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Looks like a sizeable and likely 5 year framework contract win for Envolve (formerly Lewis Civil Engineering) - and it's in partnership with another RNWH subsidiary, QTS:
Https://envolve-infrastructure.co.uk/updates/envolve-infrastructure-awarded-three-year-strategic-framework-appointment-on-dwr-cymru-welsh-water-security-fencing-and-gates-framework/
"Envolve Infrastructure awarded three year strategic framework appointment on Dŵr Cymru Welsh Water Security Fencing and Gates Framework.
Date Posted: 08.01.2024
Envolve has strengthened its strategic delivery partnership with Dŵr Cymru Welsh Water with a contract secured to deliver the all-Wales security fencing and gates framework, in partnership with specialist security fencing group business, QTS.
Envolve has been awarded the all-Wales position on the framework, spanning the entire Dŵr Cymru Welsh Water operating region. The framework will run for an initial three-year period with a further two year extension option, potentially taking the framework through to 2028.
Envolve has delivered work successfully for Dŵr Cymru Welsh Water since the company launched in 1984, with a trusted delivery team and proven transparent delivery model, combining civil engineering and water sector expertise to provide Dŵr Cymru Welsh Water a confident and trusted delivery partnership.
Https://www.fool.co.uk/2024/01/02/3-small-cap-uk-growth-stocks-that-could-deliver-big-returns-in-2024/
"Benefitting from green infrastructure investment
Next we have Renew Holdings (LSE: RNWH). It’s an under-the-radar company that provides engineering services to maintain and renew critical infrastructure networks and is benefitting from green infrastructure investment.
Renew has a lot of momentum right now. For the six-month period to the end of September, group revenue was up 13% year on year while operating profit was up 18%.
And looking ahead, management was confident about the future.
“We remain excited about the significant growth opportunities across the Group, underpinned by the increasing national demand for the maintenance and renewal of existing UK infrastructure, which will continue to be a domestic priority regardless of the outcome of the next election“, said CEO Paul Scott.
This is another small-cap stock with a low valuation. Currently, the forward-looking P/E ratio is just 13. I see a lot of potential at that multiple.
That said, an economic deterioration in the UK is a risk."
AMCO has won £25.9m of flood defence work in the North West band Wessex not posted here before:
Https://www.constructionnews.co.uk/contracts/three-firms-share-87m-of-flood-defence-work-08-11-2023/
Nice £41,000 buy at the full 850p offer price to start the day.
A few more details on Numis' update note. They say Buy and raise their target price to 950p.
They conclude interestingly that RNWH's "financial characteristics and track record" increasingly look like UK services value providers rather than outsourcers and contractors, and RNWH trade at a 30% discount to the former.
They see the current £35.7m cash pile increasing to £57m by next September, enabling further acquisitions.
Their EPS forecast - as always! - is incredibly conservative for this year at 63.6p (up from 63.3p EPS last year), but once again this leaves room for plenty of upgrades during the year.
A few snippets:
"Resilience and differentiation
Renew delivered record FY23 results in line with or slightly ahead of our upgraded expectations, a testament to the resilience of the business model and differentiated offer even amidst challenging macro conditions. With the Group having made a strong start to FY24E we upgrade FY24-25E EBITA by 5-7%, continuing the track record of positive earnings momentum. This, allied to a strong balance sheet offering ample scope for further value and capability-enhancing M&A, means we
remain enthused despite the strong recent share price performance. We increase our PT to 950p (10.5x FY24E EV/EBITA) and retain a BUY."
"Collaboration benefits:
As outlined at the FY22 and 1H23 Results, collaboration between operating companies is helping the Group access framework opportunities that were historically out of reach, contributing to the strong organic growth delivered in the period. We think
collaboration is a key competitive differentiator for Renew, and could help sustain above-market organic growth in future years."
"Maintenance and renewal over enhancements:
The statement notes that in a weak macro backdrop the Government is often prioritising investment in maintenance and renewal of existing infrastructure, rather than large-scale enhancement projects. We think this plays into Renew's strengths in both the short term, and longer term (as ageing infrastructure requires greater spend on renewal and maintenance)."
