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The SP has been on a stellar run this year, re-rating from £5 to over £8 recently. There was always going to be some profit taking along the way.
There seems to be nothing but good news about this but ever since I bought this share a couple weeks ago the SP seems to be heading south, anybody got any idea why ?
Looking at the reaction of the SP today that's not good news I suppose ??
Good to see a heavyweight player in Peel Hunt appointed as joint broker - they'll bring additional heft to attracting institutional investment interest here:
Https://uk.advfn.com/stock-market/london/renew-RNWH/share-news/Renew-Holdings-PLC-Appointment-of-Joint-Broker/86184711
RNWH's QTS have just begun work on a new £8m anti-flooding project for Network Rail in Dumfries, Scotland.
And QTS are in prime position for £149m of such works in the current period:
"From 2014 and 2019, more than £120m was invested in earthworks, drainage and bridge strengthening projects in Scotland and from 2019 to 2024 more than £149m will be spent."
Https://www.railadvent.co.uk/2021/09/network-rail-begins-essential-8m-work-at-dumfries-to-reduce-flooding-risk.html
Think I got my entry wrong here, sold for 2% loss, looking to re-enter at some stage soon. 725p to 750p looks good but would need to see it hold otherwise 700p area in my opinion.
Terrific news - RNWH's Carnell subsidiary have won the maximum 5 lots on the new National Highways framework over the next 6 years, 3 of them in a JV with RNWH's other subsidiary AmcoGiffen. This is worth a very nice £147m.
And these are "the longest duration, highest value contracts in Carnell’s history. Coupled with the move into road restraints, this provides a fantastic, solid foundation on which to grow and develop our business further in the coming years.”
Https://www.carnellgroup.co.uk/national-highways-sdf-success/
"National Highways SDF Success
We are delighted to announce that National Highways (formerly Highways England) have awarded us five Lots on the new Scheme Delivery Framework (SDF). The total value of the contracts will be £147m over 6 years, with the new delivery model commencing in January 2022.
The five Lots are the maximum number that could be awarded under the restricted procurement rules that National Highways have applied to the new framework. Three of which are in a Joint Venture (JV) with our Renew sister company AmcoGiffen.
Contracts Awarded
Civil Engineering: Central Super Region – Areas 6, 7, 8 and 9.
Drainage: North East Region – Areas 12 and 14.
Road Restraints: Central Super Region – Areas 6, 7, 8 and 9 in a JV with AmcoGiffen.
Road Restraints: North West Region – Areas 10 & 13 in a JV with AmcoGiffen.
Road Restraints: North East Region – Areas 12 & 14 in a JV with AmcoGiffen.
SDF will replace the current Construction Works Frameworks (CWFs) and ASC/PAD contracts. The phased introduction means that our current Civil Engineering, Drainage and Road Lighting & Electrical CWF contracts continue in Area 10 until 2023 and Area 6&8 until 2024.
A strong outlook
Delivering these new framework contracts as a Tier One supplier to National Highways, builds a robust forward programme through to 2027/28. The move into road restraint work alongside AmcoGiffen diversifies our portfolio of work and provides further opportunities.
Andrew Sharp, Carnell Deputy Managing Director commented:
“We have built a strong reputation on safely delivering drainage and civils schemes on the strategic road network over the last three decades. I am thrilled to have secured these SDF contracts, which will see us further develop our collaboration with National Highways and fellow delivery partners. These frameworks represent the longest duration, highest value contracts in Carnell’s history. Coupled with the move into road restraints, this provides a fantastic, solid foundation on which to grow and develop our business further in the coming years.”
RNWH gets a brief tip/mention in today's Mail on Sunday, in an article about AIM and which companies to buy:
Https://www.thisismoney.co.uk/money/share-investing/article-10027699/Volatile-AIM-Wild-West-brave-chance-strike-gold.html
"Lee Wild, head of equity strategy at wealth platform Interactive Investor, also likes.....engineering infrastructure business Renew Holdings. All fit Millar's template of niche market leaders.
Wild adds: 'All three have been brilliant in terms of share price performance, but they also pay dividends to shareholders.'"
Bought today at 800p, like revenue rising and in turn profits, ROCE, ROE, sales and eps growth. With good divi cover I expect that to rise in the coming months too. Government spending plenty on infrastructure, just need to sort labour shortages out so things don't falter. Current liabilities are a slight concern but generating cash so not overly worried. Chart in a lovely uptrend so bought on this latest pullback, nice run into results would be most welcome.
