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Great results, but the SP is now down 5%. I do struggle to understand why this happens.
Terrific results given the pandemic - the £39.6m operating profit is at the top end of the expected range, and is well ahead of the (recently increased post trading statement) consensus forecast £38.8m.
The 41.2p adjusted EPS is also nicely ahead of consensus forecast 39.9p EPS.
Most importantly, the order book looks terrific at £692m, hugely up from the prior year £581m (which excluded Carnell). Great to see RNWH with net cash now too (though with deferred VAT to pay).
Lots of highlights, but some include:
- "Trading in the new financial year has started well"
- RNWH are now an important wireless/5G play:
"Delivering all aspects of wireless telecoms infrastructure, including 4G and 5G deployment, maintenance and decommissioning services, we have long-term relationships with all the main UK network operators, equipment vendors and managed service providers. In the period, we have seen a significant increase in work across all our frameworks as the 5G roll-out programme accelerates. We were awarded positions on both Telefonica's and MBNL's new three year 5G services frameworks as well as a contract to deliver Telefonica's microwave services for the next two years."
- water, nuclear, rail, highways....these are all areas with huge government-backed infrastructure spending laid out for the next 5 years under CP6, AMP7 etc
With all sectors now recovering, Carnell fully consolidated for the year and Sellafield coming back in H2, we could perhaps see 48p-50p EPS this year.
Overall prospects are terrific - and the narrative suggests continued likelihood of further acquisitions soon.
Still reading through them, but they look to be solid set of results, especially given the lockdowns. Pleased to see a final dividend and a commitment to restoring the dividend to pre covid levels.
Shore Capital say Buy, with a 600p target which is likely to be increased soon:
Https://citywire.co.uk/funds-insider/news/the-expert-view-on-the-beach-renew-and-mj-gleeson/a1434301?ref=citywire-money-latest-news-list#i=3
"‘Buy’ Renew to play UK infrastructure, says Shore Capital
Renew (RNWH) offers a way for investors to benefit from the UK government’s pledge to invest in infrastructure, says Shore Capital.
Analyst Tom Fraine retained his ‘buy’ recommendation and ‘fair value’ price of 600p on shares in the engineering company, which were trading at 542p on Thursday.
Fraine is expecting to increase his 2022 free cashflow forecast by 25% to £26.1m, which implies a 6.5% yield and ‘slightly upgrade’ to his target price.
‘We believe, despite the recent share price appreciation, Renew represents a good opportunity for investors to benefit from the UK government’s commitment to invest £640bn in infrastructure over the next five years,’ he said.
‘We believe the market overestimates the group’s risk profile, possibly due to its associations with peers that service much larger, fixed contracts than Renew’s.’"
Looking forward to Tuesday's results, which we already know will be "materially ahead of current market expectations".
I'm guessing these will even be ahead of the newly increased forecasts, which should have been set conservatively.
RNWH's prospects remain excellent in all its core sectors, which are about to enter government-backed relatively high growth periods lasting a number of years. The list of multi-billion prospects now reads as follows:
- water/flood defences
- road/highways
- rail
- electric vehicle charging
- 5G telecoms
- new nuclear energy/nuclear decommissioning
- Houses of Parliament refurbishment (£4-£6 billion costs)
I agree bingo, I have long had a target price of £6. I think how quickly we get there depends on next week's results and in particular the level of the dividend, which will be the first thing I will be looking for.
Hang on in there think we are good for at least 600
Nice buy at 547.8p just reported, and moving up again.
Thanks Rivaldo, it'll be interesting to see the level of debt at the next update. RNWH has a track record of paying it off quickly and using its balance sheet to good effect for more acquisitions. I wonder if they have their eyes on any distressed specialists?!
I would quite like to hear that the full dividend is being reinstated - I am sure it will be and perhaps even caught-up on the postponed c.6.6p payment. As a long term holder here I feel that the dividend could be more generous, but it's hard to fault RNWH really.
Guitarsolo
Very good news this morning for RNWH's cash flows and Balance Sheet - and it would seem that one more £4m payment to AMCO's scheme will increase cashflow permanently by close to £5m a year. :
Https://uk.advfn.com/stock-market/london/renew-RNWH/share-news/Renew-Holdings-PLC-Buy-in-of-Pension-Scheme-Liabil/83818869
"Sean Wyndham-Quin, Renew's CFO, commented:
"We are very pleased that the Trustee of the Lovell Scheme has completed the recent buy-in with a specialist insurer. This transaction significantly de-risks the Group's balance sheet, further reduces the Group's pension exposure risks and improves the Group's cashflow in the medium term. We are now focused on trying to fully buy-in our liabilities with the Amco Scheme to further reduce the Group's pension exposure in line with our strategy."
