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Currency in GBP
Last close As at 24/03/2023
GBP6.20
▲ −8.00 (−1.27%)
Market capitalisation
GBP504m
Research: Industrials
Renewi is a leader in its chosen waste and recycling sectors and well positioned in the emerging circular economy. The shares trade at a discount to peers and our DCF valuation. A combination of sustained profitability and margins and delivery of the key project portfolio should see this discount eliminated over time.
Renewi |
Q1 trading in line, value upside remains |
Company update |
Industrial support services |
20 July 2022 |
Share price performance
Business description
Next events
Analyst
Renewi is a research client of Edison Investment Research Limited |
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Renewi is a leader in its chosen waste and recycling sectors and well positioned in the emerging circular economy. The shares trade at a discount to peers and our DCF valuation. A combination of sustained profitability and margins and delivery of the key project portfolio should see this discount eliminated over time.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
03/21 |
1,694 |
47 |
45 |
0.0 |
20.4 |
N/A |
03/22 |
1,869 |
105 |
98 |
0.0 |
9.4 |
N/A |
03/23e |
1,906 |
97 |
90 |
5.0 |
10.2 |
0.5 |
03/24e |
1,959 |
103 |
96 |
10.0 |
9.6 |
1.1 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q1 trading update: In line with guidance
Group revenue and EBIT for the first quarter were ahead of the prior year and in line with management’s expectations set out with the finals in May. Recyclate prices, a key driver for FY22 profit improvement, have remained resilient although metal prices have softened. Tight cost controls are in place to mitigate inflationary pressure. This suggests another good year in FY23, albeit the end result will be somewhat dependent on recyclate prices, while the benefits of the Innovations programme, Renewi 2.0 and ATM turnaround are still largely to come through. End markets continue to benefit from tightening legislation such as the European waste incineration carbon tax, which will drive waste streams towards Renewi’s recycling offerings. Net debt before leases at 30 June 2022 increased by €18m to €321m (pre the Paro acquisition, which is still expected to complete in August) with leverage remaining below 1.5x net debt to EBITDA.
Forecasts: FY23 re-introduced for another good year
We have re-introduced forecasts, which were on hold post the results. The delta for FY23 from FY22 is expected to come from declining recyclate prices partially offset by an assumed seven months of the Paro acquisition (completion due in August), while management actions offset inflationary pressures. We expect upside from key projects (ATM, Innovations and Renewi 2.0) to start having a meaningful impact from FY24.
Valuation: Discount to peers
Our DCF valuation comes in at 952p (8.0% WACC and 1.5% terminal growth) and our peer group valuation (average of P/E, EV/EBIT and EV/EBITDA) at 900p. This difference, at least in part, is due to the benefit of the projects (Renewi 2.0, Investments and ATM recovery) not being fully reflected in shorter timeframe metrics. Of note is also the implied valuation from recent corporate transactions that comes in at 2,013p.
Trading update and re-initiation of forecasts
Trading update
The Q1 update was in line with management expectations, with no change to the guidance set at the time of the full year results in May. Recyclate prices have remained positive, with the exception of metals where some softness is being seen. This is positive for margins, particularly in the Commercial Waste division (recyclates 16% of revenue in FY22). Tight cost controls are in place to mitigate inflationary pressures, which are inevitably being seen. While there was no comment in the statement on macro issues, these remain somewhat unclear at present, although Renewi’s performance through the pandemic highlighted the resilience of the majority of the group’s end markets.
Forecasts and assumptions
Below we discuss the key assumptions behind our updated forecasts.
Commercial Waste
Inbound revenue accounted for 79% of divisional sales in FY22. Volumes and revenues tend to follow GDP growth, albeit with less cyclicality, as highlighted in Exhibit 1, showing the Netherlands’ and Belgium’s GDP growth and Commercial Waste inbound revenue. Note that Renewi also posted exceptional growth in 2022 from outbound (recyclates).
