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Renew - Forecast upgrade after telecoms acquisition

May 2014

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • RNWH
  • Price:
  • 240p
Renew has acquired Clarke Telecom, an engineering services business focused on wireless telecoms infrastructure. The £17m consideration represents 7.4x operating profit so is significantly eps enhancing. Clarke focuses on wireless telecoms infrastructure delivery and offers electrical, mechanical and civil engineering services (through site acquisition, design, construction and installation for clients). It has relationships with all of the UK's cellular network operators and most of the work is under long-term frameworks. Clarke also has a 7% operating margin against the 4.7% that Renew achieves in its engineering services side. For the year to end September, Numis lifts its eps forecast by 7% to 17.9p and by 16% to 21.5p next ye ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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