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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.
Companies: Renewi Plc
Edison
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
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 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.
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 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 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 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’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 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
Arden Partners
Companies: RWI FUM CMCL MEX
The agreed offer for Biffa will leave Renewi as the sole waste/recycling company listed on the UK market. The rating on Renewi shares is undemanding (FY23 P/E 7.2x) and a significant discount to the Biffa deal (FY23 P/E 18.1x). Add to this the reassuring trading update and the shares clearly offer two routes for capital appreciation.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Renewi Plc. We currently have 0 research reports from 10 professional analysts.
The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme
Companies: Renold plc
Cavendish
Companies: BILN ELCO NXQ CUSN ATG
FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively
Companies: Billington Holdings Plc
Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car
Companies: Plant Health Care PLC
Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k
Companies: Capital Limited
Tamesis Partners
Companies: 88E RNO TRIN KRM EXR BOOM
Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear
Companies: Severfield Plc
Companies: Iofina plc
Canaccord Genuity
Companies: PLL TLG HZM SAV KAV KP2 SVML
SP Angel
Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.
Progressive Equity Research
Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.
Companies: Invinity Energy Systems PLC
Longspur Clean Energy
Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first
Companies: ATOME PLC
discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli
Companies: discoverIE Group PLC
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