Currency in GBP
Last close As at 27/03/2023
GBP6.20
▲ −8.00 (−1.27%)
Market capitalisation
GBP504m
Research: Industrials
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 |
Q323 update supports full-year forecasts |
6 February 2023 |
Share price performance Business description
Analyst
Renewi is a research client of Edison Investment Research Limited |
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.
Q3 update |
Year end |
Revenue |
PBT* (€m) |
EPS* |
DPS |
P/E |
Yield |
03/21 |
1,694 |
47 |
45 |
0.0 |
15.0 |
N/A |
03/22 |
1,869 |
105 |
98 |
0.0 |
6.9 |
N/A |
03/23e |
1,899 |
97 |
87 |
0.0 |
8.9 |
N/A |
03/24e |
1,959 |
93 |
84 |
5.0 |
9.2 |
0.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Trading for Q3 was in line with management’s view for the full year. The Commercial Waste Division volumes were lower than the previous year as expected but stabilised versus earlier quarters. Recyclate prices were softer than previous year record levels, as seen from Q2, but have stabilised at above historic averages for paper and plastic, while wood remains at record levels. Cost actions and price increases have been initiated to offset inflationary pressures. Hence, performance is in line with expectations, albeit for a softer year than the record 2022 financial year. The Mineralz & Water Division performance was supported by good performance on the water side (H1 volumes were +22%), while the company reports ‘gradual’ progress on certification as the turnaround at ATM continues. In the Specialities Division, Coolrec (WEEE electricals recycling) and Maltha (glass recycling) continued to improve performance, while the UK Municipal business was stable.
The €100m investment programme is on track. Key in this is the €60m investment in advanced plastics recycling operations with the new Ghent facility entering into commissioning (due for commercial operations in 2023) and activity gaining momentum at both Puurs and Acht sites. Core net debt (excluding finance leases and non-recourse debt within public/private partnership companies) at 31 December 2022 was €372m (September 2022: €388m), assisted by working capital management.
Overall, an in-line statement with no change to management guidance as the company navigates inflationary pressures and reduced recyclate prices through cost actions and price increases. Key to the future is the investment to generate additional €60m of EBIT, which remains on track. The year-end update is due on 4 April with full-year results due on 25 May.
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Research: Healthcare
Context Therapeutics has announced that two patients enrolled in the Phase II OATH trial (ONA-XR+anastrozole in advanced endometrial cancer) have achieved partial response (tumor shrinkage) to the treatment. This translates to an overall response rate (ORR) of 22% (two of nine evaluable patients) and strengthens the previously announced positive data from the study (four-month progression free survival (PFS) rate of 77.7%). Management expects to report additional data from the study in Q223 and similar results from a wider cohort should further validate the therapeutic potential of the combination treatment, in our opinion. The beginning of 2023 has been eventful for Context and we expect heightened investor interest given anticipated data readouts from multiple ONA-XR studies (including the SMILE and ELONA trials in breast cancer) later this year.
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