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There have been some big swings in the SP today, up to 789 at one point, though I haven't seen reason as to why that has happened. Are there any chartists on here who can assess the current pattern?
The company avoids many of the booms and busts that have floored competitors by forgoing the highly competitive (and capital-intensive) new build market, focusing instead on maintenance and renewal work for utilities, rail and highways customers.
Procurement for this sector is generally over 5 to 10 year cycles and about three-quarters of Renew's contracts are carried out through target price arrangements, which have a mechanism allowing for adjustments to cover for exceptional cost inflation. Clients also commission work through operating rather than capital budgets, which leaves the company less exposed to downturns.
As a result, Renew has a history of steady, profitable growth, using the cash it generates to buy businesses along the way. Over the past year, it has strengthened its presence in the water business in the South East through the £29.5m purchase of Browne in March and spent an initial £3m in May (with a further £2.3m dependent on future targets) buying rail electrification specialist REL.
These contributed to a cash outflow of around £23m in the 12 months to September but net debt (excluding leases) of £13.7m at the year-end is well covered by earnings – the company’s operating profit climbed a quarter to £41.1m.
Over the past five years, cash profit has grown by an average of about 15 per cent a year. This predictability has attracted fans among investors and its share price is up 60 per cent since the start of 2021.
Increased government spending on roads and rail mean the outlook for the sector is upbeat, though, and at 15 times’ broker Peel Hunt’s forecast earnings for next year Renew’s shares don’t look too expensive. Buy.
N2T, thanks for the update. I look for an RNS after 7am so hadn't seen the late one today. It does look like some in the market knew it was coming judging by the SP fall. I agree with your sentiment, the tone of the announcement is reassuring and optimistic, but my initial concern still stands, a delay like this is never good news.
Is anyone else concerned about today's share price fall immediately before the results due tomorrow?
Rivaldo many thanks for this. Is the full report available anywhere?
There had been a horrible looking head and shoulders on the chart recently, but that hasn't come to pass. The longer term uptrend seems to be continuing.with periods of some profit taking along the way, that is always going to happen considering the significant SP rise of the last 18 months. Ultimately Renew is an excellently managed company and it looks like the good times are set to continue with increased government infrastructure spending.
The SP has been on a stellar run this year, re-rating from £5 to over £8 recently. There was always going to be some profit taking along the way.
The good news just keeps rolling in. Today's update bodes extremely well for the annual results and hopefully a generous increase in the dividend. Despite having enjoyed a significant re-rating in the last 12 months the shares are still good value.
This is the conclusion:
Metal Tiger’s shares have produced a 86 per cent gain since I included them in my 2020 Bargain Shares Portfolio and have contributed to the portfolio’s 71 per cent total return in only 18 months. There is potential to make further significant gains in the event of positive news emerging from the company’s projects in the Kalahari Copper Belt. Indeed, although Arden has a base case sum-of-the-parts valuation of £63m (37.3p a share) on Metal Tiger’s portfolio, the upside range is £122m to £135m (72p to 80p a share) assuming another deposit of similar scale to the T3 Deposit is found. Strong buy
https://www.londonstockexchange.com/news-article/SLP/fourth-quarter-report-to-30-june-2021/15073844
You beat me to it rivaldo. I can't find any announcements or news, just wondering if there is a reason for such a sudden jump.
This may have something to do with today's SP rise
https://twitter.com/kromekgroup/status/1402222364184743937?s=19
I have filtered CK and o2o. That I will no longer benefit from their wisdom is a risk I am prepared to take.
Agreed. These are excellent results especially considering the lockdowns. I am particularly pleased to see the interim dividend reinstated and the confidence that shows about the future prospects.
£55 is very high, there are lots of online providers who £12 or less.
https://www.londonstockexchange.com/news-article/KMK/business-and-trading-update/14970979
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.
https://twitter.com/CriticalMetals_/status/1386904307690352645?s=19
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.