07:58

Last year's results showed growth and growth has continued this year yet the P/E is still going to be around 5, if not lower, at current share prices.

Seriously undervalued.

[hardupfedup] 08/2/2023 07:49

always nice -- above expections

[jaf111] 08/2/2023 07:06

Underlying operating profit to be in excess of market expectations…..
Excellent!!!

[deanowls] 08/2/2023 06:40

What are the thoughts around the pensio. Deficit though?

[hardupfedup] 07/2/2023 11:23

pro --- exactly my feelings

[prokartace] 07/2/2023 09:30

This share is now massively undervalued. Nothing but good news coming from the company but the share price has been totally unable to make a sustained rise. It is worth more than double the current price and that would still leave it on a single digit PER. If you consider the progress in improving margins and cutting costs over the last 5 years . I don't think institutional investors have noticed. 2018 the company had revenues of £191 million and a loss of £2.2 million. 2022 similar revenue of 195 mil and net profit of £10.2 mil
The outlook should show growth in revenue and profit. Order book including the new contract should be up over 10% this year, so in spite of inflation this company is growing

[interceptor2] 17/1/2023 08:47

Nice contract win announcement

They don't often RNS contract news, but in the last Interim report they did highlight the strong order book which was at record highs, will be interesting to see if this has progressed in the next update.

[ynot68] 06/1/2023 18:01

Any idea when TU due? Small holder and a bit bored now.

[jailbird] 13/12/2022 14:57

A few clouds he is concerned about it seems .Sounds like a robot , reading of a script

[retsius] 17/11/2022 10:33

excellent finds. Ka and ga!

[ga_dti] 17/11/2022 10:13

Latest CEO interview talking through the results for the six month period ended 30 September 2022 -

[kalai1] 16/11/2022 14:44

Renold Plc posted Interims for the HY period ended 30th September 2022 this morning. Revenue was up 22.0% to £116.3m driven by strong growth in the Chain segment. Adjusted operating profit was up 33.3% to £9.6m, return on sales increased by 80bps to 8.3% with price increases offsetting input cost and supply chain challenges. Adjusted EPS was up 42.1% to 2.7p. The balance sheet looks decent with net debt at £34.0m or 1.2x rolling 12-month EBITDA. The Group’s IAS 19 pension deficit was also reduced by 29.6% to £61.3m. The acquisition of Industrias YUK provides opportunities for synergies and further growth. Valuation also looks very attractive with forward PE ratio at 4.8x ranking RNO top out of 33 names in the Machinery, Equipment & Components sector. Share price is down about 1/3 over the past 12 months and lacks some positive momentum. Wider macro risks are an obvious potential cloud, but company specific factors suggest there is a lot to like. BUY....

...from WealthOracle

hxxps://wealthoracle.co.uk/detailed-result-full/RNO/620

[jaf111] 16/11/2022 13:04

Hard to disagree with you prokartace…..
Mr Market can be a very hard taskmaster but I think he has got it wrong here.
So a little more patience required

[prokartace] 16/11/2022 12:56

Sensationally cheap. Lets hope the aquisitions work well. If they do then debt will decine quickly. It is not unmanageable at 1.2x EBITDA. This should decline to below 1x EBITDA by the time of the annual results as EBITDA will increase and profit will increase allowing a reduction in debt of around £5m.
This share is seriously undervalued and is worth at least double the price it currently trades at. It is astonishing that with all the good figures and upgrades throughout the year that this share has fallen 25% in the last year!

[this_is_me] 16/11/2022 09:41

Huge two way trade already today.

I have a small investment here, bought 6 months ago, still slightly underwater, which I may double.

[bubloo] 16/11/2022 09:31

trading at pe of less than 4.5 with possible dividend next year.second half seasonally better with inventories probably unwinding as logistics are getting better and Germany has managed its energy supplies well.
with high interest rates pension fund deficit will disappear very soon. I twas if I remember right close to 124 million about 1.5 years ago and now around 60 million