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This is great news. Driving through France 3 years ago I was astonished how many rural villages had car charging posts. I don't think. I've ever seen even in the uk.
RNWH's Carnell, AmcoGiffen and Clarke Telecom are all electric vehicle chargepoint installers.
So there are likely to be substantial benefits from the proposals in the UK green energy plan to be outlined later today:
Https://www.thetimes.co.uk/edition/news/boris-johnson-promises-revolution-in-homes-roads-and-industry-n6xzp6jld
"Electric vehicles
The government has brought forward the ban on the sale of new petrol and diesel cars and vans by a decade to 2030. It is one of the earliest deadlines of its kind in the world.
Hybrid cars with a combustion engine will be sold until 2035 provided they can drive a “significant” distance in zero-emission mode, probably 30 miles or more. The government has also committed itself to consulting on phasing out new diesel lorries."
"On public transport, money has been allocated for electric and hydrogen buses, with at least one town or city getting a fully electric fleet by 2025."
AmcoGiffen are busy with two new projects covered in the media in the last week. This canal infrastructure contract is worth £3.7m:
Https://www.dredgingtoday.com/2020/11/02/3-7-million-crinan-canal-works-set-for-winter/
And there's a rail platform extension project worth £5m completing in December:
Https://www.glasgowtimes.co.uk/news/18850116.5m-platform-extension-works-milngavie-station-now-complete/
Nice :o))
Nice comment from Shore Capital (strangely in a research report on Strix!).....
Https://citywire.co.uk/funds-insider/news/the-expert-view-ocado-chemring-and-strix/a1421042?ref=citywire-money-latest-news-list#i=4
"‘We see more upside for Renew (RNWH), which has also demonstrated resilience in full year 2020, and has a number of growth drivers including significant increases in government spending on infrastructure.’"
Hard to believe we're now almost back to levels prior to the "materially ahead of current market expectations" RNS. The only explanation is the miserable markets.
Hopefully the run-up to the 8th December results will see a nice revival.
Good to see a new article on Stockopedia assessing RNWH as a "high quality" stock with a good Piotroski score and a "cheap" valuation:
Https://www.stockopedia.com/articles/why-quality-and-value-might-be-key-drivers-of-the-renew-holdings-share-price-133063/
"The Renew Holdings share price has moved by 8.45% over the past three months and it’s currently trading at 482.56. But what's interesting about this share is its potential exposure to the influential profit drivers of high quality and a relatively cheap valuation....
....One of the quality metrics for Renew Holdings is that it passes 6 of the 9 financial tests in the Piotroski F-Score. The F-Score is a world-class accounting-based checklist for finding stocks with an improving financial health trend. A good F-Score suggests that the company has strong signs of quality.....
.... As a percentage, the higher the Earnings Yield, the better value the share.
A rule of thumb for a reasonable Earnings Yield might be 5%, and the Earnings Yield for Renew Holdings is currently 7.01%.
In summary, good quality and relatively cheap valuations are pointers to those stocks that are some of the most appealing to contrarian value investors. It's among these shares that genuine mis-pricing can be found. Once the market recognises that these quality firms are on sale, those prices often rebound."
VHE have been contracted to start major works at this large project designed to "transform the 740-acre site in to a new sustainable development that will comprise up to 3,890 homes, shops, restaurants, a primary school, and leisure and community facilities including parks and 310-acres of green open space":
Https://www.vhe.co.uk/blog/2020-10-01-vhe-commence-work-at-waverley-riverside
"VHE commence work at Waverley Riverside
01 October 2020
VHE have commenced work at Harworth Group plc impressive Waverley Riverside project in Rotherham. This will include the delivery of earthworks and infrastructure work providing surface water and foul drainage, a highway into the development, a headwall into a lake and gabion basket works adjacent to the river."
Since the new issue of SCSW is now out, here's some extracts from the big Buy tip which was in the last issue. SCSW are aiming for a £10 share price in the next couple of years.