Mentioned again on Saturday
https://www.pressreader.com/uk/the-daily-telegraph-your-money/20210911/281672553064236
RNWH are tipped in today's Telegraph as one of five "renewable" companies who'll benefit from billions of pounds to be spent in the nuclear sector:
Https://www.telegraph.co.uk/investing/funds/go-nuclear-five-renewable-investments/
Hi Rivaldo. I've been in these shares for some time, having doubled my money already. At the moment, I still feel the shares are a 'buy' based upon the rate of growth, affordable (for Aim stocks!) p/e, the good visibility to future earnings and potential for more earnings enhancing acquisitions. In my view, a takeover cannot be ruled out either because it is the sort of business that private equity look at.
Peel Hunt have raised their target price to 900p (from 750p). Numis have also raised their target to 875p (from 730p).
And there's some very positive commentary from Peel Hunt in the Yorkshire Post:
Https://www.yorkshirepost.co.uk/business/strong-demand-pushes-renews-results-ahead-of-expectations-3374351
"Analyst Andrew Nussey at Peel Hunt said: “Following the better than expected interim results, Renew has continued to deliver a strong trading performance.
“Activity levels remain high, supported by the strategic differentiation through self delivered, essential multi-disciplinary services to key infrastructure assets.
“Moreover, the operational focus and improving quality and mix of earnings has supported an increase to our margin expectations.
“We note that the integration of the two cash financed acquisitions in the period, Browne and REL (for a combined price of £32.5m), are proceeding to plan and trading in line with management’s expectations.”
The good news just keeps rolling in. Today's update bodes extremely well for the annual results and hopefully a generous increase in the dividend. Despite having enjoyed a significant re-rating in the last 12 months the shares are still good value.
Oh yes :o))
Https://uk.advfn.com/stock-market/london/renew-RNWH/share-news/Renew-Holdings-PLC-Trading-Update/85991959
Not just ahead, but "materially" ahead of current market expectations.....
Adjusted operating profit is expected to be - at moinimum - £50m versus a current consensus forecast of £45.8m.
Order books are "strong", and:
"Activity levels are supported by long-term regulatory spend and the positive outlook for UK infrastructure. Pleasingly, the integration of the Group's two acquisitions during the period, Browne and REL are proceeding to plan and trading is in line with management's expectations."
Great stuff.
In today's IC, Algy Hall has run a screen covering the entire TSE small cap index and AIM to find which companies pass all the stringent tests below to qualify as a "High Quality" share.
Only 5 companies passed. RNWH are one of them (MWE, which I also hold, are another):
Https://www.investorschronicle.co.uk/ideas/2021/08/26/5-high-quality-aim-shares/
"The full screening criteria:
PE ratio above bottom fifth and below top fifth of all stocks screened.
A genuine value (GV) ratio below the top quarter of stocks screened.
GV ratio = (enterprise value/operating profit)/(forecast EPS growth + dividend
yield)
Earnings growth forecast in each of the next two financial years.
Interest cover of five times or more.
Positive free cash flow.
Market capitalisation over £20m.
A top-quarter return on equity (RoE) in each of the past three years.
A top-quarter operating margin in each of the past three years.
Operating profit growth over the past three years"
Walter Lilly appear to have won yesterday and today a combined £147m of construction and upgrade contracts from DEFRA....
Https://bidstats.uk/tenders/?q=lilly#756678655-756547683-45
Not bad at all! They all appear to be separate from each other (happy to be corrected:
"DEFRA Network Etendering Portal
Refurbishment of B329/330 award: Walter Lilly £58.6M
B358 Cattle Handling System award: Walter Lilly £31.9M
B265 Functional Safety Alignment award: Walter Lilly £20.7M
SSB to B17 award: Walter Lilly £13.3M
MSC Phase 1 award: Walter Lilly £12.5M"
July's issue of SCSW is now out, so it should be OK to copy the Buy recommendation for RNWH from the prior issue in June FYI:
"Renew Holdings
Epic code: RNWH
(Sharewatch) Renew has reported an excellent H1 to end March (against comparatives that were pre-Covid), with sales up 17% to £366m, pretax profit up 19% to £18.1m and eps up 14% at 22.9p. Adjusted operating profit margin was 6% (down from 6.4%) mainly due to a mix change - with a higher proportion of speciality building work, which is only 2% margin.
Helped by six months from Carnell (versus three) Engineering Services grew sales 12% to £327m (+6.6% organic) with operating profit up from £20.5m to £22m. This was driven pretty much singlehandedly by a strong period in Rail.
