AIM:RNO

Stock Analysis Report

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Executive Summary

Renold plc manufactures and sells high precision engineered power transmission products in the United Kingdom, rest of Europe, Americas, Australasia, China, India, and internationally. More Details


Snowflake Analysis

Good value with imperfect balance sheet.


Similar Companies

Share Price & News

How has Renold's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RNO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

RNO

-5.2%

GB Machinery

-5.1%

GB Market


1 Year Return

-54.4%

RNO

10.0%

GB Machinery

-20.0%

GB Market

Return vs Industry: RNO underperformed the UK Machinery industry which returned 10% over the past year.

Return vs Market: RNO underperformed the UK Market which returned -20% over the past year.


Shareholder returns

RNOIndustryMarket
7 Day0%-5.2%-5.1%
30 Day-10.1%3.7%-4.3%
90 Day-4.2%7.8%-4.5%
1 Year-54.4%-54.4%11.5%10.0%-17.0%-20.0%
3 Year-77.8%-77.8%10.4%3.0%-13.6%-24.3%
5 Year-83.0%-83.0%86.5%63.9%10.2%-14.6%

Price Volatility Vs. Market

How volatile is Renold's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Renold undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RNO (£0.1) is trading below our estimate of fair value (£0.26)

Significantly Below Fair Value: RNO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RNO is good value based on its PE Ratio (7x) compared to the GB Machinery industry average (21.3x).

PE vs Market: RNO is good value based on its PE Ratio (7x) compared to the UK market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RNO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RNO has negative assets, so we can't compare its PB Ratio to the GB Machinery industry average.


Next Steps

Future Growth

How is Renold forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-2.7%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if RNO's forecast earnings growth is above the savings rate (1.2%).

Earnings vs Market: Insufficient data to determine if RNO's earnings are forecast to grow faster than the UK market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: RNO's revenue is expected to decline over the next 3 years (-2.7% per year).

High Growth Revenue: RNO's revenue is forecast to decline over the next 3 years (-2.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RNO's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Renold performed over the past 5 years?

-6.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RNO has a large one-off loss of £2.5M impacting its March 31 2020 financial results.

Growing Profit Margin: RNO's current net profit margins (1.7%) are lower than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: RNO's earnings have declined by 6.8% per year over the past 5 years.

Accelerating Growth: RNO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RNO had negative earnings growth (-50.8%) over the past year, making it difficult to compare to the Machinery industry average (-13%).


Return on Equity

High ROE: RNO's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Next Steps

Financial Health

How is Renold's financial position?


Financial Position Analysis

Short Term Liabilities: RNO has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: RNO has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: RNO has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: RNO's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: RNO's debt is well covered by operating cash flow (20.9%).

Interest Coverage: RNO's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet


Next Steps

Dividend

What is Renold current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RNO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RNO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RNO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RNO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RNO's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average board tenure


CEO

Rob Purcell (58 yo)

7.75yrs

Tenure

UK£378,000

Compensation

Mr. Robert Purcell, also known as Rob, has been the Chief Executive of Renold plc since January 21, 2013. Mr. Purcell served as Managing Director of Protection and Finishing products of Filtrona plc until ...


CEO Compensation Analysis

Compensation vs Market: Rob's total compensation ($USD489.73K) is above average for companies of similar size in the UK market ($USD350.40K).

Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Robert Purcell
Chief Executive & Executive Director7.75yrsUK£378.00k2.1%
£ 486.2k
David Landless
Senior Independent Non-Executive Director0.83yrUK£47.00k0.016%
£ 3.6k
Mark Harper
Non-Executive Chairman8.25yrsUK£121.00k0.56%
£ 129.3k
Timothy Cooper
Independent Non-Executive Director1.83yrsUK£42.00k0.019%
£ 4.5k

4.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: RNO's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RNO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Renold plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Renold plc
  • Ticker: RNO
  • Exchange: AIM
  • Founded: 1864
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: UK£23.105m
  • Shares outstanding: 225.42m
  • Website: https://www.renold.com

Number of Employees


Location

  • Renold plc
  • Trident 2
  • Trident Business Park
  • Manchester
  • Greater Manchester
  • M22 5XB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RNOAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJan 1992

Biography

Renold plc manufactures and sells high precision engineered power transmission products in the United Kingdom, rest of Europe, Americas, Australasia, China, India, and internationally. The company operates ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/31 21:30
End of Day Share Price2020/10/30 00:00
Earnings2020/03/31
Annual Earnings2020/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.