Https://citywire.com/funds-insider/news/expert-view-bloomsbury-iomart-renew-bunzl-sthree/a2432703
"Shore Capital: Rerated Renew still undervalued
Shore Capital says it has been ‘too conservative’ on engineering group Renew (RNWH) and the rerated shares are still ‘undervalued’.
Analyst Tom Fraine retained his ‘buy’ recommendation on the Citywire Elite Companies A-rated stock, which was trading at 841p on Friday.
Fraine upgraded his Renew forecasts ‘having been too conservative following the strong full-year 2023 results’.
‘The recently announced 80% uplift in government spending on water infrastructure is well-timed, given Renew’s new framework wins… while spending plans on roads and highways are supportive for Renew’s earnings from full-year 2025,’ he said.
Although the shares have re-rated to above their historical average, Fraine said they are ‘still undervalued’ given the 33% return on invested capital achieved in 2023, ‘17% long-term earnings per share compound annual growth rate, and the net cash position’".
confirmation that berenberg now have a 1000p valuation (increased from 950p):
https://www.***************************/renew-holdings-plc-21.1-potential-upside-indicated-by-berenberg-bank/4121135916
and numis have raised their target price to 950p after the results. i'll post more detail when i get time.
New two year highs now and almost at those all-time highs.
Good to see Walter Lilly expanding into Facilities Management:
Https://www.walterlilly.co.uk/walter-lillys-facilities-management-division-continues-to-grow/
"Walter Lilly’s Facilities Management Division Continues to Grow
6th December 2023
Walter Lilly is delighted to be expanding our ability to meet the needs and expectations of our clients, with the introduction of a dedicated FM Projects team.
Our Facilities Management Division now provides two unique service offerings across our three sectors of high quality residential, landmark and heritage, and science and higher education:
FM Contracts – planned, proactive and preventative building maintenance.
FM Projects – construction services of bespoke projects.
We are often asked to undertake additional work within a property that is outside of the maintenance scope, and we are therefore excited to further expand our service offering.
FM Projects will be responsible for delivering contracts up to the value of £2.0 million, with our cost effective and flexible team for new and existing clients, backed by the quality and expectations of the Walter Lilly brand. Clients will benefit from utilising our trusted supply chain and support from our technical in-house expertise of engineering, design management and temporary services.
The team are currently working across London and the home counties on projects in both extremely high quality homes, listed buildings and complex scientific research facilities. The projects range from remodelling small office spaces and laboratories within a science research facility, external waterproofing and repairs of lightwells to MEP upgrade of a listed building. A complete non-structural remodel is being carried out on a five-story Chelsea townhouse, including the design of a new kitchen, bathrooms, hardwood flooring, joinery, decorations, and new MEPH, AV & lighting throughout.
etc"
For RNWH companies AmcoGiffen and QTS:
Https://www.amcogiffen.co.uk/news/embarking-on-a-new-electrified-era-at-east-kilbride
"01/12/2023
Network Rail has named AmcoGiffen as one of the contractors selected to deliver the East Kilbride Enhancement Project.
The work will provide 22.4 single-track kilometres of electrified railway as part of the Scottish Government’s wider plans to decarbonise passenger services across Scotland’s Railway.
Alongside our sister company QTS we will deliver:
Relocation of Hairmyres Station
Upgrading and accessibility work at East Kilbride station
Accessibility work at Giffnock station
Parapet modifications
Earthworks to the New dynamic loop (QTS)
Other work taking place includes electrification of the route between East Kilbride and Barrhead and a 1.4-kilometre extension of the existing loop at Hairmyres.
Mobilisation and enabling work will start at Hairmyres in January 2024. We will be relocating the station 600 metres west and constructing a fully accessible, two-platform station that will include a footbridge with lifts.
South Lanarkshire Council and Strathclyde Partnership for Transport will construct a large park-and-ride and bus interchange facility adjoining the new station. The new station will be able to accommodate up to 7-car rolling stock and will include concourse areas with passenger seating, and accessible passenger and staff welfare facilities."
