The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Grower, I agree the listing will have a positive effect but in the meanwhile the subdued trading announcement is having a negative effect.
Good morning all,
With the announcement of the 2nd listing there in my humble opinion a fair chance that the sp will exponentially go north. What is the gut feeling from other people on this bb?
KR
Growerson
Around 15 years ago Shanks and Viridor were estimated to have around the same market value and Shanks was first into the PFI market. Operating in the same sector, the current estimated difference in market value gives an indication of how poorly Renewi has been managed relative to its peers. As a long term holder I continue to hope that a decent, and sector experienced management team will start to create rather than destroy value.
Press covered PR interest in Viridor, which may or may not spark interest in our business from investors. On fundamentals the business finally looks like it is seeing some daylight after a dismal period of performance post merger. Outstanding operational/management issues are being dealt with
1. Complexity reduced via sale of peripheral businesses
2. Balance sheet being strengthened with sales proceeds used to reduce gearing
3. New management now focused on driving operational improvement - see new management hires
4. Resolution to ATM that sank the share price/profits forecasts last year
In addition:
1. Potential listing on Euronext should spur interest from non-holders
2. Circular economy exposure is a growing theme: hence businesses that have scale/expertise should attract investment $
3. Could be a takeover candidate at some point based on the above
Renewi has all the signs of success- my prediction is 40p by end January and 50p by end 2020 - that’s only asking for a 40%
appreciation over the coming year . Mark my words .
It is very rarely in the past that I have bought a share ‘ bon pere de famille ‘ - that’s to say a non speculative non glamorous share . After being invested in disreputable AIM listed shares I am happy
to see a decent board of directors and somehow feel that Renewi will ,with patience, give a comfortable performance over the coming year . All it needs is for the institutions start looking at it again after a dismal two year drop and the combination of an Amsterdam listing plus the end of ATM worries should give them reason to start investing again . But the endless question is whether I am happy to hold if the share starts to disappoint - software is so much more exciting than looking at rubbish bins being emptied .
Until recently the SP was stuck around 30p - with this great news you would imagine that this should be rerated by end March to an increase to at least 36p - poor Renewi has been so neglected - so this should awake the market back up to 40p. But will I have courage of my convictions ?
Agree, a major downside seemingly off the table.
Think this should go higher in the coming days on the rns. What takes this to 40 or 50p.
Now well in the money but holding out.
Also saw this and I think they are an activist investor who purchased their earlier holdings at a much higher price. In order to do something they probably need to get support from a number of other institutions. Over recent years there has been a lot of PE interest in the sector and whilst Renewi do not have the potential landfill liabilities of others, they do have a legacy defined benefit pension scheme and the seemingly unquantifiable ATM issue. Both of these are potential red flags to a PE House.
I noticed that a MONACO based investment fund had just increased their holding to over 4% - so perhaps this might be an activist investor to shake things up. But I am convinced that the business should be run from Europe and not just listed in London - I am sure that U.K. investors could not give a hoot for this activity whilst Benelux investors could feel differently but this might need a change in top management . I did notice that chairman Matthews back a year ago did buy £40000 worth at 40p - Did he feel a wind of change for the better ?
As one of those old (10years plus) Shanks shareholders I am pretty sick. Since turning down the Carlyle 120p per share on the basis that it undervalued the business, it has been on a continual downward trend. As I have posted before, I believe that the executive Board lack the sector experience to turn it around. Salaries have substantially increased and performance got worse. Until ATM is fully resolved then I can not see a bidder emerging meanwhile the major U.K. PFI contracts get closer to the end. I think it could recover but needs an activist investor to give it a good shake. In my view listing is in wrong country now and the money and time spent on branding as Renewi was a total waste. Everybody I speak to in the sector saw nothing wrong with the Shanks brand.
I am bewildered . When Shanks merged with the Dutch there was a projected saving of 40 million £ by now . Since the merger the share price is down from 90p to 27p. The website is basic. The company continues to make a loss .only recently have they appointed new local directors . So for old Shanks shareholders they must be sick . Of course the business had ethical attractions but that won’t make us any money for the moment - but patience may reward ?
As a new investor at Renewi I attempt to sense the future evolution of the group. The first thing I look at is the management and there seems to be a gulf between the London HQ and the Benelux local directors . Where will the future drive come from? What personal investment is held by the CEO ? I notice the CFO has been selling last month, supposedly for tax reasons . Looking at the SP chart I cannot sense where the breakthrough will come from .
Like others here I think pretty much all the bad news is in the share price ; the outstanding issue of course is ATM, and it looks like the fog is lifting there so I think the sp reflects frustration with the lack of resolution. The other issue is the debt, and having raised cash from the recent divestments it looks like Woolrych and the board are getting to grips with that too though we aren't out of the woods. Eventually value will out here; scale players in Europe are at a premium and that makes this business attractive both from an organic growth (eventually) perspective and as a takeover candidate (Carlyle liked it)
Thanks Fran and Matt. I bought in in the low 20s as just thought all the risk had been priced in and a relatively good dividend.
