Renewi - Solid trading and better cash generation

Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,

Renewi - Softer construction market affecting profitability

Renewi is a well-placed strategic asset given its standing in the circular economy and market-leading positions in the Netherlands and Belgium. The Q3 update highlighted weaker construction and demolition markets in the Netherlands leading to reduced company guidance, although management has taken swift action to reduce costs. As these benefits come through, confidence in the company and its long-term opportunities should drive the share price once more.

Renewi - Recycling 2.0

Renewi offers one of the few ways to invest in the circular economy and recycling agenda, as highlighted by Macquarie’s recent interest. The reversal of recent strong recyclate pricing and a softer construction sector in the Netherlands has affected the recovery. Profits are still significantly ahead of pre-COVID levels with much of the recovery (eg Mineralz) and the full potential of the capex programme still to come, and to be followed by the drive to achieve management’s mid-term financial ta

LIBERUM: Renewi: The Macquarie bid undervalued Renewi on several grounds

Renewi - A circular economy champion

The drive to increase recycling from both governments and consumers provides a positive backdrop for Renewi. Management has improved the underlying performance of the group and the 2020 programmes targeting an additional €60m of EBIT by 2026 are largely on track. This provides an attractive platform, which we expect management to expand on at the upcoming capital markets event with further granularity on the next layer of strategy to add 50% to sales by FY28.

Renewi - On track – a circular track

Renewi has announced that trading in Q1 was in line with expectations. As a recycling business, the group is well placed to benefit from the European Green Deal and shift towards a circular economy, while the shares are trading on a rating more reflective of the legacy issues than the future opportunities.

Renewi - Resilient platform to accelerate growth

Increasing European legislation for recycling and recycled content provides a positive backdrop for Renewi as a waste treatment company (63.6% of waste treated was recycled in FY23). Stable FY23 results in a more challenging economic environment offer a solid platform for the management to deliver on its new target to grow sales (and profit given the margin expectations) by c 50% over the next five years.

Renewi - Trading ‘slightly ahead’ of consensus

Renewi is a leader in the circular economy with a recycling rate of more than 68% which, along with ever-tightening legislation, provides a positive long-term operating platform. The reassuring trading update therefore suggests an attractive entry point at the current valuation.

Renewi - Reducing the liabilities

Renewi is a clear leader in its chosen European waste recycling markets (the Netherlands and Belgium) and well positioned in the transition to a circular economy. Legacy issues have proved a detraction for investors and the valuation. The announcement from the European Commission (EC) provides positive closure on one of the larger potential liabilities.

Renewi - Q323 update supports full-year forecasts

Renewi is a leader in waste and recycling sectors and is well positioned in the emerging circular economy. Following the recently completed private equity acquisition and delisting of Biffa, Renewi is the only publicly listed play in the waste sector in the UK. This uniqueness combined with the growth plans and supported by the latest trading update should promote interest in the shares.

Renewi - Standing up to end-market pressures

Renewi’s rating reflects the historical volatility in margin performance and profits. If management can deliver on its full year guidance, performance from the restructured group should be far more resilient, which should start to improve the valuation.

Renewi - Strong 1HFY23 results

Renewi has reported a strong set of results for the interim period to end September with underlying EBIT and EPS up 16% and 17% YoY respectively to EUR75.2m and EURc56. Despite better than expected results, management's outlook was quite cautious and the dividend was not reinstated, in part because of rising net debt. We maintain our EBIT forecasts, but net earnings are reduced, mainly to allow for higher finance charges. Even so on a forward P/E of just 12.6x at our 1,000p Target Price, the sha

LIBERUM: Morning Comment

LIBERUM: UK Small & Mid Cap Dispatches

Supreme (SUP LN) - Record performance, EBITDA ~doubled

Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price

Morning Note – 22 April 2024

Morning Note – 25 April 2024

Supreme+ (SUP, House Stock at 125p) - Supreme, Supreme!

Vianet Group: FY24 trading update, strategic contract win

Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the

Vianet - FY24 ahead, strategic forecourt customer win

Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr

SP Angel Spec Sits: FY Trading Update (LTHM)

Headlam Group - Strategy for growth in tougher market

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-

Norcros (NXR LN) - Sale of Johnson Tiles UK streamlines the business and improves operating margin

Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

Norcros - Sale of Johnson Tiles UK agreed

Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well

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