MIDAS SHARE TIPS UPDATE: Innovation has increased more than tenfold – and there should be more to come

The Furness Line between Barrow-in-Furness and Lancaster became impassable after Storm Bert hit the country last weekend.

Tracks were flooded and services were suspended, to the frustration of thousands of passengers. Renew Holdings was called in to clean up the mess.

Within hours a specialist team arrived, using state-of-the-art equipment to pump 450 liters of water per second from the pipe. A vacuum pump was run over the track and excavators were installed to redesign the line, even as rain continued to fall.

Problem solving is just one branch of it Refresh company. The group also works proactively across Britain to upgrade and maintain railways, roads, energy and water services. Business is going smoothly. Britain’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 older than 45 years and in urgent need of repair.

Some £45 billion has been earmarked for rail lines over the next five years, almost £90 billion of waterfront investment is expected, and billions more will be needed to redesign electricity networks as we move to wind, solar and nuclear energy.

Renew is an important supplier for all these industries. Last week, CEO Paul Scott announced a 19 percent increase in sales to £1 billion for the year to September 30. Pre-tax profits rose 11 per cent to £70m and the dividend was 5.6 per cent higher at 19p.

City analysts expect more of the same in the next three years at least. With 5,200 employees and an energetic internal training program, Renew is known for its skilled employees and efficient service. Scott is a qualified engineer himself. He started at Renew more than twenty years ago and worked his way up to the top position in 2016.

The growth has come about both organically and through acquisitions. Four deals have been completed since last fall, pushing the company into new areas such as wind turbine repair and maintenance.

Companies are quickly integrated into the group, retaining a degree of autonomy but also collaborating with other parts of the company.

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

Midas judgment: Midas first recommended Renew in 2012, when the shares were priced at just 75p. By 2020 the stock had risen to £5. Now they cost £10.79 and there should be more to come. The UK’s infrastructure is in need of an overhaul and Renew is working on some of the biggest projects in the country. Existing shareholders must retain their shares. Long-term investors might also want to take a closer look at this.

Traded on: Goal ticker: RNWH Contact: renewholdings.com