The latest London South East Webinar takes place on July 6. Come and hear CEO’s from Orosur Mining, Caledonia Mining, Glantus Holdings and Tekcapital speak. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
and good to see a succession of buys just now at the full 700p offer.
Does anybody know how much cash is on the balance sheet?
Also, what %age of shares do directors hold?
Leading to a nice rise in SP this morning.
Thanks for posting this rivaldo.
RNWH have been tipped as a Buy in today's Tempus column in the Times.....
Even better considering the current investment zeitgeist, the column overall has an ESG theme and focuses on companies which have the LSE's Green Economy Mark. Currently this has only been granted to around 100 companies.....
Another Green Economy Mark company is the Aim-listed Renew Holdings, which carries out maintenance of the rail network, roads, telecom towers, plumbing and pipework. Its customers include Network Rail and the Highways Agency. News of the government spending £640 billion on infrastructure over the next five years is very good news for Renew.
Renew has been savvy about buying companies that will benefit from that spending boost at decent multiples. One such purchase was its £5 million deal to buy Rail Electrification Limited, which provides services and machinery to install overhead lines to electrify the rail network. Network Rail has said it plans to spend up to £1.8 billion a year on electrification to cut carbon dioxide emissions. This deal adds to the services Renew can offer its rail customers and should help it win more contracts.
Elsewhere, it’s likely to see growth from servicing 5G infrastructure, increased spending on water, and nuclear decommissioning work.
Renew has the benefit of the long contracts offered by public sector organisations but does not carry the same risk as larger competitors such as Kier or Costain. Its contracts are much smaller and prices are generally not fixed so the risk of mispricing a contract is much lower.
It ploughed on through the pandemic as its work is considered to be of critical importance. Tom Fraine at Shore Capital says its ability to control costs and resilience has been better than most industrial companies. The shares are changing hands for 659p, about 14 times forecast for earnings this year, and look cheap considering the trends that will underpin demand.
Why Revenues underpinned by regulatory spending
Impact Helping to cut carbon from rail travel"
and buying coming in at almost the full 690p offer price.
Great close last night at more new highs.
And more excellent news, this time from Seymour Civil:
We are absolutely delighted to have been awarded a place on @nwater_care
NWG’s Lot 1 Water and Waste Water Network select list which will support Northumbrian Water Group’s capital programme for infrastructure projects until 2025."
I really like the sound of this joint campaign launch from RNWH's subsidiaries "to meet the ambitious electrification and decarbonisation targets set by government and Network Rail". Catchy name too :o))
ARQ, which includes Amco-Giffen, REL (Rail Electrification Limited – the latest addition to Renew Holdings Plc) and QTS, will provide a truly integrated self-delivery model for the UK rail network. It will help to meet the ambitious electrification and decarbonisation targets set by government and Network Rail.
Decarbonisation is a huge challenge for us all over the next 30 years, as we seek to reduce carbon emissions and fossil fuel consumption. The UK government aims to remove all diesel-only trains by 2041, with a legally binding commitment to net zero by 2050. It has been recognised by the industry that, together, we must do more to be part of the solution to climate change.
In fact, to decarbonise the UK rail network completely, 13,000 single track kilometres (approximately 450km per year) will need to be electrified by 2050 to achieve net zero. However, it has been identified that from 2019-2020 only 251km was electrified.
ARQ therefore aims to play a key role in accelerating this change, leading the way in helping Network Rail to respond to the UK decarbonisation agenda within our country’s rail infrastructure.
Individually, each of the three businesses coming together to create ARQ have been enabling electrification programmes across the UK for several years. Now, combining their respective strengths within our unique family of multi-disciplinary engineering businesses will help us to collectively support essential UK infrastructure while gaining a key competitive edge.
The new partnership is led by Vinny O’Holloran, who says: “We understand that electrification is a significant contributor towards meeting Network Rail’s decarbonisation commitments, and that things have to change to drive efficiency. We want to be part of this change; to help drive it forward.”
and buying coming in at the full 680p offer price.
According to bsdjj elsewhere, Peel Hunt have increased their price target to 750p (from 700p).
Forecasts are unchanged, but they say they have more confidence in the outlook.
This reads well from VP Group's results yesterday - RNWH are involved in each and every one of these sectors and projects:
"Major infrastructure sectors, such as water, rail and transmission are primed for escalating growth in the coming year, added to which other major projects such as HS2 and Hinkley Point will continue to drive demand."
Very good news for J Browne from last month covering the next five years:
"J Browne Construction Awarded 5-Year Above Ground Framework Agreement with Affinity Water
May 20, 2021
J Browne Construction is delighted to announce a 5-year extension to our existing Above Ground framework agreement with Affinity Water. The agreement is one of four infrastructure frameworks awarded to key partners, which combined are worth circa £100 million during AMP7....