Exhibit 1: Macro forecasts and recent performance of the Commercial division
2020 |
2021 |
2022e |
2023e |
|
Netherlands GDP growth |
-3.5 |
+5.0 |
+3.3 |
+1.6 |
Belgium GDP growth |
-5.7 |
+6.2 |
+2.0 |
+1.8 |
Mar 2021 |
Mar 2022 |
|||
Inbound revenue growth |
-2.2 |
+4.0 |
||
Outbound revenue growth |
+3.9 |
+62.7 |
||
Divisional revenue growth |
-0.8 |
+9.7 |
Source: European Commission, Renewi
For inbound, our assumption is for volume growth to be 2% in FY23 and 1% in FY24 before the benefit of the investment programme, reflecting the GDP growth forecasts for Netherlands and Belgium (source: European Commission). Price inflation is clearly likely to provide additional boost to the top line, reflecting the increase in wages, fuel, etc, being seen. For outbound revenue, management expects recyclate prices to moderate, albeit to remain above historical levels. There is limited evidence of prices declining at present: metals have softened and many, such as plastics, glass and wood, remain positive.
Margins have recovered strongly but will clearly face some challenges, particularly if recyclate prices soften. Renewi will inevitably face pressure on labour and fuel costs as well, although the group is largely hedged on fuel until the end of calendar 2022 and management comments that action is being taken as necessary, suggesting limited downside should be expected. Our assumption is that the recyclate pricing declines will start to be felt in H223 running into H124, when we have assumed a 100bps decline in the Commercial Waste operating margin by FY24.
The Paro acquisition is expected to complete in August, hence we have assumed a conservative seven months’ contribution in FY23 and a full 12 months in FY24.
Mineralz & Water
Key for the Mineralz & Water division continues to be ATM, the soil remediation business. Our prudent assumption is that FY23 will see further progress on permitting, but this will not benefit the financial performance until FY24. Hence, we are anticipating a flattish year in FY23.
Specialities
We have factored in a broadly flat underlying year for the Specialties division, we have assumed lower metal prices and caution on the public private partnerships (PPPs). There will be a benefit from the adoption of IAS37 on provisioning.
Projects
Company guidance for the P&L impact from the investments and turnaround programmes is shown in Exhibit 2. Delays in the installation of equipment for the key investment project, advanced residual waste sorting, suggests there may be some slippage in timing. Of the three listed below, the recovery in ATM is the most difficult to predict given that permitting is clearly outside management’s control. Further disposal of soil is required (700kt of the 1.3mt inventory was sold in FY22) before this can be achieved, hence our assumption is that FY23 will be similar to FY22.
Exhibit 2: P&L impact from projects (€m)
FY22 |
FY23e |
FY24e |
FY25e |
|
Renewi 2.0 |
5 |
12 |
20 |
20 |
Investments |
(2) |
2 |
9 |
19 |
ATM recovery |
5 |
20 |
Source: Renewi
Operational exceptional items
The key exceptional is expected to be the Renewi 2.0 programme costs of €8m in FY23 and FY24, the final year of the programme, against €6.6m in FY22.
Financial
Key aspects to the cash flow are the higher capex, reflecting deferred capex from FY22 in relation to the largest of the investment projects, and spend on provisions (ATM and UK municipals) and delayed tax (Netherlands) of €50m. There will also be the acquisition of Paro. This will lead to a cash outflow for the year, although core net debt/EBITDA is still expected to be below 2.0x for end FY23 (FY22: 1.4x).
Dividend
Renewi last paid a dividend in FY20, an interim dividend before the pandemic, and management has not commented on any firm plans to reinstate a pay-out. Our view is that, provided the outlook at the end of the financial year is robust, the company could pay a final dividend. Note that a 10c dividend would cost the group €8m.