Divisional work tends to be underpinned by frameworks but H1 saw weakness in Nuclear where all non essential work was stopped during the pandemic but this has since resumed to 85% of pre-pandemic levels. Water also saw a bit of a hiatus in work as the sector transitions from AMP6 to AMP7. But Renew is well versed to these cyclical changes.
CEO Paul Scott tells me he expects growth in the middle part of the five-year cycle to resume and is now working with nine of the 26 UK water companies. Post period end it bought J Browne, a water focussed engineering services business, which works for Thames, South Eastern and South Water. Given that Thames has such complexity, it was a region that would have been hard to enter organically. Net debt post the deal is £16m.
Trading in the first few weeks of H2 has been strong aided by the record period-end order book (£665m in engineering services) and margins look set to recover as H2 will be lapping weak covid impacted months. Peel Hunt forecasts £44.5m pretax profit/eps 45.6p. Although a ten-bagger on the first write up, the shares still look a Buy."
Shepley Engineers have an excellent quarterly newsletter, which I've only just come across. The latest one just out includes the following - there's a lot going on:
Https://www.shepleyengineers.co.uk/wp-content/uploads/2021/07/July-Newsletter.pdf
"All our teams are busy bidding and qualifying for many opportunities which can potentially become jobs over the next year, this includes:
• The OSW replacement now called Integrated Asset Care Tender is progressing and is due in mid-July
• We are awaiting feedback on a project to install the Bulk Storage Tanks for the SCP.
• We are part of many potential 18-year jobs for PPP, including HVAC, Mechanical Piping Installation, Mechanical Fabrication, Electrical Installation and Electrical Control Panels
• At West Cumberland we have bid a major fabrication package for Fuel Racks and we are just starting a bid for High Integrity Stainless Steel Containers.
• In the Restoration arena we have been successful in winning the front-end package for the Tollcross Glass House in Glasgow and we are providing some support for the restoration of the Royal Botanical Gardens in Edinburgh. Also, in Manchester we are bidding several packages on the Town Hall.
As you can see, we are busy with these tenders and if we have a reasonable level of success, we will be very busy in the future.
On the current projects there has been some excellent progress on PPP fabrications at West Cumberland with the completion of the first phase of Wall Boxes, and the commencement of the vessels for SCP. Magnox Island has progressed well at Springfields and we have mobilised on the Manchester Town Hall."
More buys at 760p and above this morning....
Seymour Civil Engineering have just won a place on a £290m framework contract as one of eleven suppliers over the next 5 years for Yorkshire Water for works across their estate.....
Https://bidstats.uk/tenders/2021/W30/755826719
Hi Guitarsolo. A P/E of say 20 can not only be for companies achieving high growth - they are also for those companies which combine solid growth with high defensive characteristics and have a proven record of continuous growth over a long period.
RNWH are (imo!) going to achieve very agreeable growth for some years to come for the reasons already outlined. And - that growth could be supercharged by acquisitions given the financial leeway now available to RNWH.
Hi Rivaldo,
I'd agree there has been a re-rate (and long overdue).
We've gone from a P/E of around x10 (@400p) to around x15 or x16 (@750p) over a period of say a year during which EPS is heading in the right direction.
The question is, are we done now? A P/E of x15 is solid for a company growing at circa 10% a year in my book. Sure RNWH holds another couple of high-value cards being low/no debt and with so much non-discretionary spending etc.
But a higher P/E (say x20) in my book is reserved for companies with very strong growth (e.g. +30% a year) which I think is optimistic for RNWH.
So, does that mean the re-rate is largely done?
Guitarsolo - not complaining! Just strumming.
Lovely finish yesterday, with a closing buy at 760.04p.
It's not surprising to me that there's a re-rating going on. RNWH are in a lovely sweet spot now, with terrific defensive qualities on the one hand, yet also deep involvement in a number of fast-growing sectors all earmarked for large government/regulated/infrastructure investment over the next 5-10 years.
Excellent company here
Buying coming in at 752p-754p now.
Looking very strong here, especially against the general market sell-off yesterday and in general. Received a nice interim divi the other day too :o))
VHE were the second largest recipient in the country of funds from the Government agency HomesEngland:
Https://www.constructionnews.co.uk/government/homes-england-contractor-spend-revealed-2-12-07-2021/
"Earthworks and remediation contractor VHE Construction was in second place – receiving £5m. It worked on jobs including adit, well and reservoir decommissioning at the listed Whitley Pumping Station in Coventry, West Midlands, and infrastructure works on a former Electrolux site in Spennymoor near Durham."