After the close there was a huge 300,607 share buy reported at 842p followed by a number of other trades at 842p or thereabouts, including an 84k and a 37k.
Should make for an interesting opening tomorrow!
RNWH announced in this week's results they'd won South West Water as a new client.
Pennon Group, who own South West Water, have just announced they're to spend an additional £100m on improving water infrastructure in the next two years, making a total of £850m.....
Https://www.dailymail.co.uk/money/markets/article-12804253/Pennon-Group-spend-100m-planned-infrastructure.html?ns_mchannel=rss&ns_campaign=1490&ito=1490#
And there's a further £2.8 billion to be spent from 2025-2030.
Also, RNWH's J Browne have embarked on a 7-month project water mains contract for Affinity Water around Stansted:
Https://www.bishopsstortfordindependent.co.uk/news/chapel-hill-closure-as-affinity-water-works-continue-9340808/
The IC say Buy in a new article, these being the main points:
"Renew Holdings (RNWH) chief executive Paul Scott said the 10 percent increase in organic revenue and 18 per cent gain in operating profit delivered during difficult market conditions provided “evidence of the resilience in the [business] model that I’ve talked about for years”
“We’re actually seeing clients talk very confidently about increased focus and spending,”Scott said."
"Renew has increased its headcount by around 10 per cent over the course of the year, as past acquisitions have provided the opportunity to expand into new areas – Scott cites winning South West Water as a client as an example. An operating cash inflow of £55mn meant net cash (excluding leases) increased by £15.5mn to £35.7mn, despite the company paying £14.6mn for the remaining half of the Enisca water business that it did not already own."
"results have been steadily impressive – as witnessed in the doubling of its earnings per share over the past five years."
"Berenberg analysts upgraded their earnings forecasts by 5 per cent for this financial year and 9 per cent for next,citing “confidence in Renew’s ability to deliver through-the-cycle resilience”. With the company also having the firepower to do more deals – it has bought TIS Cumbria, a small nuclear specialist, for £4.9mn since the year-end – other upgrades could follow. We maintain our buy position."
Berenberg have today raised their target price to 1000p (from 950p) - and the share price is now starting to respond to the terrific results:
Https://www.sharesmagazine.co.uk/news/market/1701163632036167200/london-broker-ratings-goldman-starts-mg-at-buy-citi-hikes-bm
Today's prelims see the 63.5p EPS well ahead of the 60p-61p EPS forecast by Shore Capital and Numis.
They're also ahead of the forecasts for this coming year, so there must surely be upgrades in the works. There's still plenty of share price upside to the prior broker targets of 950p or thereabouts.
Above all, the tone of the outlook is extremely bullish. Every division is performing well, and the prospects in areas like water, flood defence, rail, 5G, highways, nuclear etc are all enormous going forward for years to come.
Plus with a £30m+ and rising cash pile there's the likelihood of firther earnings-enhancing acquisitions, where there's:
"a healthy pipeline of opportunities including complementary bolt-on acquisitions as well as larger, more complex opportunities that will grow our geographical reach and service capability in a similar way to that achieved by our recent strategic acquisitions"
You couldn't have a better outlook than this:
"Outlook - outstanding FY23 gives further confidence in the year ahead"
"To this end, the structural growth drivers in our end markets have never been more attractive and we remain uniquely positioned to seize both organic and acquisitive growth opportunities. Our trading momentum has continued into the new financial year, and we are excited by the significant opportunities across the Group".
Good find. Nice and steady rise before (and after) results.
Great to see AmcoGiffen yesterday win part of a £61.5m contract for rail electrification in Scotland - electrification is going to be huge across the UK over the next few years and there are many and larger such contracts to be won:
Https://www.railadvent.co.uk/2023/11/network-rail-gives-contracts-for-work-on-east-kilbride-enhancement-project.html
"Over the next two years, they will each play a role in delivering 22.4 single track kilometres of electrified railway as part of the Scottish Government's plans to decarbonise passenger services across Scotland's Railway."
