Home Money MIDAS SHARE TIPS UPDATE: The renewal has increased more than tenfold, and there should be more to come

MIDAS SHARE TIPS UPDATE: The renewal has increased more than tenfold, and there should be more to come

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Cleanup: Renew helped repair rail lines affected by Storm Bert

The Furness line between Barrow-in-Furness and Lancaster was left impassable after Storm Bert hit the country last weekend. The roads were flooded and services were suspended, to the frustration of thousands of passengers. Renew Holdings was called in to clear up the mess.

Within hours, a team of specialists was on hand, using sophisticated kit to pump 450 gallons of water per second from the line. A vacuum pump was driven down the track and excavators were deployed to redesign the line, even as the rain continued to fall.

Troubleshooting is just a branch of Renew business. The group also works proactively across Great Britain, improving and maintaining rail, road and energy and water services. Business is good. The UK’s infrastructure was once the envy of the world. Not anymore.

By early next year, 70 percent of major roads, highways and bridges will be over 45 years old and in urgent need of repair. Around £45bn has been allocated to rail lines over the next five years, almost £90bn of coastal investment is expected and billions more will be needed to redesign electricity networks as we move towards energy wind, solar and nuclear.

Renew is a key supplier to all of these industries. Last week, chief executive Paul Scott revealed a 19 per cent rise in revenue to £1bn for the year to September 30. Pre-tax profits rose 11 per cent to £70m and the dividend was brought forward 5.6 per cent to 19p.

City analysts expect more of the same for at least the next three years. With 5,200 employees and an aggressive in-house training program, Renew is known for its skilled workforce and efficient service. Scott is a qualified engineer, having started at Renew over 20 years ago and working his way up to the top position in 2016.

Cleanup: Renew helped repair rail lines affected by Storm Bert

Growth has come organically and through acquisitions, with four deals closed since last fall that have taken the company into new areas, such as wind turbine repair and maintenance.

Companies quickly integrate into the group, retaining a degree of autonomy but also collaborating with other parts of the business.

This approach has generated steady expansion over the past 15 years, with profits increasing 80 percent in the past five years alone and dividends more than doubling in that time.

Midas Verdict: Midas first recommended Renew in 2012, when the shares were just 75p. In 2020, the shares had soared to £5. They’re now £10.79 and there should be more to come. The UK’s infrastructure is in need of a revamp and Renew is working on some of the country’s biggest projects. Existing shareholders should retain their shares. Long-term investors might also pay attention.

Traded in: Aim Heart: RNWH Contact: renewalholdings.com

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