Exhibit 3: Profit & loss
Year to March (€m) |
FY20 |
FY21 |
FY22 |
FY23e |
FY24e |
FY25e |
Revenue |
||||||
– Netherlands |
811.7 |
828.4 |
896.2 |
933.4 |
970.9 |
1008.9 |
– Belgium |
438.5 |
412.9 |
466.9 |
470.7 |
479.5 |
498.3 |
– intersegment |
|
(0.7) |
(2.6) |
-2.6 |
-2.7 |
-2.8 |
Commercial Waste |
1250.2 |
1240.6 |
1360.5 |
1401.5 |
1447.8 |
1504.4 |
Mineralz & Water |
151.6 |
182.8 |
193.9 |
189.2 |
192.2 |
201.8 |
Specialities |
323.2 |
300.7 |
350.1 |
354.3 |
358.9 |
374.7 |
Disposals |
78.4 |
|
|
|||
Inter-segmental sales |
(28.0) |
(30.5) |
(35.3) |
(38.9) |
(40.0) |
(41.6) |
Group turnover |
1775.4 |
1693.6 |
1869.2 |
1906.1 |
1958.9 |
2039.3 |
|
|
|
|
|
|
|
Operating margin |
|
|
|
|
|
|
– Netherlands |
6.1% |
6.5% |
10.4% |
9.6% |
9.6% |
9.8% |
– Belgium |
6.7% |
5.6% |
9.1% |
8.5% |
8.5% |
8.7% |
Commercial Waste |
6.3% |
6.2% |
10.0% |
9.2% |
9.3% |
9.5% |
Mineralz & Water |
3.7% |
0.2% |
3.0% |
3.5% |
6.0% |
7.0% |
Specialities |
-0.4% |
0.8% |
1.2% |
2.7% |
3.0% |
3.0% |
Disposals |
15.4% |
|
|
|||
Group operating margin |
4.9% |
4.3% |
7.1% |
6.8% |
7.1% |
7.3% |
|
|
|
|
|
|
|
Operating profit |
|
|
|
|
|
|
– Netherlands |
49.4 |
53.7 |
93.1 |
89.6 |
93.2 |
98.9 |
– Belgium |
29.2 |
23.1 |
42.6 |
40.0 |
40.8 |
43.3 |
Commercial Waste |
78.6 |
76.8 |
135.7 |
129.6 |
134.0 |
142.2 |
Mineralz & Water |
5.6 |
0.3 |
5.8 |
6.6 |
11.5 |
14.1 |
Specialities |
(1.3) |
2.4 |
4.1 |
9.6 |
10.8 |
11.2 |
Disposals |
12.1 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Central costs |
(7.4) |
(6.5) |
(12.0) |
(17.0) |
(17.9) |
(18.7) |
Group operating profit |
87.6 |
73.0 |
133.6 |
128.8 |
138.4 |
148.8 |
Associates (PAT) |
0.9 |
1.6 |
0.5 |
|||
|
|
|
||||
Acquired intangibles amortisation |
(6.4) |
(3.3) |
(3.4) |
(5.0) |
(5.5) |
(6.0) |
|
|
|
|
|
|
|
Exceptionals |
|
|
|
|
|
|
Profit/(loss) on disposal of fixed assets |
|
|
0.7 |
|||
Improvement plan |
|
(7.3) |
(6.6) |
(8.0) |
(8.0) |
|
Reorganisation costs |
(15.1) |
(10.4) |
(3.4) |
|||
Write downs/Provisions |
(35.1) |
(15.9) |
3.1 |
|||
Other |
(56.9) |
|
|
|||
EBIT (reported) |
(25.0) |
37.7 |
124.5 |
115.8 |
124.9 |
142.8 |
|
|
|
||||
Financing charges |
(34.4) |
(27.2) |
(28.9) |
(31.6) |
(35.0) |
(38.0) |
Exceptional financing charges |
|
0.4 |
0.1 |
|||
PBT reported |
(59.4) |
10.9 |
95.7 |
84.2 |
89.9 |
104.8 |
PBT before exceptionals |
54.1 |
47.4 |
105.2 |
97.2 |
103.4 |
110.8 |
|
|
|
||||
Tax reported |
(1.1) |
(5.4) |
(20.3) |
(21.1) |
(22.5) |
(26.2) |
Tax rate underlying |
25% |
24% |
25% |
25% |
25% |
25% |
|
|
|
||||
Reported profit after tax |
(60.5) |
5.5 |
75.4 |
63.2 |
67.4 |
78.6 |
Adjusted profit after tax |
40.8 |
35.8 |
78.8 |
72.9 |
77.5 |
83.1 |
|
|
|
||||
Minority interest |
(0.1) |
(0.1) |
(0.9) |
(1.0) |
(1.0) |
(1.0) |
|
|
|
||||
Reported profit attributable to shareholders |
(60.6) |
5.4 |
74.5 |
62.2 |
66.4 |
77.6 |
Adjusted profit attributable to shareholders |
40.7 |
35.7 |
77.9 |
71.9 |
76.5 |
82.1 |
|
|
|
||||
EPS reported (c) |
(97.1) |
7 |
93 |
78 |
83 |
97 |
EPS adjusted (c) |
51 |
45 |
98 |
90 |
96 |
103 |
Source: Renewi accounts, Edison Investment Research
Valuation
We have valued Renewi on an absolute basis, using a discounted cash flow (DCF) model, and a relative basis (to European peers and recent corporate activity in the sector). Note that we have adjusted our valuation for the provisions for site restoration and aftercare and onerous contracts. Along with the group’s stated underlying debt position, we have included the IFRS 16 lease debt but not the non-recourse PPP debt.