Very nice finish today. I think it should continue tomorrow.
Having done a bit of additional Googling, I suspect a better wording is...another important framework contract win, this one for RNWH subsidiary Envolve announced earlier in the week as part of a £3 billion award by South West Water for the next 6 years at minimum....as this is likely one part of an overall £2.8 billion framework AFAICS.
Another huge - £3 billion! - framework contract win, this one announced earlier in the week by RNWH subsidiary Envolve for South West Water for the next 6 years at minimum....
Https://www.envolve-infrastructure.co.uk/updates/south-west-water/
"The Network Plus Envolve Joint Venture Awarded Strategic Delivery Partner Appointment on South West Water Ltd £3bn AMP8 Engineering Tier 1 Delivery Framework.
Date Posted: 20.11.2023
We are delighted to announce Network Plus Services Limited and Envolve Infrastructure have been awarded the Lot 4 Infrastructure Water and Wastewater AMP8 Framework with South West Water Ltd.
The framework will be awarded via a formal 50:50 JV founded on the collaborative model we have established working closely together on the Bristol Water Network Maintenance Framework since 2019.
The Joint Venture will provide South West Water with a tried and tested delivery model, combining two of the most respected water specialists within the sector. It is on this basis that we have secured the Eastern Super Team element of the Framework covering all of Devon, Bournemouth and Bristol which expands on our strengths and reinforces our commitment to the South West.
The framework will run for an initial 6-year period with a further 5-year extension option potentially taking our partnership through to 2035.
This success is testament to the sector leading collaboration and innovation we have demonstrated since the launch of the current framework with Bristol Water"
"Jamie Prichard, Managing Director for Envolve Infrastructure and the Framework Director for the Joint Venture:
“This award represents a significant success for Envolve Infrastructure and acknowledges the success of our proven collaboration with Network Plus. We will jointly bring our sector leading performance, and the benefit of our Intelligent Partnership developed within Bristol Water, into the South West region. I am extremely proud of the Network Plus Envolve JV which will support South West Water on their AMP 8 aspirations”
Up and 800p on the horizon
So just 6 days to results...which will be ahead of expectations
Shepley Engineers are working with Berkeley Group and National Grid on a large scheme to transform UK’s biggest Victorian gasworks cluster into a 2,100-home neighbourhood:
Https://www.bdonline.co.uk/news/rshp-to-transform-uks-biggest-victorian-gasworks-cluster-into-2100-home-neighbourhood/5125956.article
Posted yesterday by Clarke Telecom - they installed "a cutting-edge private 5G network" at the Satellite Applications Catapult. Likely the first of many:
Https://www.linkedin.com/feed/update/urn:li:activity:7130541334741839873/
"Exciting News! The Satellite Applications Catapult (SA Catapult) is propelling innovation with the help of Clarke Telecom. 🛰️
In 2011, the UK government introduced Catapults to bridge the gap between research and industry, boosting competitiveness and productivity. SA Catapult is one of nine, focused on satellite-based products and space tech.
Recently, SA Catapult partnered with Clarke Telecom to deploy a cutting-edge private 5G network at their Buckinghamshire facilities. Clarke's expertise was pivotal in expanding the existing 5G network, benefitting companies at Westcott Venture Park.
Pano Mystridis, 5G Network Software Engineer, praised Clarke's professionalism and technical prowess, emphasizing their role in the project's success. This collaboration leveraged the latest Open RAN technology for a seamless installation.
Private 5G networks are revolutionizing industries by offering unmatched flexibility, security, and performance. Clarke Telecom's extensive experience positions them as a leader in this field.
About Clarke Telecom: With over 20 years of experience in cellular infrastructure, Clarke Telecom is your go-to partner for complex private 5G projects. From initial analysis to construction and commissioning, we've got your private cellular network covered."
Nice chart breakout now, with buying at the full 794p offer already this morning.
Looking good after the recent contract wins and in the run up up to the ahead of expectations results.