Renew Holdings Share Price (RNWH)

Ta for the comments chaps, appreciated! The research here has given me a multibagger over time, and I expect the long-term uptrend to continue for some time to come.

Clarke EV have merged with Clarke Connect - looks good to provide what's needed for the UK's digital/infrastructure upgrades:

Https://www.linkedin.com/feed/update/urn:li:activity:7340369969034981376/

"We're excited to announce that Clarke EV has fully integrated into Clarke Connect, an evolution which will power the UK's connected future.

As both entities have evolved, a natural synergy has developed that, collectively, delivers comprehensive solutions in power infrastructure, connectivity, and digital transformation. Uniting our service solutions, experience, and knowledgeable people provides an exciting proposition for our current and developing client base.

𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀

As the UK accelerates towards a digitally connected and sustainable future, the need for integrated power infrastructure and connectivity product solutions has never been greater. We provide a matrix of digital transformation solutions:

• 𝗘𝗻𝗱-𝘁𝗼-𝗘𝗻𝗱 𝗣𝗼𝘄𝗲𝗿 𝗜𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲: From DNO applications and grid analysis to system design, civils, installation, commissioning, and electric vehicle infrastructure, we provide turnkey solutions that ensure reliable and scalable power distribution.

• 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝟱𝗚 𝗡𝗲𝘁𝘄𝗼𝗿𝗸𝘀: Enabling secure, high-speed, and low-latency connectivity tailored for industries like healthcare, manufacturing, and transportation. Our private 5G solutions support real-time data transmission and operational efficiency.

• 𝗘𝗱𝗴𝗲 𝗖𝗼𝗺𝗽𝘂𝘁𝗶𝗻𝗴 𝗦𝗼��𝘂𝘁𝗶𝗼𝗻𝘀: We ensure computation is closer to data sources, reducing latency and bandwidth, which is crucial for applications requiring immediate data processing and decision-making.

• 𝗔𝗱𝘃𝗮𝗻𝗰𝗲𝗱 𝗪𝗶𝗿𝗲𝗹𝗲𝘀𝘀 𝗖𝗼𝗻𝗻𝗲𝗰𝘁𝗶𝘃𝗶𝘁𝘆: Deploying IoT sensors, AI-assisted computer vision, and other wireless technologies to enhance operational intelligence and automation."

I second your appreciation of Rivaldo's regular and informative input. I do feel guilty that I don't do as much research as I should and rely on his/her input but I genuinely feel extremely relaxed that this share will perform and continue to perform , they just seem to have their business model sorted and delivery is spot on

Just a quick note to thank Rivaldo for his updates on this forum. It may not be the busiest discussion board but Rivaldo's regular posting of information (from wherever he/she gets it!) is helpful. Thank you.

I would just echo part of the briefing note; "How did it do it? Mainly by sticking religiously to what it does best and doing it extremely well."

That sums up why I hold shares here and ignore any short-term volatility surrounding control programmes which revert to the norm at some point.

Summary: Renew is good at what it does. Very good.

"In Wireless Telecoms, Renew operates through Clarke. Here it is involved in designing, acquiring and building new infrastructure to support 5G rollout and it seems to be providing infrastructure services to virtually every single UK cellular network (Vodafone, VMO2, 3UK, EE & BT). Clarke is also working with EE and BT to support the removal of Huawei equipment from their networks on national security concerns, in line with government requirements to complete this process by 2027."

"Water just as sexy

But even though its hands might be full with all that, Renew also has a burgeoning opportunity within Water. Since the 1990s, Ofwat, the industry regulator, has been requiring water companies to conduct work on five-year frameworks for delivering, maintaining and improving water services. ​The total expenditure during the Asset Management Plan 8 (AMP8) period, spanning from 2025 to 2030, has been set at £104 billion. This represents a significant increase from the £59 billion allocated during AMP7 (2020–2025) and Renew now works with 10 of the 12 combined waste and water companies on their AMP8 Frameworks. For reference, it only had three clients at the start of AMP7. Other work within water is for the Environmental Agency, working on river and coastal defence schemes."

"Becomes an engineering services pureplay

Last October, the company sold its non-core Specialist Building business (Walter Lilley), transitioning into a pure-play engineering services firm. This evolution is expected to drive a higher valuation multiple over time. Additionally, by fully eliminating its pension liabilities - an issue from the past - free cash flows have increased to £50m and net debt is set to decrease to just £6.4m by September, positioning it for more acquisitions and continuing the story as a long-term EPS compounder."

Since SCSW's new issue is out I'll note that RNWH were a headline tip in their prior May issue.

Quite apart from Rail, Telecoms, Wind and Water as below, SCSW also highlights Renew's opportunities in Roads (via Carnell), Aviation and Nuclear.

They note in particular re Rail that "investors may not need to wait long to see results, with conditions beginning to improve as lower early spending in the CP7 cycle points to a likely acceleration in regulatory investment over the remaining four years...

...Within its Rail division (38% of group sales), the business has experienced delays and deferrals in scheduled renewal programmes. The corollary is that, as operators increasingly rely on ageing infrastructure, demand for both planned and reactive maintenance is rising — a trend analysts expect to continue."

"Renew’s rail division benefits from long-term, publicly funded investment programmes dedicated to renewing and maintaining the rail network. The most significant of these is Network Rail’s Control Period frameworks, which involve multi-billion-pound, five-year investment cycles targeting specific areas of national infrastructure.

The group is currently benefiting from CP7, which runs from 1 April 2024 to 31 March 2029, with an estimated £45.4 billion allocated to national investment. Around £37 billion of this is dedicated to renewal, maintenance and support services, directly aligning with Renew’s capabilities. Renew holds c50 individual framework agreements across CP7 and strong relationships with most of the main rail providers. The group operates on all of Network Rail’s routes and from 20 regional offices and equipment depots across the network"

Other brief extracts of note:

"Since 2010, the company has increased its operating margin more than fourfold - from 1.6% to 6.7% in FY24 - and has delivered 14 consecutive years of stable or growing margins. Over the same period, absolute operating profits have risen from £4.5m to £70.9m in FY24, with roughly half of that growth achieved organically.

How did it do it? Mainly by sticking religiously to what it does best and doing it extremely well. Renew has never followed the fashion for capital-intensive and risky “new-build” projects, like those undertaken by Costain, Kier or Morgan Sindall, and so has avoided the pitfalls of projects going wrong."

"Notably, this year also marks the first contribution from the newly acquired Wind business, which is performing well and boasts operating margins approximately twice the group average - offering a meaningful uplift to group profitability."

"Full Circle boasts an impressive 97% availability rate. What makes the business particularly attractive is its revenue model: it gets paid regardless of whether issues arise and contracts typically last seven years with a 95% renewal rate."