A summary of our valuations is shown in Exhibit 4. We note the significant premium that corporate transactions imply versus listed peer group valuations. In addition, we note that the DCF valuation is higher than the peer valuations (based on P/E, EV/EBIT and EV/EBITDA), which, in part, will be due to the benefit of the project portfolio (Renewi 2.0, Investments and ATM recovery) not being fully reflected in shorter time frame metrics.
Exhibit 4: Renewi valuation summary (p/share)
Valuation methodology |
Low |
High |
Average |
DCF |
879 |
1,025 |
952 |
Peer valuation |
864 |
936 |
900 |
Take-out valuation |
1,919 |
2,107 |
2,013 |
Source: Edison Investment Research
Discounted cash flow
Our DCF uses a 10-year forecast period followed by a constant growth model. The weighted cost of capital (WACC) calculation assumptions and output used are show in Exhibit 5.
Exhibit 5: WACC assumptions
UK risk-free rate |
2.3% |
UK risk premium |
9.3% |
Renewi beta |
1.05 |
Renewi cost of equity |
12.0% |
Renewi cost of debt |
4.0% |
Renewi tax rate |
25% |
Renewi WACC |
7.9% |
Source: Refinitiv, Edison Investment Research
Exhibit 6 illustrates our DCF valuation relative to variations in the terminal growth rate and cost of capital. The shaded area highlights where we currently see fair value. In line with our WACC calculation noted above and the general premise of waste markets growing below GDP growth (Netherlands 10-year average GDP growth 1.5%) plus price inflation, our value range is 879–1,025p a share.
Exhibit 6: DCF value per share (p)
Terminal growth rate |
||||||
1.0% |
2.0% |
3.0% |
4.0% |
5.0% |
||
Weighted cost of capital |
10.0% |
539 |
611 |
703 |
826 |
999 |
9.5% |
609 |
693 |
804 |
954 |
1,172 |
|
9.0% |
688 |
788 |
921 |
1,108 |
1,389 |
|
8.5% |
777 |
897 |
1,060 |
1,296 |
1,668 |
|
8.0% |
879 |
1,025 |
1,228 |
1,532 |
2,040 |
|
7.5% |
998 |
1,176 |
1,432 |
1,836 |
2,562 |
|
7.0% |
1,137 |
1,358 |
1,689 |
2,241 |
3,345 |
|
6.5% |
1,302 |
1,581 |
2,019 |
2,809 |
4,652 |
|
6.0% |
1,500 |
1,860 |
2,461 |
3,662 |
7,267 |
|
5.5% |
1,743 |
2,220 |
3,080 |
5,086 |
15,115 |
|
Source: Edison Investment Research
Peer valuation
The following table uses European group peers to provide a relative valuation of listed companies using PE, EV/EBIT and EV/EBITDA metrics. Note that US peers are generally more highly valued, a trend seen across the market in general.
