Renold Share Discussion Threads

[prokartace] 18/12/2023 08:12

We are at a 5 year high and therefore resistance level. Lets see where we go from here

[davebowler] 11/12/2023 17:53

Master Investor-Renold (LON:RNO) – Not A League To Go Yet Just over a month ago, when the shares of this Wythenshawe, Manchester-based engineered products maker were down at 29p, I set a new Target Price of 36p. The recently announced Interim Results brought about profit estimate upgrades. Analyst David Buxton at Cavendish Capital has fixed a 38p Price Objective on the group's shares. He is looking for a small step back in sales for the current year to end March 2024, from £247.1m to £244.3m. However, he is expecting an increase in adjusted pre-tax profits to £19.2m (£18.6m), with earnings rising fractionally to 6.0p (5.9p) per share. The group's shares, which touched 35.59p last Thursday, closed on Friday night at 34.45p. I have absolutely no concerns about my latest Target Price being achieved very soon, possibly within days. (Profile 04.06.19 @ 30p set a Target Price of 60p) (Profile 08.11.23 @ 29p set a Target Price of 36p)

[davidosh] 08/12/2023 02:28

There was an exceptionally impressive BASH session at the Mello London event which included Renold and it seems to have gone up steadily since then

[volsung] 07/12/2023 15:10

Nice wee rise the day

[jimmywilson612] 15/11/2023 15:11

Take away the Debt and in 2025 when the pension valuations happen - the Balance Sheet will be in a much stronger place to then decide to throw cash to shareholders. Before that, I'm happy for Management to build value 1st.

[this_is_me] 15/11/2023 13:01

I think that they will want to reduce debt unless a particularly good prospect emerges.

[prokartace] 15/11/2023 12:18

I am sitting on a near 50% profit but cannot bring myself to realise it with the current valuation. A dividend would help but clearly the company want to grow by aquisition. This will be a problem as they can't really by companies with higher valuations than their own

[pj84] 15/11/2023 11:44

This must now be on a prospective PE of 4 or less, should be far higher.

[kemche] 15/11/2023 11:20

Looking good.

[hardupfedup] 15/11/2023 07:55

fyi ----Robert Purcell, Chief Executive of Renold, said:

" I'm pleased to report continued progress which builds on the momentum the Group has enjoyed in recent periods, delivering a record half year result. Sales, margins, profits and cash generation have all progressed well. Global markets continue to be uncertain and we remain vigilant for changes in patterns of demand beyond the current order book shortening. We are delighted with the purchase of Davidson in Australia, which further builds our inorganic growth strategy and we remain well positioned to continue developing through acquisition. There remains uncertainty over the implication of global economic pressures in the medium term, however the Board is increasingly confident in delivering a result for the current year ahead of previous market expectations."

[this_is_me] 15/11/2023 07:18

The increase in profitability is particularly impressive. Debt down despite acquisitions.

[hardupfedup] 15/11/2023 07:17

Excellent results should be double present price imo

[jimmywilson612] 26/9/2023 15:43

Dozey,

I emailed the CEO asking around the pensions;

The pension valuation I believe your are referring to is the Triennial valuation and this has to take place on a three year cycle so the next one will be in 2025 and as it takes a long time to get this agreed will not actually be available until early 2026. The Triennial valuation is an actuarial valuation and is what the Trustees and the Pensions Regulator use. This actuarial or Technical Provisions valuation shown in our accounts for the UK scheme was £5.9m at the last 2022 valuation. We do periodically give the market our internally approximate calculated update on this number. The £44.2m UK accounting deficit, shown in our accounts, we update each year end and we produce an estimate usually at the half year.


In summary - what has happened at Wincanton absolutely will be of benefit to Renold PLC - but it won't be re-valued and therefore reflected on balance sheet until 2026.

[dozey3] 26/9/2023 14:23

PJ84, The read across from wincanton to RNO is highly relevant since it is the pension liabilities that are holding the market valuation back. Is anyone cleverer than me able to put figures on the likely re-valuation?

[pj84] 06/9/2023 18:41

I posted the following on the Wincanton thread but the pension comments may have some read across here.



Peel Hunt: Pension review will drive growth at Wincanton

Analysts from Peel Hunt see logistics group Wincanton (WIN) kicking growth up a gear after its triennial pension review.

