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Good to see Octopus buying more - they now own over 18% with 14.2m shares:
https://www.investegate.co.uk/renew-holdings-plc--rnwh-/rns/holding-s--in-company/202102090741294348O/
£2m contract award yesterday to AmCo for culvert inspections and engineering works, for completion befoe the end of March:
Https://bidstats.uk/tenders/2021/W05/744161554
The IC have today screened the entire market using the stringent criteria below.
Only seven AIM companies pass all nine tests (and none atall from the large caps). RNWH are one of them:
Https://pdfs.investorschronicle.co.uk/IC_AlphaScreen_Quality_010221.pdf
"AlphaScreens: the quest for quality
1 February 2021
Aim stocks lead the way in this month’s screen
The holy grail for buy-and-hold investors is to find a business that is capable of generating a high return on capital and sustaining it while reinvesting profits. This screen looks for shares that display these quality characteristics and can potentially deliver significant compounded returns over time"
"?An operating margin higher than the median average (mid-ranking) stockin each of the past three years (i.e. quality that shows some signs ofpersistence).
?A return on equity (RoE) higher than the median average (mid-ranking)stock in each of the past three years (i.e. again, quality that shows somesigns of persistence).
?RoE higher than it was two years ago (i.e. quality is improving as well aspersistent).
?Operating margin higher than it was two years ago (i.e. quality isimproving as well as persistent).
?A dividend-and-debt adjusted price/earnings growth (PEG) ratio belowthe top fifth of stocks screened (ie stocks must not be too egregiouslyexpensive for the growth on offer).
?A price/earnings (PE) ratio above the bottom 10 per cent of stocksscreened and below the top 10 per cent (i.e. not a suspiciously cheap ordangerously expensive valuation).
?Interest cover of more than five (i.e. high RoE is not overly dependent onthe use of debt).
?Forecast earnings growth for each of the next two financial years.
? Positive forecast free cash flow"
Excellent news for RNWH's Clarke Telecom:
Https://www.thetimes.co.uk/article/assault-on-mobile-not-spots-begins-skn27qm8x
"Targeting of mobile ‘not spots’ begins
Three leading mobile phone operators are to build and share hundreds of masts as the industry seeks to boost rural coverage.
O2, Three, and Vodafone said that construction of the 222 masts would begin this year and be completed by 2024 as part of an agreement with the government and Ofcom, the regulator.
A £1 billion programme to improve rural mobile coverage was agreed between operators, government and Ofcom in March last year to increase all operators’ 4G coverage to at least 90 per cent of the UK land mass and their aggregate coverage to 95 per cent by 2026.
etc"
Short and pretty sweet:
- trading nicely in line, unaffected by the lockdown
- order books continue to grow year on year
- cash flow in line too
That'll do for me (Tommy).
Great to see the share price rise to new highs yesterday. It still looks good value imho.
RNWH's Amco Giffen subsidiary yesterday won a £439,000 contract for major rail works from Highways England:
Https://bidstats.uk/tenders/2021/W03/743375014
Does anyone think we will hit £6 and stay above it?
"Flooding is affecting numerous rail routes today (21 Jan) as heavy rain continues to batter the railway network."
Terrible for those on the receiving end, but likely a nice bonus workload for RNWH in terms of both rail repairs and flood defence work:
Https://www.railtechnologymagazine.com/articles/railway-engineers-battle-against-storm-christoph
Buying coming in now at 566p-567p, and sells achieving a premium over the bid - looking encouraging.
The AGM will be 27th January, so only a week to go:
Https://www.investegate.co.uk/renew-holdings-plc--rnwh-/rns/annual-report---accounts-and-notice-of-agm/202101041137324523K/
I look forward to the statement being nicely bullish given that trading had "started well" for this year per the prelims.
Great to see buying coming in now at 558p (and earlier at 568p). Looking forward to another good year for RNWH.
Happy New Year to all here.
Additional work likely for RNWH from this weekend's flooding from both a (1) general flood defence and (2) rail repair point of view:
Https://www.bbc.co.uk/news/uk-55454045
"And train operators reported delays across southern England.
South Western Railway said heavy rain had "flooded the railway" between Bournemouth and Southampton, meaning cancellations and delays were expected all day.