.....These four contracts make up a significant part of the multi-million AMP7 Capital Investment Programme and will cover all regions served by Affinity Water. Under this framework the four key partners will be delivering over 100 different projects providing civil engineering, M&E, process treatment and pumping station projects.
Steve Plumb, Director of Asset Strategy and Capital Delivery said: “Affinity Water is pleased to sign this long-term agreement with J Browne Construction to support in the delivery of our challenging above ground assets programme. These frameworks adopt a more collaborative approach focussing on achieving shared programme value and efficiencies. We look forward to a successful relationship with each partner”.
Nice article about RNWH with rather positive conclusions:
"One of the quality metrics for Renew Holdings is that it passes 8 of the 9 financial tests in the Piotroski F-Score. The F-Score is a world-class accounting-based checklist for finding stocks with an improving financial health trend. A good F-Score suggests that the company has strong signs of quality."
"A rule of thumb for a reasonable Earnings Yield might be 5%, and the Earnings Yield for Renew Holdings is currently 6.58%.
In summary, good quality and relatively cheap valuations are pointers to those stocks that are some of the most appealing to contrarian value investors. It's among these shares that genuine mis-pricing can be found. Once the market recognises that these quality firms are on sale, those prices often rebound."
This looks like very good news - two "multi million pound" contracts for the Nuclear Decommissioning (NDL) consortium which includes RNWH's Shepley Engineers at the nuclear decommissioning project at Dounreay.
These are obviously good news in themselves, but being the first major contract wins for NDL under the Decommissioning Services Framework (DSF) should also bode well for more and bigger wins in the coming years given the £billions of work which will be necessary:
"NDL consortium wins two decommissioning projects at Dounreay
3 June 2021
The UK-based Nuclear Decommissioning Ltd (NDL) consortium has won a multi million pound design contract related to the Prototype Fast Reactor Facility (PFR) decommissioning project at Dounreay in Scotland. Joint venture group NDL brings together four nuclear decommissioning businesses – James Fisher Nuclear (JFN), Shepley Engineers, React Engineering and Tetra Tech – appointed to support the clean-up and demolition of former experimental fast reactor site at Dounreay, being caried out by Dounreay Site Restoration Ltd (DSRL) on behalf of the Nuclear Decommissioning Authority (NDA).
This is the first major contract win for NDL under the Decommissioning Services Framework (DSF). The removal of irradiated fuel (IF) from site is a key goal for NDA and will significantly advance decommissioning progress on site. The consortium will be working collaboratively with DSRL to provide all scheme designs for plant, equipment and systems....
....NDL has also won a multi-million pound project related to decommissioning strategy for the Highly Active Liquor Storage and Evaporation Facility (HALSEF) at Dounreay. The NDL consortium partners will develop an integrated concept and scheme decommissioning plans for HALSEF. JNF said key to this approach will be enhanced stakeholder engagement at every stage, with NDL and DSRL working in collaboration to deliver a successful outcome. The decommissioning strategy will adopt a ‘Waste Informed Decommissioning’ approach to optimise waste streams throughout the decommissioning process, to minimise cost and required Intermediate Level Waste (ILW) storage provisions."
Thanks Rivaldo, looks like another typical Renew acquisition.
I couldn't see their profitability on documents at Companies House but would put my trust in RNWH that it's around the usual ballpark. All gently lifting the expected EPS.
Correction - I've been told that Shore Capital's price target is actually 740p (not 730p). Even better :o))
Bullish coverage from Shore Capital (from memory they have a 730p target price):
"Renew worthy of a bigger rerating, says Shore Capital
Engineer Renew (RNWH) is a less risky business than the market is giving it credit for, says Shore Capital.
Analyst Tom Fraine retained his ‘buy’ recommendation on the stock after the group acquired engineering services company Rail Electrification for £5.3m, expanding its capabilities in the electrification of train lines.
‘We continue to believe Renew has a much lower risk profile than the market perceives, possibly due to associations with peers servicing much larger fixed contracts,’ said Fraine.
‘Renew’s ability to control costs and resilience during the pandemic has been much greater than the majority of industrials and worthy of an even greater rerating. We believe Renew represents a good opportunity for investors seeking to benefit from the UK government’s commitment to invest £640bn in infrastructure over the next five years.’"
A good article about today's acquisition here, with much more detail than in the RNS - an impressive client list for a small company, which must be a great base from which to win some of the huge additional electrification work coming along:
"REL provides services and road rail plant for the installation and commissioning of overhead line electrification (OLE) in both the light and heavy rail infrastructure sectors across the UK. Clients include Costain, ABC, Crossrail and Hochteif"
"The REL team, including the management trio of Scott Kernachan, Mark Potts and Kenny Barr, will join QTS at its Scottish HQ in Drumclog, South Lanarkshire."
