Renold Share Discussion Threads

[lammylover] 19/7/2024 08:10

I've added this morning sub 52p, looks dirt cheap at this price.

[tiswas] 19/7/2024 08:04

I remember posting on here some way back with the question was it the EBT buying that was pushing the sp?

It was more of a rhetorical question at the time but with hindsight perhaps I was right?

Anyway, back to breakeven on what I thought was a well timed re-entry but certainly looking attractive once this trend selling ends.

[izztre] 19/7/2024 07:57

Agreed re the panic selling. What the directors did re their share options isn't ideal however the numbers are still good and it is cheap

[melody9999] 19/7/2024 07:45

errr they reported record results just 2 days ago but I believe that was a signal for some holders to trim their positions. then looks like a bit of panic selling setting in.

IMV this is a buying opportunity for investors - so I put my money where my mouth is! Its cheap!

[sausage7] 19/7/2024 07:31

Crazy move today, some bad news out there ??

[mngf] 19/7/2024 07:31

This is dropping like it's a fraud

[melody9999] 19/7/2024 07:21

added just now. considering RNO are such a stable company, amazing price volatility
cavendish price trarget 75p or c 50% above current price

[mirabeau] 18/7/2024 17:40

Renold (LON:RNO) – Record 2024 Profits Leading To Further Global Growth And First Dividend Payment For 19 Years

Based in Wythenshawe, Manchester, this £125m capitalised group is the world’s second largest industrial chain maker, with a 10% market share.

With over 150 years of history since Hans Renold invented the chain, today the group is selling to over 100 countries globally.

Internationally it serves the agriculture, forestry and fishing, construction and machinery, energy, environmental, food and drink, manufactured products, material handling, mining and quarrying, and transportation industries.

For manufacturers Renold is a premium supplier of high specification, sustainable, Industrial Chain and Torque Transmission product that facilitate others to achieve operational needs more reliably and with lower total cost of ownership, its products whilst critical are a small part of the total cost.

I consider that its shares are substantially undervalued at the current 57p.

Yesterday’s announcement of the group’s record results for the year to end March 2024 showed that despite a slight fallback in sales, down 2.3% to £241.4m (£247.1m) its adjusted pre-tax profits were up an impressive 18.8% at £22.1m (£18.6m), with earnings 20.0% better at 7.8p (6.5p) per share.

Not only were those a good set of figures but the company also declared its first dividend since 2005 – 0.5p per share.

Furthermore, although the company continues its selective growth by acquisition, the net debt has actually fallen £4.9m to £24.9m.

The £120m capitalised group has also been investing more capital into improving its efficiency, productivity and capability at its manufacturing locations.

It has started this current year from a positive position with good momentum and confidence in the capabilities and fundamentals of the markets that the group serves.

Yesterday morning I chatted for a while with CEO Robert Purcell, who sounded extremely positive about the group and its medium-term prospects.

“I am pleased that the Group continued to perform strongly throughout the year reflecting the hard work, strategically, commercially and operationally, that has been undertaken over recent years by our employees across the world.

The business is now at an inflection point where we are starting to see the compounding impact of the many recent exciting initiatives as they come to fruition.

We have a very clear strategy and are executing it diligently.

Our continuous improvement initiatives are building an increasingly efficient, productive and resilient business and are providing an ever-improving platform to support our commercial initiatives.”

Analyst David Buxton at Cavendish Capital Markets is very bullish about the group’s prospects too – upping his Price Objective from 65p to 75p a share.

I think that is too conservative.

His estimates for the current year are for £243.2m sales, £22.8m profits, earnings of 7.1p and a similar dividend payment of 0.5p per share.

For the year to end March 2026 he sees £248.5m revenues, £23.8m profits, 7.3p earnings and another 0.5p dividend per share.

In my view these shares at 57p are too cheap, especially considering its global market position, its record results, its return to paying dividends for the first time in 19 years and that they are trading on only a price-to-earnings ratio of 7.8 times.

An excellent investment purchase now for growth over the next few years.

(Profile 04.06.19 @ 30p set a Target Price of 60p*)

(Profile 08.11.23 @ 29p set a Target Price of 36p*)

[tiswas] 18/7/2024 16:32

I havent been able to listen to the Investor call yet, I am hoping it is available somewhere.

If anyone did listen were there any question about the options and any difficult questions that would explain the share price reaction?

[melody9999] 18/7/2024 09:27

Good upbeat interview with Robert Purcell. I come away feeling re-assured



Thanks to PJ for the option info. I tend to not get as hung up as others on management payouts as long as they are doing their job. In this case:
- at least the payouts seem to be aligned to company performance
- if 2.5M vest this year that is about 1% of shares in issue or 0.6p on the share price.

[disc0dave46] 18/7/2024 09:09

PJExcellent posting, thanks.

[robsy2] 18/7/2024 07:12

Thanks to Paul Scott on Mello who put me onto this one. Like others here, i think these option awards are disproportional. Greed.
As such, i have sold out this morning.

[kevph] 18/7/2024 06:26

Thanks for the in depth look. Much appreciated.