Remember this was printed before the trading "materially ahead of current market expectations" update and subsequent upgrades last week:
Https://www.scsw.co.uk/article.php?id=8623
"Renew - Expecting a COVID-19 bump up
(Sharewatch) Engineering services company Renew, led now by chief executive Paul Scott, is sailing majestically through COVID-19. When I caught up with Scott back in June, Renew’s first half results had set new records for sales, pretax profit, earnings and operating margins.
These results had covered just a couple of weeks of COVID-19 but brokers suspect that the disruptive impact on forecast earnings is only 10-15% for the full year, with Renew’s Engineering Services side proving to be resilient in the face of COVID-19 because much of what it is doing is maintenance and renewal and its clients do not have the option to stop the work.
Around 80% of Renew’s activities continued even throughout the worst of the crisis. The Rail and Highways sectors account for most of the activity, and both Highways England and Network Rail have been taking advantage of the quieter roads and rail lines during the lockdown to perform essential works. Water and Telecoms (5G) are also deemed critical works and these too remained operational. Only the Nuclear bit has sites still closed.
According to Government figures, construction had the largest proportion of workforce returning from furlough leave and Renew is “shovel ready” to benefit from Boris’ infrastructure spending blitz. I also think there is the chance of a real COVID-19 bump to present forecasts and the shares could in a couple of years be making an assault on £10. Directors were buying last month."
"Buy ahead of 1 October update
One unexpected benefit coming from COVID-19 is that the public sector organisations have also been much faster than usual to pay their bills, which has meant net debt is also coming in better than expected and by the year end is expected to fall to £4m - for a net debt/EBITDA of 0.1. Meanwhile there are also further efficiencies coming through to boost margins and a small acquisition in energy transmission also looks likely before long.
Even without such deals, analysts are looking for profits to rise to £36.2m/eps 38.9p for a prospective PE of 11.1, dropping further in the following two years, if profits continue to rise to the tentatively forecast £39.9m/43.2p and 41.8m/44.9p."
...and now buying coming in at the full 480p offer price.
Excellent finish on Friday night, which hopefully bodes well for next week.
I suspect the usual year end trading statement due today was superceded by the "materially ahead of current market expectations" trading statement issued on 4th September.
RNWH would of course have had to issue this as soon as they were certain they would significantly beat expectations.
Thursday 1 October
Renew Holdings PLC Trading Statement
Finncap have issued a Flash Buy note on RNWH, headed "Resilient and reliable".
They have a 593p target price.
They state:
"Renew's trading update at the beginning of September detailed trading since H1 results had been strong and ahead of expectations. We have upgraded our FY 2020 EPS by 8% and improved our net debt assumption from £10.5m to £5.6m (excluding finance leases, the group will be in net cash). Renew's engineering activities in Rail, Infrastructure and Environmental markets have remained robust, with the majority designated as critical to the COVID-19 response.
We continue to forecast dividend repayments to recommence with a final in FY 2020 (results due 8 December) and reiterate our view that there is no change to the long-term outlook. This is supported by the Government's commitment to invest £640bn over the next five years, which is looking increasingly essential to restart and support the economy."
Nice bounce yesterday. I'm sure value will out here soon - RNWH are simply too low at these levels. Given the "ahead of expectations" update the run up to the results in November should be interesting.
I came across this flood defence contract for AmcoGiffen which will benefit September just before the year end, as part of a £32 million programme of flood defence works across Yorkshire:
Https://www.miragenews.com/sheffield-river-maintenance-works-to-reduce-flood-risk/
"Sheffield river maintenance works to reduce flood risk
The Environment Agency will be starting work in the river channel in Sheffield this month (September) to help reduce the risk of flooding in the city....
...The Environment Agency has employed contractors AmcoGiffen to carry out the work."
The refurb works at Westminster are now forecast to cost around £6 billion. A reasonable share of that would be very material for RNWH.
This news from July hasn't been posted before, but is quite significant imo. It shows that RNWH are a vital component of the huge restoration works needed at Westminster (via Water Lilly and Seymour Civil as main contractors).
