Renew Holdings Share News (RNWH)

(ShareCast News) - Investors have been burdened with various themes ahead of the Deutsche Boerse (DB) and London Stock Exchange (LSE) merger, which may yet throw up another area ripe for growth, writes Financial Times' Lex column.It contended that indices -- in addition to the usual focuses on clearing, derivatives and cash-equity trading -- might be just such an opportunity, citing deal documents issued this week."MSCI, the nearest thing to a pure-play listed index provider, shows why," said Lex. Its shares have outperformed those of general financials and it enjoys high margins of 70%."Much of that growth is down to the rising popularity of index-tracking investment product," the column observed.It said that over the past five years, exchange-traded fund (ETF) assets under management (AUM) had more than doubled.Growth had been particularly strong across the Atlantic in the US, where AUM have risen by about 18% a year versus a more conservative 12% in Europe.Behind this growth was a key question on investors' lips -- does active management deliver on its promises? Thus, wrote Lex, index provision was good business.In fairness, DB and LSE had already arrived at this conclusion.LSE acquired the remainder of FTSE International in 2011, adding Russell Investments in 2014. DB last year snapped up the portion of Stoxx it did not already own."If the exchange merger proceeds, the combined entity will be the second largest -- in terms of EFT assets which pay for its indices -- after S&P Dow Jones, which dominates owing to its S&P500," the column said.Lex also wrote that DB and LSE believed they could add €63m euros of new revenue annually after five years by attracting more index-linked assets in Europe and Asia. It added that ETF AUM in Europe remained well below US levels."Cost savings will still underpin the broader merger economics, but index provision may be a rare instance of 'revenue synergies' adding up to some healthy outperformance."Meantime, The Telegraph's Questor column focused engineering support group Renew Holdings' growing order book, and rising revenues and profits that have handsomely repaid the faith in its long-term "Buy" tip.Renew used its engineering skills on some particularly unpleasant project work, for instance clearing the radioactive sludge from waste cooling water ponds at Sellafield.The company recently won a 10-year framework contract for nuclear decommissioning work at Sellafield.Questor contended that such long-term deals provided a steady flow of work and good revenue visibility going forward.Renew reported a 9% rise in its engineering order book to £416m at end-March, carrying the total up to £515m.It also undertook infrastructure support work for Network Rail. Revenue increased 5% to £265m, and adjusted pre-tax profit rose 9% to £10.3m in the company's first half. Interim dividend improved 18% to 2.65p a share."Renew has a track record of strong cash generation which steadily repays long-term finance used to fund expansion," concluded Questor.It added that net debt was £4.2m, down from £14m a year ago, and noted Renew's expectation that it would be in a net cash position by year's end.Questor pointed out that consensus estimates are for Renew's full-year pre-tax profit of £21m, giving 27p in earnings per share."We said the shares looked cheap two years ago," the column wrote."They have gained 23% since then and trading on 13-times forecast earnings we think there is more to come."