One to Watch

Published on Friday 16 July 2010 22:59

Renew Holdings is involved in a range of specialist engineering and building activities with the focus for growth primarily in the former area of activity, which includes work in the nuclear, water, and rail and land remediation sectors.

Brewin Dolphin is broker to Renew. Interims in May were in line with our expectations and the 30 per cent increase in the order book was a particularly positive feature of the announcement given the challenging market backdrop in the building sector as public sector workloads start to fall in response to budgetary cuts. The fall of more than 30 per cent in the company's pre-tax profits for the period was not unexpected given the deterioration in market conditions last year.

Over and above the improvement in the order book, Renew is supported by a strong, cash-rich balance sheet. On fairly conservative earnings forecasts Renew's shares are trading on a prospective price earnings ratio of less than six and offer what we believe to be a secure dividend yield of 10 per cent. The market in the shares is quite tight but might well be worth a look.

l The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this stock for your portfolio.

Renew Holdings

31.5p unch

Scotsman says BUY

BROKER SNAPS

Cineworld

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Broker says SELL

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