Hmmm, I'm sitting on a nice 20% profit on these and wondering whether to sell now and buy back after results on 8th Dec. Markets are fickle and usually stick to the adage "it is better to travel hopefully than to arrive". The market clearly expects the results to be good, but if they are only good or great as opposed to astonishingly excellent they may dip. I've played this both ways with other shares in the past and usually call it wrong!
Buying coming in at 534p and 540p now....
Yes should be a really good week or so with divi and results next tuesday
with buying coming in at 518p now.
Ditto. It may have been more a matter of national prestige (initially) - and security. Both of energy, and for weaponry knowhow.
Slightly off topic, but I NEVER understood the economic justification for nuclear energy. The price of energy generated doesn't come near to reflecting the costs of decommissioning, let alone the costs of looking after waste for 10,000 years or so. Even a brief attempt at calculating the costs and reflecting them at todays prices gives a unit energy cost many hundreds the cost of any other energy source. The whole point of capitalism is to work that out and come up with a more cost effective use of resources! Still, nice work for the likes of RNWH as long as they do it properly and don't cut any corners.
News this morning that the cost of Britain's nuclear decommissioning bill will be over £130 billion.....and might rise further.
Remember that RNWH are heavily involved as core providers at Sellafield and Magnox:
Https://www.thetimes.co.uk/edition/business/nuclear-wastes-130bn-bill-qpjqmj83n
"The report highlighted new figures from the NDA, the quango in charge of the clean-up, which estimate the remaining cost over the next 120 years has risen to £132 billion from £124 billion a year earlier.
NDA accounts show this was driven by a £5 billion increase to the estimated cost of decommissioning the ten Magnox nuclear power plant sites, which is now put at almost £20 billion, as well as a further £2.5 billion increase to the remaining costs at Sellafield, Britain’s biggest and most toxic site, which accounts for almost £97 billion of the total. MPs said that the estimates were “inherently uncertain” and might increase further."
I find RNWH to be very attractive, due to the combination of (1) low risk due to its modus operandi which spreads and minimises risk, (2) possibly imminent earnings-enhancing acquisitions, and (3) involvement in so many sectors which are about to enter government-backed relatively high growth periods lasting a number of years, including:
- water/flood defences
- road/highways
- rail
- electric vehicle charging
- 5G telecoms
Very good start today....buying coming in at 508p now.
As well as the Northern infrastructure bank and spending on road and rail, more excellent news confirmed too for RNWH on flood defences and electric car charging points:
Https://www.thesun.co.uk/news/politics/13295175/spending-review-levelling-up-fund/
"£5billion for flood defences was announced too, alongside £1.9bn for electric vehicle charging points and infrastructure."
Early highlights from the Chancellor's speech - great to see a new National Infrastructure Bank being set up in RNWH's homeland of the North, and also the focus on rail and road spending:
Https://www.insidermedia.com/news/national/spending-review-reveals-covids-economic-impact
"The Chancellor also announced a new UK infrastructure bank to be headquartered in the north.
He promised a £100bn infrastructure investment – the highest in 40 years which will focus on housing, broadband, mobile connectivity, roads and cycle lanes.
A new "levelling up fund" worth £4bn was also announced with local areas able to bid to fund projects of up to £20m which can be delivered in the current Parliament and "command local support".
Sunak said the initiative was about funding the "infrastructure of everyday life" including new bypasses, upgraded railway stations, better high streets and town centres."
Rishi Sunak's National Infrastructure Strategy for £100 billion of long-term investment will be revealed on Wednesday.
This should have lots of good news for RNWH, concentrating on flood defences (Seymour Civil), transport and potholes (Carnell), 5g/fibre broadband (Clarke Telecom), electric car charging points (Seymour, Carnell) etc.
I think you'll find results are scheduled for Dec 8th as per September update RNS. But yes fingers crossed
Great to see another significant rise in the share price today, hitting £5. As well as yesterday's announcement about green energy the final results should be due next week. In 3 of the past 4 years they have been released on the 4th Tuesday in November, except in 2017 when they were released on the 3rd Tuesday. We could get another rise in the SP if there is a resumption of dividend payments.