South Western, Southeastern Railway and the London Overground all reported fallen trees and other debris blocking lines and causing disruption in various locations.
National Rail advised anyone travelling by train to check their journey before setting off.
In York flood defences were put in place as River Ouse water levels are expected to rise to about four metres above normal early on Monday.
etc"
Sometimes the guitar can be the support act, and at other times you get your moment of glory!
GS
If it's a Guitarsolo, shouldn't you be widdling rather than strumming?
Thanks Rivaldo, I don't know where you go trawling to find details of these contracts, but thank you! It's appreciated from a fellow shareholder.
Guitarsolo - gently strumming
I came across this rather nice £100m water network maintenance contract award shared between RNWH's Lewis Civil Engineering plus two others from September which hasn't been posted before - more nice secure income via AMP7 through to 2025:
Https://bidstats.uk/tenders/2020/W37/734462061
A couple more interesting extracts from Shore Capital's Buy note with the 700p target - I'm glad to see that RNWH are likely to stick to their knitting as regards any near-term acquisitions:
"We upgrade our DCF-based fair value by 17% to 700p(35% upside) on higher forecasts and highlight the increased scope for acquisitions of more businesses set to benefit from the UK Government's commitment to invest £640bn in infrastructure over the next five years."
"Management has notedan increased scope for M&A with some larger peers seeking to carve out assets and some small, privately-owned businesses seeking a sale following the difficulties of operating during the pandemic. Whilst still seeking to enter the energy transmission & distribution markets in the medium-term, near-term acquisitions are likely to involve businesses in markets the group currently operate in"
Excellent news - RNWH's AmCo have today won a place as a supplier (one of twelve) on a £200m Southern Building and Civils Framework from Network Rail:
Https://bidstats.uk/tenders/2020/W51/741015686
Not surprised the share price drops after directors award themselves shares, It snot like the don't pay themselves enough. They should take the same risk as shareholders
Shore Capital have increased their valuation of RNWH to 700p (from 600p) in a new note, and they conclude:
"Mispriced:
At 12x our conservative EPS forecast,Renew remains considerably undervalued, in our view, possibly due to its associations with peers that service larger, fixed contracts. Consistent with previous years, c.70% of our current year forecast is already in the order book, which comprises of a very high volume of small, low-risk, cost-plus contracts. We believe Renew’s ESG credentials (including being one of the 86 issuers that the London Stock Exchange recognises on its Green Economy Mark list) will support a share price rerating."
This new article out today reads rather well.....
Https://www.newsandstar.co.uk/news/18935305.qts-penrith-hired-seven-recruits/
"QTS in Penrith has hired seven recruits
National rail contractor, QTS Group, has recruited seven new employees at its Penrith office, bolstering its team across the UK to nearly 500.
The group has experienced huge demand for its specialist services in rail engineering, infrastructure and training throughout the pandemic.
The Penrith site has hired cover yard maintenance and plant operatives, as well as site managers and team leaders.
Since June, the firm has recruited 70 people across all its UK locations, including Nottingham, Leeds, Preston, Strathaven and Wiltshire....
.....Alan McLeish, managing director at QTS Group, said: “It has been really positive to see an increased demand nationally for our services in what could have been a challenging time. To meet this demand, we have made a significant number of hires at our UK locations which will support us across all areas of the business."
Good to see Seymour Civil working with local colleges to train skilled labour for the "digital telecoms sector".
I would suggest that this provides an ideal pathway for Seymour Civil to gain work from the likes of City Fibre as below in upgrading the UK's digital infrastructure:
Https://www.thenorthernecho.co.uk/business/18928392.teesside-skills-academy-starts-telecoms-training-programme/
"One of the major employers for these future roles is City Fibre, which has a three-year recruitment and training programme to provide up to 10,000 people with jobs upgrading the UK’s digital infrastructure to full fibre, and plans to replace Middlesbrough’s copper networks with gigabit-capable full fibre optic connectivity.
The newly formed partnership aims to train over 100 learners in the next six months with the emphasis on providing career opportunities for Tees Valley residents."
Very simple explanation - traders who bought in the run-up to what was known to be good results, have taken their profits.
RNWH will now embark on a big round of presentations around the City (via Zoom I suppose!).
Bargain time here imho.
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.