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I'd get that money up front from Thames Water! ;-)
QTS have won substantial new contracts with Network Rail:
Https://www.qtsgroup.com/qts-wins-north-west-and-central-capital-delivery-works/
"QTS Group is among the winners of Network Rail’s nearly £2bn capital works delivery frameworks for CP7 in the North West and Central region.
The leading railway contractor has won Civil Engineering Lot B (Renewals design and build) and Lot C (Renewals build only) in the North West and, covering the entire North West & Central region, Civil Engineering Lot D (Reactive) with On-call provision."
And J Browne have won further work with Thames Water.
Https://www.linkedin.com/posts/j-browne-construction-ltd_engineering-infrastructure-water-activity-7186633615919710210-YZyY?utm_source=share&utm_medium=member_android
"We are pleased to announce that Browne has been awarded the Surbiton trunk mains renewal works by Thames Water as part of the wider FA1488 PROG2011 Trunk Mains Programme"
A nice £5m highways company acquisition today, which in particular addresses the growth to come from the structures renewal programme within the UK Government's planned investment in the next Road Investment Strategy (RIS3) from 2025 to 2030:
Https://uk.advfn.com/stock-market/london/renew-RNWH/share-news/Renew-Holdings-PLC-Acquisition-of-Route-One/93621615
Https://www.networkrailmediacentre.co.uk/news/multi-million-pound-investment-to-futureproof-world-famous-glenfinnan-viaduct
"Thursday 4 Apr 2024
Multi-million-pound investment for world famous Glenfinnan viaduct
Network Rail will start a £3.4m investment to carry out repairs on the 123-year-old Glenfinnan viaduct this month.
Along with principal contractor AmcoGiffen, engineers will assess the condition and strength of the viaduct, while carrying out work to protect it from water erosion, completing concrete repairs and making improvements beneath the track to keep the stone ballast in place.
etc"
Per this from last week, the framework quoted below is worth nearly £2 billion in total:
Https://www.newcivilengineer.com/latest/network-rail-announces-partners-for-cp7-capital-works-delivery-in-north-west-and-central-region-27-03-2024/
"AmcoGiffen has recently been appointed to six lots on Network Rail's North West and Central CP7 framework. This significant achievement is a result of our capabilities, commitment to excellence, operational efficiency, and testament to the dedication of our people. Our lots include medium and small projects including design and build options and will extend our asset management relationship with Network Rail.
The five-year framework, which starts this month will support our sustainable growth allowing us to continue collaborating with Network Rail to generate employment and development, create local supply chain spend and drive lasting and positive change to the region and the rail industry."
Https://www.linkedin.com/posts/amco-giffen_rail-delivery-designandbuild-activity-7181669482480766977-MsF0?utm_source=share&utm_medium=member_android
Thanks for your recent posts Rivaldo.
The pipeline of work for RNWH should remain solid and it clearly knows how to do this at an acceptable profitable margin. More of the same please!
It feels like we have had a bit of a silent re-rate. Nothing dramatic, no major announcements or broker notes with dreamy predictions. But somewhere between £9-£10 feels about right on a p/e basis.
Trading at 6 months was in line with expectations; read it will slightly under promise and over deliver at full year.
A decent earnings accretive acquisition will help push things along in the right direction.
Guitarsolo
This news from Network Rail looks good for RNWH - Network Rail have announced £2.8 billion of expenditure in the next 5 years to protect railways from climate change and extreme weather.
They particularly note repairing railway cuttings and embankments, improvements in drainage, anti-flooding measures etc which are RNWH's bread and butter.
In addition, there's a £19.3bn spend on replacing old assets with new ones and investing in projects such as digital signalling, with £12.6bn earmarked for maintenance - again all grist to RNWH's mill:
Https://news.sky.com/story/network-rail-to-invest-2-8bn-on-protecting-railways-from-climate-change-and-extreme-weather-13107105
The respected columnist Richard Beddard has just carried out a thorough analysis of RNWH to conclude whether to buy shares for his ongoing Decision Engine portfolio.