Exhibit 7: European peer valuations
EV/EBITDA (x) |
EV/EBIT (x) |
P/E (x) |
|||||||
FY1 |
FY2 |
FY3 |
FY1 |
FY2 |
FY3 |
FY1 |
FY2 |
FY3 |
|
Befesa |
9.8 |
8.6 |
8.5 |
130.5 |
11.2 |
10.6 |
15.2 |
12.8 |
13.1 |
Biffa |
7.4 |
6.4 |
6.3 |
16.6 |
12.3 |
12.2 |
23.4 |
18.5 |
17.6 |
Groupe Pizzorno |
7.5 |
5.1 |
4.8 |
18.3 |
17.4 |
15.4 |
21.8 |
20.9 |
20.0 |
Lassila & Tikanoja |
6.0 |
5.7 |
5.5 |
14.0 |
12.1 |
11.5 |
13.5 |
11.7 |
11.0 |
Mo-BRUK |
5.3 |
5.0 |
4.1 |
5.6 |
5.2 |
4.3 |
|||
Seche |
6.0 |
5.5 |
5.1 |
13.4 |
12.2 |
10.9 |
15.3 |
13.6 |
11.8 |
Veolia Environmental |
5.5 |
5.3 |
4.8 |
122.2 |
10.7 |
9.8 |
15.5 |
12.5 |
10.4 |
Average |
6.8 |
5.9 |
5.6 |
45.8 |
11.6 |
10.7 |
17.4 |
15.0 |
14.0 |
Median |
6.0 |
5.5 |
5.1 |
16.6 |
12.1 |
10.9 |
15.4 |
13.2 |
12.4 |
Source: Refinitiv, Edison Investment Research, priced 14 July 2022
Exhibit 8 translates the peer metrics into a valuation for Renewi. Our values range from 864p on a P/E basis to 936p on a combined EV/EBITDA and EV/EBIT basis.
Exhibit 8: Renewi valuation
FY23e |
FY24e |
FY25e |
Average/valuation |
|
EV/EBITDA basis |
||||
Peer group multiple |
6.0 |
5.5 |
5.1 |
|
Renewi EBITDA (€m) |
256.0 |
266.8 |
280.5 |
|
Renewi enterprise valuation (€m) |
1,542 |
1,465 |
1,425 |
1,477 |
EV/EBIT |
||||
Peer group multiple |
16.6 |
12.1 |
10.9 |
|
Renewi normalised EBIT (€m) |
128.8 |
138.4 |
148.8 |
|
Renewi enterprise valuation (€m) |
2,140 |
1,679 |
1,627 |
1,815 |
Renewi combined valuation |
||||
Enterprise value (€m) |
1,646 |
|||
Debt (€m) |
(525) |
|||
Provisions/pensions (€m) |
(237) |
|||
Investments (€m) |
25 |
|||
Market capitalisation (€m) |
885 |
|||
Number of shares (m) |
80 |
|||
Value per share (€c) |
1,095 |
|||
Value per share (£p) |
936 |
|||
P/E |
||||
Peer group valuation (x) |
15.4 |
13.2 |
12.4 |
|
Renewi eps (€c) |
89.9 |
95.7 |
102.7 |
|
Renewi valuation per share (€c) |
1,382 |
1,261 |
1,276 |
1,306 |
Provisions per share (€c) |
(296) |
(296) |
(296) |
(296) |
Renewi valuation per share (€c) |
1086 |
965 |
980 |
1010 |
Renewi valuation per share (£p) |
928 |
825 |
838 |
864 |
Source: Edison Investment Research
Corporate transactions
The protracted Veolia/Suez deal has stolen most of the headlines in the sector over the last couple of years, yet there has been significant corporate activity elsewhere. In the following exhibit we use the valuations of these transactions to provide an indication of the potential value of Renewi. Note that the table of deals includes the potential offer for Biffa.
