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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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.
Yes rivaldo, the SP has touched £6 a few times this week then always fallen back. Nice to see a good breakthrough today and hopefully an extended run up to the results in May.
and 600p being paid, with the bid price moving up nicely...
AmCo and Seymour Civil have today both won several significant places within a maximum £90m Civil Engineering and Infrastructure Works framework (scroll down to the Award Details):
Https://bidstats.uk/tenders/2021/W16/749273280
AmcoGiffen news re major works on Crossrail's new Elizabeth line::
Https://www.amcogiffen.co.uk/news/key-mechanical-and-electrical-upgrades-for-crossrail:
"13/04/2021
AmcoGiffen has supported comprehensive station upgrades at two historic London stations recently.
We provided mechanical and electrical services to the team transforming Acton Main Line and West Ealing stations which is part of extensive infrastructure upgrades to provide better facilities and connected journeys for passengers in preparation for the #Elizabethline due to open in 2022.
The station upgrades include; new lifts offering step free access, new ticket halls and gateline and new customer information screens and signage providing more space and better communication for passengers.
Work around the stations has also been carried out to improve highway and pedestrian areas."
I have been following this company for some years now. Unlike Carilion etc it has not been chasing contracts at any cost but concentrating focus on the sectors it knows. The result has been a steady, managed growth with increasing barriers to competitors and a constant gap filling or spreading into allied sectors through acquisitions. I see no reason for this long term performance to halt.
Glad I'm not the only 1 R! I find it useful in some regards and learn what to take with a pinch of salt and ignore. Thanks for your posts on DKL too. Was meaning to get in much earlier but at least took a surprising chance to get in under the 5p placing price when it emerged recently. Posted the Directors Talk link yesterday with Lincoln Moore . Their website is amazing too. This looks a really sophisticated well organised and well tooled organisation.
Given RNWH's strength in a number of high growth sectors which are guaranteed to thrive for years to come under multi-year, regulated frameworks...
Plus the potential for further earnings-enhancing acquisitions, even after the water services business acquired for almost £30m cash only three weeks ago...
I'm happy to be holding here for short and long-term upside.
Oogleflugal, I've seen so much incorrect analysis of a number iof companies on Stockopedia....there's a complete lack of understanding of what makes RNWH different to those companies in its sector who are cyclically vulnerable and open to problems on one-off large contracts. Whereas RNWH benefit from many, many smaller contracts in the provision of obligatory maintenance and upkeep in Government-regulated, growth sectors like water, transport, 5G, nuclear etc and also in newer sectors like electric charging points.
Two writers on Stockopedia passed this over recently. Although they were quite keen they didn't like its low assets, they seemed a bit suspicious. I understand companies like Carillion gave construction companies a bad name but this is nothing like Carrilion IMO. This is a quality company with quality partners. I must say Stockopedia is good as an encyclopaedia of stocks, I'm not sure I'm entirely convinced by some of their assessments and gradings. I suppose its good to get a variety of opinions. Roll on £7!
Carnell win a £1.6m road lighting/electrical contract from Highways England today:
Https://bidstats.uk/tenders/2021/W15/748749030
Amco are one of six suppliers to win places on a £36.5m framework from Network Rail:
Https://bidstats.uk/tenders/2021/W14/748421615
And Carnell have just won a £1m drainage contract from Highways England through to April'22:
Https://bidstats.uk/tenders/2021/W14/748356009
Paul Scott also commented on Stockopedia on the new acquisition, concluding as follows:
"I’ve had a rummage through the accounts filed at Companies House for J Browne (co. no. 06599855), and it looks excellent. A decent, profitable, cash generative business, making good margins. Looks an excellent fit for RNWH, and it looks a favourable purchase price too. A thumbs up from me, this looks a good acquisition, as far as I can tell."
I like the way RNWH does acquisitions. Always affordable and paid for with cash/short-term debt. And they look to pay that debt off quickly and get the balance sheet ready for the next bolt-on. Always a good specialist in a complimentary field, good reputations.
If it it accretive to c.£5.5m that's about 7pps annually. We'll have to see how much debt was taken on for the acquisition to estimate how long it will take to pay off.
Guitarsolo - a happy holder
per a poster elsewhere (from 660p).
O good the market quite likes it! J Browne is a 50 year old established family run business. Just been looking at their website. Its a lot more than just water leak repairs. looks like RNWH have done it again. Another really good solid addition to the portfolio