Welcome to my stock journal. I hope to improve as an investor by publishing research notes here. Today, I’m taking a closer look at Renew Holdings.
Renew Holdings (LON:RNWH) provides engineering services for maintaining critical UK infrastructure via independently branded subsidiaries. Its history dates back over 200 years and was founded by surveyor Young James Lovell in 1786. It has been publicly listed since 1968, has roughly 4,000 employees and targets four main markets:
- Rail, which is benefitting from £53 billion in spending by Network Rail in “control period 6” which runs from 2019 to 2024. Renew estimates that it will cost between £18 billion and £26 billion by 2040 to decarbonise the national rail network underpinning a favourable long-term outlook for the sector.
- Infrastructure includes highways and wireless communications. £24 billion of investment is planned under “Road Investment Strategy 2” while £30 billion is earmarked to enable gigabit speed broadband networks plus £5 billion of investment in 5G networks. Further opportunities exist in the aviation sector.
- Energy including nuclear decommissioning, thermal power and distribution networks. The division should benefit from £3 billion of planned nuclear decommissioning spend per annum and the transition to net zero carbon. Clients include Sellafield, Westinghouse, BAE Systems, SSE, E.ON, Magnox, Low Level Waste Repository and Scottish Power.
- Environmental including water and land restoration. “Asset Management Period 7” in the UK water industry is estimated to cost around £51 billion providing an attractive funding backdrop. A further £5.2 billion of government investment is destined for flood defence over a six year period. The group is engaged across 11 UK water regions and was engaged in restoration work at the Houses of Parliament.
Subsidiaries include:
- Amco Giffen was acquired in 2011 and services the rail sector holding key framework agreements with Network Rail. Giffen was acquired in 2016 and offers mechanical, electrical and power services to the rail sector.
- Lewis constructs and maintains assets within the water industry. Acquired in 2013.
- Browne is a water focused engineering services business with clients including Thames Water, Southern Water, Affinity Water and South East Water.
- Clarke Telecom was acquired in 2014, is based in Manchester and specialises in wireless telecom networks.
- VHE carries out land remediation in civil engineering markets including highways and the National Grid.
- Walter Lilly provides specialist building focused on science projects and high end residential and is skilled in extending properties underground.
- Seymour services the water industry and was acquired…