Exhibit 9: Corporate activity
Date |
Company |
Acquirer |
Currency |
Deal value (m) |
EV/sales (x) |
EV/ EBITDA (x) |
EV/EBIT (x) |
|
Jul-17 |
O'Brien |
Biffa |
UK industrial & commercial collections business |
£ |
35 |
1.0 |
5.3 |
6.6 |
Aug-17 |
MWR |
EMR |
Metal & wate recycling |
£ |
53 |
0.3 |
7.5 |
12.0 |
Mar-18 |
Augean AIS |
Regen Devco |
Waste management broker |
£ |
4 |
0.5 |
N/A? |
7.6 |
Aug-18 |
Weir Waste |
Biffa |
UK industrial & commercial collections business |
£ |
16 |
1.0 |
7.4 |
14.7 |
Jun-19 |
Renewi Canada |
Convent Capital |
Renewi Canadian operations |
€ |
72 |
3.9 |
15.7 |
48.0 |
Oct-19 |
Advanced Disposal |
Waste management Inc |
US domestic and industrial waste |
$ |
4,600 |
2.8 |
13.0 |
29.1 |
Mar-20 |
Viridor |
KKR |
UK waste, recycling, waste to energy |
£ |
4,200 |
4.9 |
18.6 |
29.3 |
Oct-20 |
Simply Waste |
Biffa |
UK industrial & commercial collections business |
£ |
35 |
1.1 |
6.7 |
11.3 |
Oct-20 |
SUEZ |
Veolia |
Waste & treatment |
€ |
24,200 |
1.4 |
8.8 |
19.0 |
Nov-20 |
SUEZ Sweden |
PreZero |
Plastics and hazardous waste in D, NL, POL |
€ |
357 |
1.4 |
10.5 |
N/A |
Jan-21 |
Spill Tech (S Africa) |
Seche |
Hazardous spills |
€ |
70 |
2.4 |
8.9 |
N/A |
Apr-21 |
Suez (NL,POL,D) |
PreZero |
Recovery/recycling in NL, LUX, D, POL |
€ |
1,100 |
1.0 |
11.0 |
N/A |
May-21 |
Viridor Collections |
Biffa |
UK industrial & commercial collections business |
£ |
126 |
0.9 |
7.0 |
N/A |
Sep-21 |
Augean |
Eleia |
Hazardous waste and North Sea |
£ |
396 |
5.1 |
13.7 |
19.3 |
Apr-22 |
Filta |
Franchise Brands |
Cooking oil recycling |
£ |
46 |
1.8 |
14.3 |
30.4 |
Jun-22 |
Biffa |
Energy Capital Partners |
Waste management |
£ |
1,549 |
1.5 |
11.2 |
35.0 |
Median |
1.4 |
10.5 |
19.1 |
Source: Refinitiv, Edison Investment Research
Translating these metrics to Renewi provides a theoretical take-out price.
Exhibit 10: Renewi implied valuation
Valuation metric |
EV/sales |
EV/EBITDA |
EV/EBIT |
Median take-out historical multiple (x) |
1.4 |
10.5 |
19.1 |
Renewi FY22 (sales, EBITDA, EBIT) (€m) |
1,859 |
262 |
134 |
Implied enterprise value (€m) |
2,667 |
2,746 |
2,566 |
Cash/(debt) (€m) |
(525) |
(525) |
(525) |
Provisions (€m) |
(237) |
(237) |
(237) |
Investments (€m) |
25 |
25 |
25 |
Implied market capitalisation (€m) |
1,931 |
2,009 |
1,830 |
Minorities (%) |
1% |
1% |
1% |
Price per share (c) |
2,389 |
2,487 |
2,264 |
Price per share (p) |
2,025 |
2,107 |
1,919 |
Source: Edison Investment Research
Exhibit 11: Financial summary
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
|
Year to March (€m) |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
INCOME STATEMENT |
|||||||
Revenue |
1,780.7 |
1,775.4 |
1,693.6 |
1,869.2 |
1,906.1 |
1,958.9 |
2,039.3 |
Cost of Sales |
(1,470.4) |
(1,467.5) |
(1,408.5) |
(1,512.5) |
(1,549.6) |
(1,590.7) |
(1,651.8) |
Gross Profit |
310.3 |
307.9 |
285.1 |
356.7 |
356.4 |
