Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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October 27, 2023

RNWH, VANL, SFE | Fortnight ahead

Company news

Renew Holdings (RNWH, 692p, £548m mkt cap)

Engineering services group supporting UK infrastructure. Acquisition. TIS Cumbria acquired for a total cash consideration of £4.7m. TIS is a leading nuclear manufacturing and fabrication specialist, based in Cumbria and enhances Renew’s nuclear services offering by immediately doubling manufacturing capacity. “This acquisition will allow Renew to take advantage of increasing demand across the decommissioning and new nuclear build programmes. The added manufacturing capacity will allow Renew to better support its existing clients, as well as strengthening its broader market position. TIS represents an excellent strategic fit with our existing multidisciplinary nuclear capability, which offers attractive long term structural growth opportunities underpinned by highly visible committed regulatory spend in a sector that we know extremely well”.

Van Elle Holdings (VANL, 40p, £42m)

Specialist ground engineering contractor. Acquisition, contract. Rock and Alluvium, a leading UK based piling specialist, acquired for a total consideration of up to £3.8m on a cash-free, debt-free basis, subject to completion accounts. Based in Leatherhead, Rock and Alluvium was established in 1963, joined Galliford Try Holdings (GFRD) in 1989, and has built a strong position primarily serving the residential and commercial sectors in London and the South East. The business operates a fleet of 11 piling rigs which complements Van Elle’s existing capital investment programme. The cash consideration comprises an initial payment of £1.8m, and a deferred consideration payment of £2.0m, payable 12 months from completion. “Van Elle’s balance sheet remains strong and is expected to be in a net cash position post transaction, providing the group with headroom to support further organic and inorganic investment opportunities”. For the year ended 30 June 2023, Rock and Alluvium generated revenues of £15.5m and a draft operating loss of £0.2m. The assets subject to the acquisition had a net asset value of c. £3.7m as at 30 June. The acquisition, expected to complete in mid-November, is expected to be accretive to underlying earnings in the first full year of ownership. “Rock and Alluvium represents a strategic and complementary acquisition for the group and will be integrated within Van Elle’s General Piling Division. It provides the Group with an established presence in the South East, a region with good mid-term growth prospects which is currently under-served by Van Elle”. The company also announces it has entered into a five-year trading agreement with Galliford Try under which Van Elle will provide piling and geotechnical services. The Board anticipates that the trading agreement will generate revenues in excess of £10m pa.

Safestyle UK (SFE, 0.3p, £0.4m)

UK manufacturer, recycler and distributor of window, door and roofline PVC products. Suspension of shares. Group’s update to its announcement of 26 October 2023 in relation to the process it has been undertaking to try and secure a Proposed Sale, as that term is defined in that announcement. “As negotiations progress with interested parties, it has become increasingly unlikely, in the reasonable belief of the Directors of Safestyle, that any Proposed Sale, even if it was completed, will result in any return to shareholders. Due to the ongoing financial uncertainty regarding the Group, its limited working capital and the circumstances noted above, the Company has requested that its shares are suspended from trading on AIM with effect from 7.30am on 27 October”.

Fortnight ahead

Construction and property - company and economic news

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