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Renew Holdings - Half-year update



Renew Holdings (RNWH.L; Aim UK 50. Market capitalisation: £731m, 924p, 4.6% of JIC Portfolio. Medium Risk/High Reward = 5.0% target weight)

 

Renew Holdings plc operates as a contractor in engineering services and specialist building. The Company's segments include Engineering Services, which comprises the engineering activities, which are characterized using the Company's engineering workforce, supplemented by specialist subcontractors where appropriate, in a range of civil, mechanical and electrical engineering applications. www.renewholdings.com

 

H1 Trading update for the six months ended 31st March.

 

Conclusion: No numbers, but it reads well. Earning upgrades are unlikely to occur at this stage. The short statement reminds investors of the strength of the business with its exposure to long-term framework contracts – mostly linked to critical infrastructure. Renew currently appears on my Quality/Value screen and my Nick Sleep screen (which includes sales and cash flow growth and return on capital and equity data). Renew Has had a decent run in the last few months, and although there may be a pause for breath, I think a valuation of 14.5x free cash flow and A PE ratio of 14.6x September 2024 earnings forecasts does not fully reflect the quality of the business and its long-term prospects. I remain a Happy Holder and hope that before too long, I will post a Rising Price Review at  950p.

 

Trading update

 

The Board is pleased to confirm that trading for the first half of the year is in line with management's expectations and the Group continues to experience strong demand for its services across all key markets. The Group's order book remains underpinned by long-term framework positions and is at similar levels to that reported in January 2024 providing excellent visibility into the second half. The half-year net cash position is expected to be in-line with management's expectations and the Board remains confident of further progress in the second half of the year.

 

Directorate change

 

Having served on the Board as Executive Director (Rail) for over eight years, Andries Liebenberg has informed the Board of his intention to retire effective from 31 January 2025. Simon Ellison will join the Group's senior management team as Rail Sector Director later this month to ensure a smooth transitional period. Simon spent 25 years at Costain in senior leadership roles across Rail and Transportation. The Board would like to take this opportunity to thank Andries for the significant contribution he has made to the Group since his appointment and to wish him well in his retirement.

 

Notice of Results

 

Renew's interim results for the six months ended 31 March 2024 will be announced on Tuesday, 14 May 2024.



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