He scores RNWH with 7 out of 10, which indicates it's good value, and will be returning to potentially buy RNWH if one of the existing portfolio members is sold or excluded for some reason:
Https://www.ii.co.uk/analysis-commentary/shares-future-analysing-new-company-my-top-40-ii531225
From memory the broker commented that RNWH have always either beaten or met expectations since 2006, and that continues this morning.
Once again RNWH is trading nicely in line and experiencing "strong demand for its services across all key markets", with "excellent" visibility for H2 given the order books and long-term framework contracts.
Last year's H1 update was worded almost exactly the same, and RNWH ended up beating expectations by some margin.
The cash pile was up to almost £36m at the year end, so should have increased further since and provides a healthy backdrop to likely acquisitions soon.
Looking forward to the H1 trading update given the positive outlook and rising order books in the prelims - the last couple of years have seen updates on 3rd April and 1st April, so next Tuesday or Wednesday after the Easter break seems likely.
RNWH stated in their last Annual Report:
"Renew is focused on leveraging opportunities in the electricity transmission and distribution market. This is expected to grow as a consequence of the changing energy generation mix where we note that Ofgem has announced more than £20bn of initial funding to strengthen the transition to low carbon technologies"
Today National Grid "proposed a 58 billion pound ($74 billion) investment programme to boost grid networks beyond 2030 to accommodate expected growth in electricity demand and an increase in renewable power projects.
Britain has a target to decarbonise its power sector by 2035, which will require many more renewable power plants such as wind and solar that need to be connected to the electricity grid":
Https://www.reuters.com/world/uk/britains-national-grid-proposes-74-bln-energy-system-upgrade-2024-03-19/
Nice comment from Shore Capital's analyst when reviewing Hill & Smith (HILS):
Https://citywire.com/investment-trust-insider/news/expert-view-hill-and-smith-costain-games-workshop-and-quilter/a2438085?re=118287&refea=218441
"However, he said the ‘stock may underperform if the market switches to a risk-on environment at some point, as we see more upside elsewhere’, particularly in engineering services group Renew (RNWH) ‘which is cheaper despite generating higher returns on invested capital, higher historic earnings growth, and having a lower risk profile’"
Great to see a number of buy trades at 900p reported after the close - and a £173,507 uncrossing trade at 899p, which hopefully augurs well going forward.
Ex-Schroders fund manager Iain Staples is very positive on RNWH - about 11 mins 45 secs in:
Https://podcasts.apple.com/gb/podcast/the-exchange/id1569138869?i=1000648512846
Likely good news for RNWH today (particularly its J Browne and Enisca subsidiaries)....
Https://www.constructionenquirer.com/2024/03/11/extra-180m-of-water-spending-to-prevent-sewage-spills/
"Extra £180m of water spending to prevent sewage spills
The government has fast-tracked investment of £180m over the next 12 months in a bid to prevent more than 8,000 sewage spills polluting English waterways.
The new funding commitments are in addition to water companies’ existing £3.1bn investment into storm overflow improvements for this price review period (2020-2025), as well as their ongoing annual investment to maintain the performance of the existing network.
Examples of measures include accelerated wetland construction programmes, investment in AI systems to help manage storm loads, the installation of thousands of new in-sewer monitors to check flows and spot blockages early and the recruitment and training of specialist staff.
Environment Secretary Steve Barclay said: “The amount of sewage being spilled into our rivers is completely unacceptable and the public rightly expects action.
“This £180 million of accelerated investment, which will stop more than 8,000 sewage spills over the next year, is a welcome step forward as we continue to push for better performance from water companies and hold them to account.”
Shhh... we're sleeping soundly, safe in the knowledge we've backed a winner!
Yet still some way to go to the various broker price targets of around £10, and the bulletin boards are quiet as a mouse. Perfect :o))
Siemens are a client of RNWH's, and the UK's transition to digital signalling has long been flagged up as a big opportunity by RNWH in presentations - it was a prime reason for buying Giffen.
For example, even back in 2019 RNWH noted that the Government had awarded £450m to digital signalling in the National Productivity Investment Fund.