368.3 |
387.5 |
EBITDA |
182.1 |
199.3 |
202.2 |
261.5 |
256.0 |
266.8 |
280.5 |
Normalised operating profit |
85.5 |
87.6 |
73.0 |
133.6 |
128.8 |
138.4 |
148.8 |
Amortisation of acquired intangibles |
(6.4) |
(6.4) |
(3.3) |
(3.4) |
(5.0) |
(5.5) |
(6.0) |
Exceptionals |
(145.1) |
(107.1) |
(33.6) |
(6.2) |
(8.0) |
(8.0) |
0.0 |
Reported operating profit |
(66.0) |
(25.9) |
36.1 |
124.0 |
115.8 |
124.9 |
142.8 |
Net Interest |
(23.4) |
(34.4) |
(26.8) |
(28.8) |
(31.6) |
(35.0) |
(38.0) |
Joint ventures & associates (post tax) |
0.4 |
0.9 |
1.6 |
0.5 |
0.0 |
0.0 |
0.0 |
Profit Before Tax (norm) |
62.5 |
54.1 |
47.8 |
105.3 |
97.2 |
103.4 |
110.8 |
Profit Before Tax (reported) |
(89.0) |
(59.4) |
10.9 |
95.7 |
84.2 |
89.9 |
104.8 |
Reported tax |
12.4 |
(1.1) |
(5.4) |
(20.3) |
(21.1) |
(22.5) |
(26.2) |
Profit After Tax (norm) |
46.9 |
40.8 |
35.8 |
78.8 |
72.9 |
77.5 |
83.1 |
Profit After Tax (reported) |
(76.6) |
(60.5) |
5.5 |
75.4 |
63.2 |
67.4 |
78.6 |
Minority interests |
4.9 |
(0.1) |
(0.1) |
(0.9) |
(1.0) |
(1.0) |
(1.0) |
Discontinued operations |
(21.1) |
(16.6) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
Net income (normalised) |
51.8 |
40.7 |
35.7 |
77.9 |
71.9 |
76.5 |
82.1 |
Net income (reported) |
(92.8) |
(77.2) |
5.4 |
74.5 |
62.2 |
66.4 |
77.6 |
Average shares outstanding (m) |
79.7 |
79.5 |
79.5 |
79.7 |
80.0 |
80.0 |
80.0 |
EPS - basic normalised (c) |
59 |
51 |
45 |
98 |
90 |
96 |
103 |
EPS - diluted normalised (c) |
59 |
51 |
45 |
98 |
89 |
95 |
102 |
EPS - basic reported (c) |
(90) |
(97) |
7 |
93 |
78 |
83 |
97 |
Dividend (c) |
14.5 |
4.5 |
0.0 |
0.0 |
5.0 |
10.0 |
15.0 |
Revenue growth (%) |
1.2 |
(0.3) |
(4.6) |
10.4 |
2.0 |
2.8 |
4.1 |
Gross Margin (%) |
17.4 |
17.3 |
16.8 |
19.1 |
18.7 |
18.8 |
19.0 |
EBITDA Margin (%) |
10.2 |
11.2 |
11.9 |
14.0 |
13.4 |
13.6 |
13.8 |
Normalised Operating Margin |
4.8 |
4.9 |
4.3 |
7.1 |
6.8 |
7.1 |
7.3 |
BALANCE SHEET |
|||||||
Fixed Assets |
1,439.6 |
1,616.8 |
1,612.3 |
1,565.9 |
1,626.4 |
1,673.1 |
1,711.5 |
Intangible Assets |
629.1 |
584.0 |
594.9 |
592.8 |
585.1 |
577.4 |
569.7 |
Tangible and Right-of-use Assets |
605.6 |
817.0 |
794.5 |
767.4 |
835.6 |
890.0 |
936.1 |
Investments & other |
204.9 |
215.8 |
222.9 |
205.7 |
205.7 |
205.7 |
205.7 |
Current Assets |
533.3 |
503.3 |
355.7 |
385.9 |
386.9 |
401.6 |
438.0 |
Stocks |
26.0 |
20.7 |
20.6 |
22.5 |
22.6 |
23.0 |
24.0 |
Debtors |
278.8 |
272.4 |
247.7 |
269.3 |
273.7 |
288.1 |
323.5 |
Cash & cash equivalents |
50.4 |
194.5 |
68.8 |
63.6 |
60.0 |
60.0 |
60.0 |
Other |
178.1 |
15.7 |
18.6 |
30.5 |
30.5 |
30.5 |
30.5 |
Current Liabilities |
(758.3) |
(635.2) |
(646.7) |
(732.7) |
(686.1) |
(693.5) |
(711.2) |
Creditors |
(518.6) |
(534.3) |
(546.2) |
(528.4) |
(530.7) |
(538.1) |
(555.8) |
Tax and social security |
(17.9) |
(16.5) |
(13.8) |
(24.2) |
(24.2) |
(24.2) |
(24.2) |
Short term borrowings |
