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This subscriber web site indicates results ahead of expectations - anyone got access?
Https://tellimer.com/article/gb-renew-holdings---h1-21-results-ahead-of-expecta
"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
03-Jly-17 3p
06-Jly-18 3.33p
12-Jly-19 3.83p
Jly-20 0p (Covid)
15-Jly-21 4.83p
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."
Many thanks.
Liberum have raised their target to 650p today (from 560p) per a poster elsewhere. This is quite something - Liberum have been so far behind the curve here as to be not on it at all!
When they initiated coverage they completely misunderstoood RNWH's operating model, comparing it to other riskier contractors and missing/ignoring the risk-averse nature of the business model. Since then they've slowly been catching up and wiseing up, and have begun analysing RNWH as as it should be.
This is the first time their target has ever been ahead of the prevailing share price. There's still more work for them to do, but perhaps at last they and the market are finally catching on to both the potential upside and the limited downside (due to the defensive and repeating nature of the revenues), with the company beginning to be re-rated.
Bit concerned with supplies of materials and consequently rapidly rising commodity prices. Some timber products have doubled in price recently if you can even find any to buy. When they sign contract do they have any subsequent flexibility over price increases in materials?
Interactive that should read
I use Interact Investor. £7.99 per trade plus a monthly charge. Different plans available
Thanks.
In a Barclays ISA or SIPP it is £6. Hargreaves Lansdown are about £11.95 as I recall.
I have looked, couldn't see one, could you give me a couple of names?
£55 is very high, there are lots of online providers who £12 or less.
As a bit of a newbie, I have noticed some people buy just a few shares, but when I try to buy a small number I get charged £55! Clearly that it not cost effective, is there a cheaper way to buy RNWH shares?
Thank you Rivaldo for your posts, I read them all with interest, this having been the single most successful investment I have ever made. I bought at 21p after reading an article in the IC and whilst I have sold some along the way it is still my largest single holding. I consider RNWH to be the ultimate tortoise that wins the race. It has never been a high growth stock and I don't expect it to be, I am very happy with the huge progress it has made in over 20 years. When I first bought it was a housebuilder, called YJ Lovell then YJL, but it has only become the success it is today following the diversification into engineering. Yes, like Guitarsolo I would like a higher dividend and there must be some headroom there following its cut last year,but I have faith in the management who have delivered me a thirty bagger and still counting.
The interims are only 9 days away now, on 18th May. We already know that H1 was strong, and given the confidence already expressed in at least achieving consenus expectations for the year I suspect the outlook will be nicely positive.
There's still plenty to go for here imo. The market looks forward, not back, and there's only just over a third of this year left before the new one starts on 1st October.Shore Capital were forecasting 47p eps for that year back in December, before the new acquisition which should contribute £5.5m or more next year. This should increase that forecast to say around 51p EPS. Then if RNWH do mildly better than forecasts this year, that forecast could increase to say 53p EPS. At 640p RNWH would therefore be on a P/E of only 12.1.
Numis already have a 715p target price, even before any upgrades or moving towards the next financial year.
Also, the market always loves recurring revenues and values them at a premium. I just wonder if there's a re-rating going on here due to this. Perhaps investors have woken up to the fact that whilst RNWH's revenues are not "recurring", they are - for the most part - repeatable, secure and regulated, under long-term frameworks and in largely high-growth sectors. And this will continue as it's the group's stated strategy.
Great to see excellent posts from oogle, Qd22 and Guitarsolo. Qd22, it was so long ago I can't remember! I first bought around 60p-70p, and I seem to remember that it looked like a high quality business which had simply gone through a bad spell and been over-punished as it still had decent earnings from those secure, long-term contracts.
People are here Rivaldo! I still don't know where you go trawling to find the latest details of a sewerage maintenance contract, or a lamppost upgrade contact, but it is most welcome.
RNWH is a perfect long-term investment and I've had some involvement since 91p days so am a happy bunny. As we all know, operating in the non-discretionary maintenance market is reliable if not exciting. The company's acquisition history is exemplary and debt is always managed and repaid quickly. I like that.
What now? I am sure they have their eyes on a few more bolt-ons. But there are only so many that are going to work before you run the risk of it becoming unwieldly.