[pj84] 18/7/2024 00:12

Following the debate on the dilutive share options and the effect on the eps, I can see from note 5. to the results that it shows the basic eps as 8.3p and the adjusted eps as 7.8p and this drops further to 6.9p after taking account of 27,488,748 of dilutive share options.

I am not against nil paid options so long as they are tied to demanding performance criteria.



From item 7 of the directors’ remuneration report for 2023 the CEO was awarded 100% of his bonus entitlement and 100% of his share options vested giving total remuneration of £1,244k which was very high (and higher than I would want) and equally for 2022 the bonus and options fully vested giving remuneration of £1,119k. For the five previous years no options vested, and no bonuses were awarded apart from 2019 when a 20% bonus was awarded and the remuneration during the 5 years ranged from £345k to £434k.

Based on the results and share price performance I expect when the detailed accounts are published that again a 100% bonus and 100% of share options will vest.
From the 2023 accounts the CEO had 8,941,529 share options (with 7,106,667 yet to vest) and the FD had 2,292,667 (none yet vested) leaving another 11,769,011 or just over 50% of the 23,003,207 which presumably are held by staff.

Based on the results I would expect 2,066,667 to vest for the CEO and 666,667 for the FD this year.

I would prefer the options for the CEO and FD to be lower but despite that I still feel the shares are undervalued and I am more than happy to continue to hold and am not tempted to sell.

[serratia] 17/7/2024 20:39

Last year the CEO earned £1.294m and was granted a very large number of no cost options. The company made £11.8m profit. This seems out of proportion. I think he holds around 8 - 9 m no cost options, possibly more this year.
I normally bail out when I see this sort of thing. Is anyone comfortable with this ?

[shanklin] 17/7/2024 15:56

Secretive share options are even worse because awardees will tend to manage the company to achieve the share option hurdles even if that means decisions which they know are not in the best long-term interests of the company.

[davidosh] 17/7/2024 15:31

I think it is only fair to know what the hurdles are for these annual option packages as they are quite significant now. I have never liked nil cost options because there is no cash investment by the holders.

[davidosh] 17/7/2024 15:03

These will vest next week...

Renold announces that Robert Purcell, Chief Executive Officer, and Jim Haughey, Group Finance Director, were granted 2,480,000 and 800,000 nil cost options (the "Awards") respectively on 23 July 2021, pursuant to the 2013 Performance Share Plan (the "Plan").

The performance period applicable to the Awards is a three year period commencing on 1 April 2021. The Awards will vest on 23 July 2024, subject to the achievement of certain performance conditions and the terms of the Plan.

Following the grant of the Awards, the total options held by Robert Purcell and Jim Haughey, including options under other Company share plans are as follows:

[davidosh] 17/7/2024 14:59

And the year before....

20 September 2022



Renold plc

("Renold", the "Company" or the "Group")



Grant of Options





Renold plc, a leading international supplier of industrial chains and related power transmission products, announces that Robert Purcell, Chief Executive Officer and Jim Haughey, Group Finance Director, were today granted 2,560,000 and 860,000 nil cost options over ordinary shares in the Company respectively (the "Awards"), pursuant to the Company's 2013 Performance Share Plan (the "Plan").

The performance period applicable to the Awards is a three year period commencing 1 April 2022. The Awards will vest on 31 March 2025, subject to achievement of certain performance conditions and the terms of the Plan.

Following the grant of the Awards, the total options over ordinary shares in the Company held by Robert Purcell and Jim Haughey pursuant to the Plan and other Company share option plans are as follows:



Director

Options held prior to the Awards

Options granted under the Awards

Total options held

Robert Purcell

8,591,656

2,560,000

11,151,656

Jim Haughey

1,466,667

860,000

2,326,667

[davidosh] 17/7/2024 14:57

25 July 2023



Renold plc

("Renold", the "Company" or the "Group")



Grant of Options





Renold plc, a leading international supplier of industrial chains and related power transmission products, announces that Robert Purcell, Chief Executive Officer and Jim Haughey, Group Finance Director, were granted today 2,264,914 and 730,789 nil cost options over ordinary shares in the Company respectively (the "Awards"), pursuant to the Company's 2013 Performance Share Plan (the "Plan").

The performance period applicable to the Awards is a three year period commencing 1 April 2023. The Awards will vest on 25 July 2026, subject to achievement of certain performance conditions and the terms of the Plan.

Following the grant of the Awards, the total options over ordinary shares in the Company held by Robert Purcell and Jim Haughey pursuant to the Plan and other Company share option plans are as follows:



Director

Options held prior to the Awards

Options granted under the Awards

Total options held

Robert Purcell

8,941,529

2,264,914

11,206,443

Jim Haughey

2,292,667

730,789

3,023,456

[serratia] 17/7/2024 12:42

Am I correct in thinking they gave out options for 10% of the company this year and last ?

[disc0dave46] 17/7/2024 11:23

Sundance Yeah thanks I'd got 7.3 forecast but 12% dilution for share options (does seem a lot).Their outlook was a bit vague unfortunately,

[sundance13] 17/7/2024 10:52

Aah just seen Cavendish adjust the official EPS for share option dilution, hence use 6.9p, fair enough.

[sundance13] 17/7/2024 10:48

EPS was 7.8p this year so their figures look wrong in the 1st place!