(121.5) |
(41.1) |
(47.8) |
(148.9) |
(100.0) |
(100.0) |
(100.0) |
Other |
(100.3) |
(43.3) |
(38.9) |
(31.2) |
(31.2) |
(31.2) |
(31.2) |
Long Term Liabilities |
(895.1) |
(1,249.6) |
(1,083.7) |
(880.9) |
(975.9) |
(965.1) |
(945.9) |
Long term borrowings |
(576.3) |
(903.3) |
(689.1) |
(518.7) |
(663.7) |
(697.9) |
(698.7) |
Other long term liabilities |
(318.8) |
(346.3) |
(394.6) |
(362.2) |
(312.2) |
(267.2) |
(247.2) |
Net Assets |
319.5 |
235.3 |
237.6 |
338.2 |
351.3 |
416.1 |
492.4 |
Minority interests |
(1.0) |
(1.4) |
(6.1) |
(7.0) |
(7.0) |
(7.0) |
(7.0) |
Shareholders' equity |
318.5 |
233.9 |
231.5 |
331.2 |
344.3 |
409.1 |
485.4 |
CASH FLOW |
|||||||
Op Cash Flow before WC and tax |
182.1 |
199.3 |
202.2 |
261.5 |
256.0 |
266.8 |
280.5 |
Working capital |
(17.7) |
14.2 |
71.4 |
(65.7) |
(52.2) |
(52.3) |
(38.7) |
Exceptional & other |
(77.6) |
(45.7) |
(20.1) |
(11.3) |
(11.1) |
(11.1) |
(3.1) |
Tax |
(13.2) |
(10.1) |
(14.8) |
(7.6) |
(24.3) |
(29.8) |
(30.7) |
Net operating cash flow |
73.6 |
157.7 |
238.7 |
176.9 |
168.4 |
173.6 |
207.9 |
Capex |
(99.4) |
(63.4) |
(57.6) |
(77.3) |
(138.7) |
(121.1) |
(116.1) |
Acquisitions/disposals |
24.0 |
80.4 |
(2.7) |
(3.2) |
(60.0) |
0.0 |
0.0 |
Net interest |
(27.0) |
(26.4) |
(15.9) |
(17.2) |
(20.3) |
(23.7) |
(26.7) |
Equity financing |
(3.4) |
0.0 |
(1.2) |
(1.6) |
0.0 |
0.0 |
0.0 |
Dividends |
27.4 |
8.6 |
0.0 |
0.0 |
0.0 |
(9.0) |
(12.0) |
Net Cash Flow |
(4.8) |
156.9 |
161.3 |
77.6 |
(50.6) |
19.7 |
53.1 |
Opening net debt/(cash) |
(500.0) |
(551.7) |
(456.9) |
(343.7) |
(303.1) |
(402.8) |
(437.0) |
FX |
(5.9) |
(3.8) |
(6.4) |
7.6 |
0.0 |
0.0 |
0.0 |
Other non-cash movements |
(41.0) |
(58.0) |
(41.7) |
(44.6) |
(49.1) |
(54.0) |
(54.0) |
Closing core net debt/(cash) |
(551.7) |
(456.9) |
(343.7) |
(303.1) |
(402.8) |
(437.0) |
(437.8) |
Finance Leases (FRS16) |
0.0 |
(211.7) |
(236.7) |
(221.9) |
(221.9) |
(221.9) |
(221.9) |
PPP non-recourse |
(95.4) |
(81.7) |
(87.6) |
(79.1) |
(79.1) |
(79.1) |
(79.1) |
Closing net debt/(cash) |
(647.1) |
(750.3) |
(668.0) |
(604.1) |
(703.8) |
(738.0) |
(738.8) |
Source: Renewi accounts, Edison Investment Research
|
|
Research: TMT
Centaur has posted good H122 figures, with revenues ahead by 8% on H121 and an uplift in EBITDA margin from 12% to 17%, well on the way to achieving the 23% targeted within management’s MAP23 objectives. The emphasis on driving higher-quality revenues from premium content, marketing services and training and advisory is giving the group a resilient earnings base. High subscription renewal levels indicate the utility to clients, with continued investment in content and products ensuring that these stay relevant and value-adding. The half-year balance sheet net cash was £14.2m and the valuation remains at a marked discount to peers.
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