gretel
02 Jun 2017
Good write-up on GCI yesterday, this extract in particular:[link] worriesRelatively new CEO Paul Scott told GCI he has no stand-out issues to worry about at the moment and our conversation underscored the impression of a company performing well. Net debt was £3.5 million at the half year but this is expected to move to a net cash position by the year end. The active M&A pipeline is said to be ongoing."
gretel
26 May 2017
Tipped in Daily Telegraph RNWH have been tipped today by Questor in the Telegraph as a "small cap share for surefire income" - the tip doesn't even mention Finncap's 586p target:[link] Renew Holdings, which we bought on November 25 at 396p, posted half-year results on Tuesday and is living up to those hopes. It is among the more speculative constituents of this portfolio.This specialist engineering business has successfully captured a number of niche sectors. Skill requirements are high, which is a helpful barrier to competition; contracts tend to be long, giving reassuring sight of future revenues, and customers are generally exceptionally large businesses or government agencies. That adds up to a compelling picture.The core areas Renew serves tend not to rest on discretionary spending, either. One is transport infrastructure, with Network Rail a major client and projects involving both maintenance and new installations. Another is the provision of environmental services in the fields of clean and waste-water distribution, flood risk controls and nuclear waste management.Whatever happens in the economy, there is limited room for this spending to be cut or deferred. In fact, looking ahead, Renew should benefit from substantial projects in all these areas.For these business segments, Renew's revenues for the half year are up 6pc, profit is up 14pc and the margin has improved 9pc. The order book is up 5pc.All of that is driving the dividend, with the interim payout up 13pc to 3p.Renew has a further division where the outlook is less rosy. This is a specialist building operation which enlarges or maintains luxury homes and period buildings in and around the capital. Revenues here account for about 18pc of total but the margin is lower and the order book down.The gamble here is that the factors outlined above play out and that cash is returned to shareholders. Numis has set a target price of 500p. We remain very positive."
gretel
25 May 2017
New client - London Underground New interview with the FD, mostly about their Yorkshire operations, but a nice snippet about the Giffen acquisition:[link] has also benefitted from its recent takeover of Giffen, which specialises in delivering mechanical, electrical and power services for Network Rail and London Underground. Giffem was acquired from private equity firm Rcapital in a £7m deal.Giffen Holdings, which is based in St Albans, specialises in mechanical, electrical and power services within the railway environment employing 123 staff.Samuels added: "We didn't have London Underground as a customer before and now we can offer services from the rest of our rail activity that we've worked on such as civil engineering and particularly tunnel work to London Underground."The other way to build the business is to grow it by expanding the service offering that we offer to Network Rail, we have a few projects where we have tendered jointly with Amco and Giffen together for projects that neither Amco nor Giffen would have been able to apply for before.""
gretel
24 May 2017
New Buy tip in the IC [link] drives performance through engineering servicesTIP UPDATERenew Holdings PLC (RNWH)Renew (RNWH) has posted a record set of results for the half year to the end of March, with adjusted operating profit jumping 15 per cent on the same period last year and adjusted EPS up 16 per cent. These improvements were largely driven by the performance of the engineering services business, which accounts for 80 per cent of group revenue. Revenue here was up 6 per cent to £234m, while the order book increased 5 per cent to £435m. The division also expanded margins by 40 basis points to 5.1 per cent. One notable contributor to the division's performance was the environmental business, which saw benefits from the ramping up of the AMP6 regulatory period.The group has taken a non-cash impairment charge of £5.8m following disappointing performance from the gas business. At the end of April 2017 it decided to withdraw from loss-making low pressure, small diameter pipe replacement activities to focus on medium pressure, which it says are "lower revenue but...consistently profitable".Chief executive Paul Scott said the group would remain acquisitive, but had "fine tuned the search criteria" as a result. The recent acquisition of engineering company Giffen has resulted in a net debt position, but the group is expecting to be cash positive by the end of the financial year.Analysts at WH Ireland are forecasting profit before tax of £24.9m, giving EPS of 31.7p for the September year-end (from £22.3m and 27.2 in 2016).IC VIEW:Renew continues to impress with strengthening underlying metrics. Trading at a little under 15 times forecast earnings, it is a touch cheaper than it was when we tipped it. These results compel us to reiterate our earlier recommendation. Buy.Last IC view: Buy, 440p, 23 Feb 2017
II Editor
23 May 2017
NEW ARTICLE: Does Renew Holdings deserve premium rating? "In the dark days of summer 2009, as the market began its fledgling recovery from the financial crisis, there were bargains to be had. Turns out LSE:RNWH:Renew Holdings was one of them. In the past eight years its share price has surged by 2,030%, ..."[link]
gretel
23 May 2017
Re: Excellent interims today Finncap have reiterated their Buy and 586p target, saying as follows:"Renew has reported a strong set of H1 results with sales up +9%, operatingprofit up 15% and EPS up 16%. Operating margins have improved from4.0% to 4.2% and the group is on target for 4.5% for the year. Expectedrevenue for H2 is fully secured and a move into net cash is anticipated bythe end of the financial year. We make no changes to our forecasts andreiterate our view that Renew’s strong track record of delivering essentialservices on large, long-term frameworks can command a higher rating."And importantly imo:"The group focuses on directly delivering essential works to critical infrastructure which are mainly funded through clients’ operational expenditure budgets."