"By adding REL to the QTS Group, we are joining forces with a leading business in this area, which will be a great benefit to the work that we deliver for our clients."
Scott Kernachan added: "Through this deal, we are opening up the future of REL to even greater possibilities. As QTS already has its Principal Contractor license, and a number of frameworks in place, it really transforms the opportunities available for us as experts in electrification."
Looks like a bargain acceleration into the overhead electrification sector - with much of the consideration dependent on performance.
There's likely to be huge amounts of work being doled out soon in this area:
"As part of the UK Government's commitment to delivering a carbon neutral rail network by 2040 for England and Wales and by 2035 for Scotland, it is estimated that there will be around 15,000 single track kilometres of new electrification carried out across Network Rail's controlled infrastructure over this period. The recently released Williams Rail Review states that electrification is likely to be the main way of decarbonising the rail network."
Paul Scott, Chief Executive of Renew, commented:
"The rail network has a crucial part to play in supporting the UK's commitment to Net Zero 2050 and this acquisition will help enable Renew to play a bigger part in Britain's green economic recovery. REL is a highly regarded business with a strong track record and will enable us to broaden our service offering within our Rail business. Our existing multidisciplinary rail capability, complemented by the electrification expertise of REL, leaves Renew ideally positioned to play its part in delivering a decarbonised railway. Rail electrification offers attractive long term structural growth opportunities underpinned by highly visible committed regulatory spend in a sector that we know extremely well. I am delighted to welcome the management and staff of REL to the Renew family."
Good news for RNWH's Carnell Group this morning, with OFGEM announcing £300m of additional funding for highways cabling to build up the UK's electric charging infrastructure.
This will in time of course also benefit Clarke EV's electric charge point build-out services too:
Shore Capital have increased their target price to 740p (from 700p) - more than they initially suggested post-results as per my prior post :o))
"Shore Capital - Renew
Engineering group Renew (RNWH) is already performing ahead of forecasts and is well placed to benefit from the government’s plan to pump money into infrastructure, according to Shore Capital.
Analyst Tom Fraine retained his ‘buy’ recommendation and increased his ‘fair value’ target price from 700p to 740p on the stock, which was closed up 3.4%, or 22p, at 662p yesterday.
The group reported 12% organic revenue growth in the six months to end of March, while operating profit was up 11% and earnings per share increased by 14%.
This led Fraine to upgrade full-year 2021 revenue and profit forecasts by 3%, even before adding in the impact of newly acquired water engineering services company J Browne.
‘[We] see scope to upgraded these by a further 6%,’ he said.
‘We consider Renew to be in an excellent position to benefit from the UK government’s commitment to invest £640bn in infrastructure over the next five years and Network Rail’s £800m electrification programme to decarbonise the railways.’"
Numis have today retained their 730p target price, whilst Shore Capital "expect to upgrade" their fair value to 730p (from 700p).
This subscriber web site indicates results ahead of expectations - anyone got access?
"2 hours ago — GB : Renew Holdings - H1 21 results ahead of expectations ... H1 21 results were ahead with FD EPS of 22.7p beating our estimate of 19.4p. We increase our FY 21 ..."
The reinstatement of the the Interim div is certainly welcome, but it is the quantum which really impresses and continues the upward trend:
Payment date Declared
Jly-20 0p (Covid)
To put the current interim div into some perspective, note that the 01-Mar-16 FINAL div declared was only 4.75p, with an interim div that year of 2.25p. The Mar-2020 final div was 7.67p, the Mar-2021 was 8.33p, an increase of 8.6% year-on-year. If this trend continues, we might expect the next final div, payable in Mar-22, to be in order of 9p per share.
Traders naturally tend to focus on price return, but for investors, real outperformance comes from a steadily rising dividend income, preferably re-invested using a (low cost) DRIP scheme. RNWH is a real gem in this respect, a share that investors can hold for the long-term and just forget about - I do not think it will let you down (famous last words!!)
Agreed. These are excellent results especially considering the lockdowns. I am particularly pleased to see the interim dividend reinstated and the confidence that shows about the future prospects.
Excellent interim results, and a lovely, positive outlook.
With almost 23p EPS in H1, and particularly with (1) Nuclear recovering in H2 and (2) the J Browne acquisition kicking in, there's a strong likelihood imo that RNWH will beat expectations.
Excellent cash flows too, with net debt stable despite the acquisition consideration, and the interim dividend has been reinstated showing their confidence.
With the Engineering Services order book up almost 13%, I'm extremely confident about RNWH's prospects going forward:
"Trading has started strongly in the second half of the year underpinned by a record order book and we are well positioned to take advantage of the compelling infrastructure-led growth opportunities that will play a key role in the UK's economic recovery."