It perhaps also explains why RNWH haven't sold off Walter Lilly, as the works at Parliament will be massive over the next few years.
And note that Walter Lilly have now been reappointed to carry out works on another courtyard:
Https://www.walterlilly.co.uk/houses-of-parliament-restoration-project-reaches-finals-in-constructing-excellence-secbe-awards/
Numis have apparently upgraded their forecasts to this 30th September year end (EBITA & PBT) by 7-9%.
Their target price is 590p (unchanged). 590p is reasonable for the moment, but may well be upgraded imo after the upcoming 30th September year end.
Good news for Walter Lilly with a new main contractor appointment win:
Https://www.walterlilly.co.uk/walter-lilly-appointed-as-main-contractor-for-the-refurbishment-of-the-ashley-building-at-the-honourable-society-of-the-middle-temple/
"Walter Lilly appointed as main contractor for the refurbishment of the Ashley Building at The Honourable Society of the Middle Temple
4th September 2020
Walter Lilly are delighted to be appointed as the main contractor for the refurbishment of the Ashley Building at The Honourable Society of the Middle Temple.
The refurbishment works will carried out across the basement-mezzanine, lower-basement and ground floors of the existing Ashley Building. Extensive structural alterations will create a new common room area including a new staircore, a café, and a meeting hub and WCs. Complete mechanical and electrical refurbishment will be carried out. Externally, the rear perron staircase will be remodelled and extended in size, and windows will be enlarged, along with careful stone restoration.
The works are solely to the lower three floors of the building, while the floors above will remain occupied and in use. Our site team are working closely with the stakeholders and building occupants to keeping them informed about the works, and noise, dust and vibration will be kept to a minimum to avoid disrupting their day to day operations.
We look forward to working in collaboration with Purcell (Architect), IKS Consulting (Cost and Project Manager), The Morton Partnership (Structural Engineer) and Integration (M&E) to deliver the project."
with the bid price up nicely to 470p.
Over £100,000 of buys this morning already - given the trading "materially ahead of...expectations" hopefully any seller is being cleared out fast.
RNWH's Clarke Telecom will benefit very nicely from the ongoing 5G rollout. Here's news of approval for a new phone mast in Barrow:
https://tinyurl.com/y25kybw9
Good to see the bid price starting to rise and now at 462p. Perhaps our seller is finally cleared/clearing.
The IC have just updated, and say Buy at 463p - here's the conclusion. I assume their 2021 P/E is based on old forecasts which will now be upgraded.
Hopefully today's news will finally underline to the market the difference between RNWH and the rest of the construction sector in terms of both both defensive aspects and high growth potential:
Https://www.investorschronicle.co.uk/company-news/2020/09/04/renew-bounces-upwards-on-better-than-expected-guidance/
"IC View
The unscheduled trading update sent the shares up by almost a tenth to 463p. Amid the fallout from Covid-19 and an economic downturn, the outlook for UK construction is shaky. But we continue to like the stability offered by Renew’s preference for non-discretionary infrastructure projects that are underpinned by long-term, regulated budgets. It is therefore well-positioned to benefit from the government’s £640bn infrastructure spending plans as well as any other infrastructure stimulus to kickstart the economy. With that in mind, the shares look undervalued at just 12 times forecast 2021 earnings. Buy.
Last IC View: Buy, 474p, 19 May 2020"
SCSW magazine noted that the prior forecast for the year finishing this month was £36.2m profits, or 38.9p EPS. So today's upgrade implies a 10% uplift in profits. The same assumption gives almost 43p EPS.
The prior forecast for the year starting next month was £39.9m profit, i.e 43.2p EPS - which RNWH have delivered a year early.
If forecasts for the year about to start increased by 10% that would give 47.52p EPS.
At 460p that gives a soon-to-be current year P/E of only 9.7.
Which is far too low to start with imho, without even looking at forward P/E ratios which would make RNWH even cheaper.