So it's encouraging to read in today's news that Siemens are now building a new £100m signalling factory in Chippenham:
Https://www.railjournal.com/regions/europe/siemens-mobility-builds-new-100m-signalling-factory-in-britain/
An encouraging snippet from Field Systems Designs Holdings plc's results this morning:
"There has been much recent negative media publicity regarding the performance of the Water Industry and their failure to maintain their infrastructure. Government agencies are increasing their pressure on solving residual environmental problems and consequently water companies are starting to accelerate their expenditure under AMP7 for the remainder of the cycle until 2025"
"The Water Industry’s seventh Asset Management Programme (AMP7) commenced in April 2020, and framework plans by water utilities were rolled forward.
The impact of COVID-19, and conflicts between water utilities and OFWAT in challenging their 2020-2025 expenditure budgets, caused many new orders expected by FSD under AMP7 to be delayed for three years, but now order intake and consequential turnover are improving rapidly"
Nice £132,689 buy of 15,104 shares at 878.5p just reported.
News - big wins for RNWH's AMCO and QTS subsidiaries to deliver a £229m programme for Network Rail.
These are works for CP7 in its north west and central territory. AMCO and QTS have won 4 of the 10 places up for grabs, and I'm guessing they weren't going for the 2 civil engineering structural places anyway:
Https://www.constructionenquirer.com/2024/02/13/six-win-229m-north-west-central-minor-rail-works-deal/
Firstly, Fundamental Asset Management hold RNWH in their portfolio, and their fund manager is very positive about RNWH in this new podcast - listen from around 15 minutes in:
Https://investorschampion.com/channel/podcasts/episode-4-of-the-investors-champion-podcast
Secondly, an Octopus Investment fund manager talks about some of his portfolio investments, RNWH included:
Https://www.youtube.com/watch?v=nMYlYyzim-E&list=PLUKFTWcWnEqA6qO0AHvBiULcN81WHDaN7&index=2&ab_channel=WealthClub
Also, it's relevant to see a rail recruitment industry specialist who works with RNWH's AMCO having a record results year and being similarly bullish:
Https://www.railmagazine.com/news/people/2024/02/06/rise-in-rail-recruitment-sees-specialist-expand-into-new-premises
"Coleman James partners with SMEs and PLCs in the rail industry, including AmcoGiffen (part of Renew Holdings PLC), VolkerRail, Motion Rail and RES Group.
"Much of our growth is aligned to recruiting personnel to fulfil CP6 infrastructure projects, particularly for Tier 1 and Tier 2 contractors," explained Andrew Mackay, Managing Director at Coleman James.
"We’ve built successful, long-term partnerships with SMEs, owner-led businesses and Plcs, particularly across telecoms, civils and signalling. For our next phase of growth, we’ll be targeting infrastructure companies on the CP7 framework as well as major projects across the rail industry, who share our commitment to deliver quality and value, through sustainable recruitment strategies."
Many thanks as usual Rivaldo for your updates. RNWH keeps chugging away and under-promising and slightly over-delivering. Best way to be.
Shore Capital reiterate their Buy and 1000p price target:
Https://citywire.com/funds-insider/news/expert-view-calnex-future-accrol-ssp-renew/a2435117
"Buy’ Renew, says Shore Capital
Specialist energy infrastructure engineer Renew (RNWH) has a lower risk profile than the market is pricing in, says Shore Capital.
Analyst Tom Fraine retained his ‘buy’ recommendation and ‘fair value’ target price of £10 on the stock, which closed at £8.50 on Tuesday.
The group announced trading momentum has continued into full-year 2024 ahead of its annual general meeting.
Recent updates on UK infrastructure spend have been positive for the group and Fraine said the group presents ‘an attractive opportunity for investors to benefit from the UK’s government’s commitment to spend £600bn on infrastructure from 2022 to 2027’.
‘We believe Renew is protected against economic downturns given that its revenue is driven by the public sector,’ Fraine said.
‘We continue to believe Renew has a lower risk profile than the market perceives, possibly due to associations with peers servicing much larger fixed contracts.’"
Nice almost £200,000 buy at 863p just reported.