Analyst Alexander Paterson reiterated his buy recommendation and target price of 300p on the Citywire Elite Companies + rated stock, which was trading at 236p on Tuesday.

The review of the pension started in April and is set to conclude imminently. The deficit has declined from more than £200m to just £11.9m at the end of March and we expect it to have declined further given a £5.7m contribution at the end of June and higher bond yields, said Paterson.

The group is also exiting low or no return closed-book transport and transitioning to lower-risk open book contracts and areas of higher value, which would provide capital to invest.

We see significant growth potential and commercial benefit from investing this capital where it can exceed the risk-adjusted returns from a share buyback, which would drive a rerating of the stock on higher profitability, said Paterson.

[essentialinvestor] 06/9/2023 16:52

Update very solid, all be it wider macro looks to be weakening.

If we get back near 28 pence on the offer might add a few.
I hold RIII and RNO comprises approx 7% of that fund.

Perhaps a fair chance this is taken out at some point, particularly if the pension situation starts to look better.

[robsy2] 05/9/2023 08:11

Looking good. I was just wondering if pension contributions could be reduced at some point now that interest rates have increased?

[this_is_me] 05/9/2023 07:30

It looks like business is on the up. Customers are not ordering as far in advance due to normalising of supply chains (no pun intended!)

[wigwammer] 05/9/2023 07:28

"As a result of the continued positive trading momentum, and an increase in activity from the recently announced Davidson acquisition, the Board now anticipates achieving results for the year ending 31 March 2024, higher than previously expected."... encouraging reduction in net debt also, suggesting the the business is generating high levels of free cash.

[essentialinvestor] 04/9/2023 12:54

FFS I should have checked that as sold my last trading lot on Friday post the acquisition news.

Have an indirect holding through RIII.

[disc0dave46] 04/9/2023 12:48

AGM Trading update tomorrow.

[hardupfedup] 01/9/2023 07:56

Acquisition of Davidson Chain PTY

Renold, a leading international supplier of industrial chains and related power transmission products, is pleased to announce that it has acquired the trading assets of Davidson Chain PTY ("Davidson") for a total cash consideration of AU$6 million (the "Acquisition").

Highlights

-- Established in Melbourne, Australia, in 1991, Davidson is a family owned manufacturer and distributor of high-quality conveyor chain ("CVC").

-- The Acquisition increases the Group's access to the Australian CVC market, building on Renold's existing strong market position.

-- Opportunities exist for significant manufacturing synergies between Davidson and Renold's current Australian operations.

-- The Davidson management team have transferred to the Group, bringing with them a wealth of industry experience and market knowledge, and will continue to lead the Davidson business, joining Renold's Australasian management team.

-- The Acquisition is expected to immediately enhance Group earnings per share, and be accretive to the Group's operating margin.

-- ROIC is expected to be in line with management's targets, and above Renold's weighted average cost of capital in the first year of ownership.

The Acquisition and financial considerations

Davidson was acquired on a cash free, debt free basis, for a total cash consideration of AU$6 million.

The Acquisition consideration represents a multiple of approximately 5.9x Davidson's June LTM EBITDA. There are a number of identified synergy benefits, the effect of which is expected to reduce the multiple to below 5.0x in the short term.

The Acquisition is funded from the Group's existing borrowing facilities. As at 31 March 2023, the Group's net debt to EBITDA multiple was 0.8x and following completion of the Acquisition remains broadly similar. The Group remains well placed, with sufficient borrowing headroom, to execute on further bolt-on acquisition opportunities from an identified pipeline of targets.

Davidson delivered revenue of AU$4.2 million for the 12 months to June 2023, generating an EBITDA of AU$ 1.1 million.

Commenting on the Acquisition, Robert Purcell, Group Chief Executive of Renold plc, said:

"The Davidson acquisition demonstrates further strategic momentum, supplementing organic growth through high quality bolt-on acquisitions which can expand our geographic presence, grow our product offering and strengthen our market position in key end markets.

"We are delighted that Davidson has joined the Renold Group, and believe that not only have we acquired an excellent business, but also retained the services of a very experienced team. The Davidson business is very much aligned with Renold, including an excellent long-established track record of manufacturing and supplying high quality chain products with an entrepreneurial culture that will fit well with our own.

"We welcome the Davidson team to Renold."

[this_is_me] 01/9/2023 07:56

That looks like an excellent acquisition. It looks like the owners want to retire, after nearly 30 years, and are selling a well run business.