Renold Share Discussion Threads

[essentialinvestor] 29/8/2023 10:55

What the market did not want to hear was considering more acquisitions,
that's a reason why share price performance has been muted post a decent set of results.

[jimmywilson612] 23/8/2023 16:54

I don't think it'll be taken over for a little while yet.
There is a £62M pension deficit on the balance sheet, keeping Net Assets down at £39M.
I don't think the pensions are being re-valued until 2025.

I think in the current climate, the deficit should come down signifantly (although, tbh, I don't know how that all works)!

If they can sort out the pensions then yes, on current metrics, looks v.cheap.

[hardupfedup] 14/8/2023 10:47

whats the chances of this company being taken over i wonder

[this_is_me] 02/8/2023 16:26

Yes, It has been going up steadily all year and is now as high as it was both around 3 months ago and 18 months ago.

maybe someone has got round to looking at the numbers in the full years results published last month.

[hardupfedup] 02/8/2023 16:02

trying to pop...

[robsy2] 21/7/2023 11:33

Looks like a decent punt from here.

[essentialinvestor] 20/7/2023 20:03

rb, at least partly allowed for in the rating. But you are right to highlight it.

I would guess what the market may not have liked was the inference
more acquisitions are to come.

[rburtn] 20/7/2023 18:57

The spectre of a damaging pension fund buyout does raise concern. The fact is pension funds shadow the average demographic and an engineering firm would expect its beneficiaries to draw pensions for somewhat less time than say a software house. Other comparable schemes have generated surpluses but rno might well have messed this up.

[greyingsurfer] 20/7/2023 09:00

In general they seem to be managing the company pretty well. One of the big reasons for the low rating is the pension deficit, which seems increasingly under control. If the market fails to value this correctly perhaps the failure lies with them? In the meantime perhaps a profit opportunity for those who call it right.

[rburtn] 20/7/2023 08:43

What is one to make of this company? It has just reported profits - which it has retained - equivalent to 30% of its market cap. No one believes this apparently, the company value has actually fallen.

With increased debt it should have an extra 40m in the kitty. 25m euro of this went on YUK so what has happened to the 15m?

Was YUK actually in negative equity to the tune of 15m and was it appropriate to gamble such a large proportion of this company's value acquiring a negative value entity? Are the board simply empire builders?

Come on P.E., time you sorted this lot out. It has been hoarding profit for twenty years and all it has to show for it is a halving of its value - in much depreciated currency I might add. How does such incompetence survive and where has all the money gone?

[petewy] 17/7/2023 15:44

In an Ian King interview last week the CEO talked for ten minutes and very briefly mentioned the share price. Uninterested. Despite the upbeat results, Midas etc the share hasn't exactly rocketed.
All buys for share this morning but mall ones.

[pj84] 16/7/2023 20:20

The following are some other snippets from the above MIDAS share tip

“The company is integrating its recent acquisition, a Spanish industrial chain business known as YUK, which has meant taking on more debt, but the company is sanguine as YUK is performing above expectations.”

“The company has bitten off more than it could chew in the past, but there's no evidence that it's struggling to assimilate YUK at present, which is performing ahead of expectations.”

“When you post upbeat results, but your shares fall three per cent as the market rises, you might be forgiven for wondering what it is you've done wrong.

Robert Purcell, chief executive of AIM-listed Renold, was bemused by the market's reaction to his company's results last week.

'My honest view is that our shares are ridiculously cheap,' Purcell told Midas after he posted stronger-than-expected figures for the fourth quarter.”

[tole] 16/7/2023 09:12

https://www.dailymail.co.uk/money/investing/article-12300057/MIDAS-SHARE-TIPS-Renold-makes-chains-theme-park-rides-bikes.html?Midas verdict: British smaller companies aren't in favour right now, but Renold has a strong combination of innovation and manufacturing expertise which should keep its order book strong. The UK accounts for only seven per cent of revenue, too, meaning that our local travails shouldn't affect it too badly.Renold's valuation, at six times forward earnings, is undemanding, and though economic headwinds can't be ignored, they shouldn't blow this rollercoaster off course. Buy.

[davidosh] 15/7/2023 17:13

Just to let shareholders in Renold and potential investors know that the company results and the investment case for this company will be fully analysed by the BASH panelists on the Mello Monday show this week.



Monday 17th July 2023, 5 pm – 9pm

5:00pm Mello welcome and keynote presentation by Fatima Iu of Polar Capital
5:30pm Company presentation by Windward
6:00pm Company presentation by FADEL
6:40pm Stephen Clapham presents Behind The Balance Sheet
7:00pm Company presentation by React plc
7:30pm Company presentation by NASCIT
8:10pm Research and Regulatory changes, Gareth Evans of Progressive
8:15pm Mello BASH

[rburtn] 12/7/2023 17:10

It just seems to me that some 'controlling mind' may be fattening the company up with a view to retiring on the proceeds at some time in the future. In which case we may have quite a wait for either realising the capital or reward in the form of dividend. As I have said in an earlier post, the company does not appear to have made much use of the profit it retained for 20 years so has this leopard changed its spots?

[pj84] 12/7/2023 15:23

“Dividend

The Board fully recognises the importance of dividends as part of the overall value creation proposition for shareholders. However, the Board has carefully reviewed its capital allocation priorities, and believes that both organic and inorganic investment opportunities that are available to the Group will deliver higher levels of shareholder return over the medium term than the payment of dividends in the near term. The Board will continue to review this approach over the coming periods. As such, the Board is not recommending the payment of a dividend on the ordinary shares of the Company for the year ended 31 March 2023.”

I was pleased with the results but slightly disappointed at the lack of any dividend but at least using funds to put to good use in generating future profits is far better than the number of companies who can’t find anything useful to use excess funds for and instead buy back shares. I understand the theory of buy backs but in practice they often appear to deliver very little.

I had a quick look to see if this morning’s presentation to analysts was available on the website but it isn’t available yet, but the slides are there.



Slides 7 and 8 show that £11.7m of cashflow was generated from trading activities but after taking into account discretionary spend on capital expenditure and investments there was a net cash outflow from the business of £16m increasing the debt by that amount. The largest component was the acquisition of YUK for £18m which will add to future profitability and in an era of rising interest rates it probably makes sense to delay any dividends whilst the debt is rising.

With basic eps of 5.7p and adjusted eps of 6.5p this still seems to be very undervalued.

[this_is_me] 12/7/2023 11:18

I bought some more.

[wakeland] 12/7/2023 10:05

You hate to think what would have happened if they had released bad results!
Is this just sector related or historival distrust?

[tiswas] 12/7/2023 09:02

"The majority of Renold's business is denominated in US Dollars and Euro's."

I guess £ strength in recent weeks and months will impact.

[greyingsurfer] 12/7/2023 08:29

No, they were clear, they think they will give better medium term returns to shareholders by reinvesting. I'm happy with that.

[texaspete2] 12/7/2023 08:10

Outlook statement was quite vague I thought

[prokartace] 12/7/2023 08:09

Reads very well but predictable share price movement. They might think they give better returns by withholding a dividend but the market thinks otherwise

[essentialinvestor] 12/7/2023 07:46

Thought results were next week!. Reads relatively well on a first glance.

[this_is_me] 12/7/2023 07:39

Very impressive final results confirming what was said in the end of year trading update. Everything is on an upward path and this looks like this will continue into the future.