But run the EPS up to 45p...50p....60p etc and on a multiple of x12 for a solid, debt free company you can see where the share price should go.
I would like to know what the long term plans are for the dividend. It is currently forecast to be around 13-14pps but increasing slower that EPS should be rising. Is the extra cash to be used for acquisitions? Perhaps. A war chest? Who knows? Special dividend? No hint at that. But you ask how could RNWH garner more attention....would a stated progressive dividend policy help? They have plenty of headroom to play with.
Guitarsolo
Cheers oogleflugal, good to have some company!
The current spread is tiny at 641p-645p. In the opening few hours of the day the spread tends to be wider, and the bid price accelerates upwards almost every day at around 11.00-12.00 with the offer price remaining static. Today saw a slight break in that trend with a smaller opening spread, which is encouraging.
Don't say much because I'm not qualified. Yes, the 10 and 20 year charts are lovely.
Probably bought following your lead, Rivaldo [thanks!], in 2019, then topped up X2 last year, and am up nearly 50%. Thanks again!
FWIW I use Stockopedia, which loves it rating it 94/100, and especially high on Quality and Momentum - which seem to me to be the ones that count more than Value over the long term. RNWH is the kind of main economy stock I would listen to Stockopedia on. Institutional investment pretty stable at 53%, and it qualifies for 3 long screens, all momentum based. Broker consensus is high and rising. You will note I leave the important stuff - the figures - to others!
As an AIM stock it's possible it qualifies for IHT relief if you hold it for 2 years and pop off, and being in "highly regulated and secure sectors for many years to come", and seeming to be a nice quiet steady grower may be worth looking at. DYOR on that! It may not qualify anyway.
I would be interested to know, Rivaldo, what initially brought this company to your attention?
We're right behind you R! I agree with all your comments. I think sometimes its hard to understand the how much the acquisitive side of the business can really add to the growth, where as some of the more leveraged businesses people see as a multi billion dollar market that may or may not hit the jackpot. Spread is quite large here too at times, might put people off. A matter of choosing the moment.
yet I appear to be the only person here :o))
Imagine what might happen if investors actually latched on to this company, which still trades at a good value P/E with exciting prospects in a number of highly regulated and secure sectors for many years to come?
Evidently the growing and secure maintenance and support revenues enjoyed by RNWH in water, rail, 5G, nuclear, electric charging etc are simply not as sexy as hugely loss-making companies with massive market caps in e-sports, NFTs, biotech etc.
Nice blog post from last week from RNWH's Clarke EV about electric car charging points and installations at the workplace:
Https://clarke-ev.com/workplace-ev-charging-scheme/
Which leads you to here:
Https://clarke-ev.com/workplace-charging/
RNWH have been tipped by Andrew Hore on i.i.i as an AIM stock suitable for ISAs concentrating on inheritance tax reducing stocks:
Https://www.ii.co.uk/analysis-commentary/aim-stocks-inheritance-tax-isa-2021-ii515864
"Renew Holdings
Renew Holdings (LSE:RNWH) has focused on providing regular maintenance services for rail, water, nuclear and telecoms. This means that business has held up during the past year. The engineering services order book was worth £583 million at the end of 2020.
In the past few weeks, Renew has acquired water infrastructure company J Browne Group for £29.5 million and this is immediately earnings enhancing. The Enfield-based business provides services to water companies and developers, where it provides utility connections. In the year to March 2020, pre-tax profit was £5.5 million, but there has been a reduction in activity this year due to the change in the regulatory period for the water industry. Work will build up as the latest regulatory period progresses.
Interim figures will be published on 14 May. The full year pre-tax profit forecast for 2020-21 is £43.2 million and the prospective multiple is 14 – based on a share price of 620p. The forecast yield is 2.2%."
I note that Walter Lilly's big building project for the Medical Research Council is going smoothly, with completion expected for summer 2022 and the next phase of construction underway:
Https://www.walterlilly.co.uk/final-concrete-pour-completed-at-mrc-lms/
What a great day - surging to new highs, and buying at the full 620p offer price at the close.
But still some way to go to Numis' 715p target.