Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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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."
"At least 33 have died and many more are missing following severe flooding in western Germany..." BBC today. Plus at least 4 more in Belgium, and the Netherlands "has also been badly hit".
'nuff said.
News this morning of £2.7 billion allocated to deliver environmental improvements in the water sector. with an extra £800m being spent and the remainder being brought forward - RNWH's acquisition of J Browne could not have been better timed:
Https://www.investegate.co.uk/water-services-auth/rns/ofwat-announces-green-recovery-final-decisions/202107150700032828F/
"Ofwat, in collaboration with Defra, the Environment Agency, the Drinking Water Inspectorate, and CCW, has given the go ahead on delivering a broad range of proposals to offer a more resilient, greener and healthier future.
Five water companies - Severn Trent Water, South Staffs Water, South West Water, Thames Water, and United Utilities will invest an extra £793 million, on top of their existing five-year PR19 packages, to help the green economic recovery. These companies, along with seven others in England, are also bringing forward £1.9 billion worth of investment in additional statutory environment schemes into the 2020-25 period."
You beat me to it rivaldo. I can't find any announcements or news, just wondering if there is a reason for such a sudden jump.
Nice :o))
Buying coming in at steadily higher prices, and now at 749p....
and good to see a succession of buys just now at the full 700p offer.
Does anybody know how much cash is on the balance sheet?
Also, what %age of shares do directors hold?
Leading to a nice rise in SP this morning.
Thanks for posting this rivaldo.
RNWH have been tipped as a Buy in today's Tempus column in the Times.....
Even better considering the current investment zeitgeist, the column overall has an ESG theme and focuses on companies which have the LSE's Green Economy Mark. Currently this has only been granted to around 100 companies.....
Https://www.thetimes.co.uk/article/green-economy-has-blue-chips-too-lnh8r0ddl
"Renew Holdings
Another Green Economy Mark company is the Aim-listed Renew Holdings, which carries out maintenance of the rail network, roads, telecom towers, plumbing and pipework. Its customers include Network Rail and the Highways Agency. News of the government spending £640 billion on infrastructure over the next five years is very good news for Renew.
Renew has been savvy about buying companies that will benefit from that spending boost at decent multiples. One such purchase was its £5 million deal to buy Rail Electrification Limited, which provides services and machinery to install overhead lines to electrify the rail network. Network Rail has said it plans to spend up to £1.8 billion a year on electrification to cut carbon dioxide emissions. This deal adds to the services Renew can offer its rail customers and should help it win more contracts.
Elsewhere, it’s likely to see growth from servicing 5G infrastructure, increased spending on water, and nuclear decommissioning work.
Renew has the benefit of the long contracts offered by public sector organisations but does not carry the same risk as larger competitors such as Kier or Costain. Its contracts are much smaller and prices are generally not fixed so the risk of mispricing a contract is much lower.
It ploughed on through the pandemic as its work is considered to be of critical importance. Tom Fraine at Shore Capital says its ability to control costs and resilience has been better than most industrial companies. The shares are changing hands for 659p, about 14 times forecast for earnings this year, and look cheap considering the trends that will underpin demand.
Advice Buy
Why Revenues underpinned by regulatory spending
Impact Helping to cut carbon from rail travel"
and buying coming in at almost the full 690p offer price.
Great close last night at more new highs.
And more excellent news, this time from Seymour Civil:
Https://twitter.com/SeymourCEC/status/1398278736961753094
"Seymour CEC
@SeymourCEC
We are absolutely delighted to have been awarded a place on @nwater_care
NWG’s Lot 1 Water and Waste Water Network select list which will support Northumbrian Water Group’s capital programme for infrastructure projects until 2025."
I really like the sound of this joint campaign launch from RNWH's subsidiaries "to meet the ambitious electrification and decarbonisation targets set by government and Network Rail". Catchy name too :o))
Https://www.amcogiffen.co.uk/news/arq-an-electrifying-new-partnership
"15/06/2021
ARQ, which includes Amco-Giffen, REL (Rail Electrification Limited – the latest addition to Renew Holdings Plc) and QTS, will provide a truly integrated self-delivery model for the UK rail network. It will help to meet the ambitious electrification and decarbonisation targets set by government and Network Rail.
Decarbonisation is a huge challenge for us all over the next 30 years, as we seek to reduce carbon emissions and fossil fuel consumption. The UK government aims to remove all diesel-only trains by 2041, with a legally binding commitment to net zero by 2050. It has been recognised by the industry that, together, we must do more to be part of the solution to climate change.
In fact, to decarbonise the UK rail network completely, 13,000 single track kilometres (approximately 450km per year) will need to be electrified by 2050 to achieve net zero. However, it has been identified that from 2019-2020 only 251km was electrified.
ARQ therefore aims to play a key role in accelerating this change, leading the way in helping Network Rail to respond to the UK decarbonisation agenda within our country’s rail infrastructure.
Individually, each of the three businesses coming together to create ARQ have been enabling electrification programmes across the UK for several years. Now, combining their respective strengths within our unique family of multi-disciplinary engineering businesses will help us to collectively support essential UK infrastructure while gaining a key competitive edge.
The new partnership is led by Vinny O’Holloran, who says: “We understand that electrification is a significant contributor towards meeting Network Rail’s decarbonisation commitments, and that things have to change to drive efficiency. We want to be part of this change; to help drive it forward.”
etc"
and buying coming in at the full 680p offer price.
According to bsdjj elsewhere, Peel Hunt have increased their price target to 750p (from 700p).
Forecasts are unchanged, but they say they have more confidence in the outlook.
This reads well from VP Group's results yesterday - RNWH are involved in each and every one of these sectors and projects:
"Major infrastructure sectors, such as water, rail and transmission are primed for escalating growth in the coming year, added to which other major projects such as HS2 and Hinkley Point will continue to drive demand."