gretel
23 May 2017
Excellent interims today A very good set of results, and a confident outlook statement.With expected revenues for H2 in the bag, order books nice and solid, and prospects good in nuclear, rail, water, telecoms etc there's every reason to feel optimistic looking forward.With net cash expected in H2 we can likely expect an earnings-enhancing acquisition or two as well.The gas write-off isn't a surprise given its prior travails, and will mean the remaining business will be profitable.With 15.5p EPS in H1 being almost exactly half the consensus for the year there's a reasonable chance that those forecasts will be beaten.
gretel
11 May 2017
More institutional investment The Polar Capital UK Value Opportunities Fund was set up in January by two "star" fund managers from Miton, and RNWH has been one of their first investments:[link] pointed to infrastructure, which ‘has got more certain post EU referendum’. Although chancellor Philip Hammond has not promised to spend any more money, there was still plenty of government spending earmarked for the sector.To take advantage of this spending the fund is invested in stocks such as Hill & Smith (HILS), which manufactures crash barriers, and Renew Holdings (RNWH) which maintains train lines and operates in ‘critical infrastructure’."
gretel
02 May 2017
RNWH subsidiary wins flood award This flood prevention scheme from Seymour Civil Engineers in the North East has been named the winner of the medium-sized project category by the Institute of Civil Engineers - which can only enhance their reputation in this growing sector:[link] the Lower Thames Crossing tunnel announced recently is probably as new build not the type of work in itself for which RNWH will win big, though there's still the possibility of sizeable land remediation or other works.As an aside, since RNWH's activities are almost entirely those of maintenance and repair I'm happy that the core of the business will continue to be very profitable and secure over time, with obvious occasional ups and downs in the meantime. However, there are huge new opportunities in a number of sectors which I believe offer substantial growth opportunities for RNWH, including for example:- digital signalling (i.e via the recent purchase of Giffen) - nuclear decommissioning and new build- flood prevention- HS2- telecommunications infrastructure (via Clarke Telecom)- the 30 year gas mains replacement programme (via Forefront Group)
gretel
12 Apr 2017
RNWH to benefit from huge new tunnel? Great news today - a new Lower Thames Crossing, with a two-mile tunnel beneath the river Thames to the M25, has been announced by the Government.Given AMCO's expertise in tunnelling it's surely a given that they'll be heavily involved - and this is a huge £4.3-£5.9 billion undertaking.Here's AMCO's web site:[link] here's the story:[link]
gretel
07 Apr 2017
Finncap : positive update FYI this was Finncap's update after Monday's trading update:"High ROCE and strong cash flowBUYRenew has confirmed that trading for the first half of the year is in line with Board expectations and ahead of last year. We make no changes to our forecasts and reiterate our view that Renew has attractive and relatively low-risk growth prospects. The vast majority of Renew's work is on large, long-term, non-discretionary frameworks providing repair and maintenance services that are fundamental to the UK's energy, gas, water, telecoms and rail infrastructure. With ROCE significantly ahead of the peer group, a strong balance sheet (a net cash position is expected at September 2017) and the prospect of reinvesting cash flow into enhancing acquisitions, we reiterate our Buy rating and 586p target.Essential services efficiently delivered. In our note on 25 January 2017 we highlighted that Renew provides essential services into infrastructure frameworks, has high barriers to entry, strong cash flow and rising margins."
gretel
05 Apr 2017
New road work for RNWH RNWH's Seymour Civil Engineering have won work on a "major" new development in Yorkshire:[link] 3rd April 2017 Work on a major new development in north Northallerton – including a link road and bridge between Darlington and Stokesley roads – gets underway this week.Construction teams from Persimmon Homes and Taylor Wimpey have moved on to the site to begin preparing the land for work to begin on the initial 300 homes and the road.It means a plan to create around 1000 new homes, a school, retail space, sport and recreational areas and sites for businesses – and the new road – will finally come to fruition.........The new homes will be constructed by Persimmon and Taylor Wimpey with the first phase of road construction overseen by Seymour Civil Engineering."
gretel
04 Apr 2017
Re: Finncap reiterate Buy and 586p target Analyst comment FYI:[link] appointment was announced alongside a positive trading update and the group said trading is ahead of the same time last year. A​nalyst Guy Hewitt at FinnCap said: ​“Renew has confirmed that trading for the first half of the year is in line with ​b​oard expectations and ahead of last year. ​“​We reiterate our view that Renew has attractive and relatively low-risk growth prospects. “The vast majority of Renew’s work is on large, long-term, non-discretionary frameworks providing repair and maintenance services that are fundamental to the UK’s energy, gas, water, telecoms and rail infrastructure. “​W​e reiterate our Buy rating and 586p target.​“ Renew said that as previously indicated, it anticipates reporting a modest net debt position when it announces interim results on May 23 as a result of the acquisition of Giffen Holdings last October. The board expects to report a net cash position by this September.​"
gretel
03 Apr 2017
Finncap reiterate Buy and 586p target today.
gretel
03 Apr 2017
Good trading update today Succinct and to the point as usual, with trading ahead of last year and net cash on the way despite the acquisition of Giffen.Plus an impressive sounding new non-exec appointment:[link] (AIM: RNWH), the Engineering Services Group supporting UK infrastructure, announces the appointment of David Brown as a Non-Executive Director, with immediate effect.David Brown is currently Group Chief Executive of The Go-Ahead Group Plc, a position he has held since 2011. Prior to that, Mr Brown was Managing Director of Surface Transport for Transport for London and Chief Executive of Go-Ahead's London Bus business.Renew's Chairman, Roy Harrison OBE said: "I very much welcome David to our board. He will bring a wealth of additional knowledge and experience, particularly in the transport sector in which we have substantial operational involvement."