Please keep on posting any insights. I do think as this is an unglamorous sector it is below the radar.
Agree with you. Why they have not moved the listing to Amsterdam has been beyond me for years and the change of name was expensive and confusing, particularly as the Dutch business trades under a range of names and had never adopted the Shanks name.
As a new investor with Renewi I am happy that the board contributors are clearly investors as opposed to traders - this avoids the assenine comments on other boards where people trade insults and endless criticism of the management- ie total frustration.
With Renewi we have a non-glamorous sector - a major recent upset and little movement in the share . My main concern is how can you run a Benelux business from London - why not run it from Amsterdam. And who chose the name ‘Renewi ‘ - it sounds like an Italian pasta . I get the ‘ renew’ bit but why the Italian finish. To resume I expect this share to take on 20% over two years ,little downside , no one knows when the soil issue is cleared , a 3% dividend, low PE.
Where there is muck there is brass - I must somehow have this in mind to invest .
I think there is significant upside potential but only when the full extent of the ATM situation is clear and that probably includes being certain there is no major contamination clear up cost in the site and the adjacent canal. Also as I have said before, in my opinion it needs an executive on the Board who has long term experience (15 years +) in the sector. I would love someone in the company to explain why they thought that the £1.20 per share offer from Carlyle group under valued the business given what the Board has delivered since.
An "avoid" today in the Times. The usual very shallow and uninformed write up in the Times, Ian Cowie is probably the only one providing decent copy on sunday - the daily market write up could have been written by a 3 year old.
Avoid is based on risk, surely at this share price this is built in with a greater upside potential than downside risk ?
Management’s unchanged guidance and ongoing focus on debt reduction were the financial headlines for Renewi at the halfway point of FY20. Continued progress in the company’s largest division plus ATM appearing to be closer to resolving soil remediation issues are the two key pre-close messages, in our view. Other divisions are also performing in line with management expectations. Valuation multiples remain low in conventional terms with earnings and dividend growth expected to resume in FY21 on our estimates.
The end H120 update reiterated the AGM message regarding ongoing progress in the Commercial division sustained by firmer pricing and synergy benefits. There are likely to be general market effects from trading difficulties at AEB in the Netherlands (most obviously, reduced incinerator capacity and reduced refuse derived fuel or RDF intake) as the supply chain adjusts. Renewi’s contractual positions and other mitigating actions taken lead management to believe that there will be little impact on the company during FY20.
Encouragingly, ATM appears to be clearing soil testing hurdles to satisfy the regulator in Holland and a re-opening of the market is expected although no firm date is provided. Additionally, ATM has developed potential markets for separated/graded soil components sufficiently to invest in processing capacity in this area; once certified, these products will aid diversification in end market application and revenue generation for the company.
Apart from a new service agreement at Derby, no further detailed comments were made on UK Municipal or Monostreams, which are performing in line with board expectations. This perhaps indicates greater stability in these two divisions following portfolio adjustments and some management changes, respectively. Other corporate activities, ie green financing initiatives and business disposals, are as previously reported save for confirmation that the Canadian Municipal disposal completed and the initial C$82m/c €55m proceeds were received prior to the period end.
Renewi’s share price is broadly flat year-to-date and yet to regain the year high of 37p seen just prior to the FY19 results announcement in May. On our unchanged estimates, the company’s P/E and EV/EBITDA (adjusted for pensions cash) compress to 5.2x and 3.8x respectively by FY22 with a prospective FY20 dividend yield of 4.6%.
Just broke above resistance. If it can hold these gains then RWI should be testing 38p again.
Good update today.
My concern would be his limited sector experience other than a couple of years in the Dutch business. This seems to have been a feature of recent (last 10 years) of Executive Appointments and it has served them very badly. Renewi have under-performed most of the sector, both quoted and unquoted businesses for a long time and if you look at the executive Boards of these competitors you will usually find at least one executive Director with very lengthy experience; look at Biffa and Augean both of which are quoted. I have been a long term holder and believe it is a good underlying business that has been badly managed and I do have some concerns that a couple of their U.K. PFIs are well over halfway through the 25 year term.
As a potential investor I try to get a feeling for the senior management- can anyone guide me on the quality of the new CEO and somewhere I saw that they are looking for a new chairman - any truth in that . My main concern apart from the soil issue is what role the ex Shanks UK base can drive ahead a Benelux business . What motivation for the local managers with a static two year business outlook? What is downside if recession bites - down to 20 ?
Hopefully to an activist investor who will do something about the management of the business.