Renewi’s (RWI) statutory earnings continue to be marred by exceptional charges, which totalled €120m (£107m) in the year to 31 March. These include €56m relating to the disposal of industrial cleaning business Reym, and a €26m charge from a Dutch tax on imported burnable waste. Still, its statutory pre-tax loss narrowed from a year earlier. On a like-for-like basis, underlying operating profit from continuing operations dipped 4 per cent to €82m.
The commercial waste division accounts for the bulk of earnings and like-for-like underlying operating profit remained flat at €88m. This came as cost savings and higher prices charged for inbound waste offset weaker markets, lower recyclate income and a €4m hit from Covid-19. As the pandemic reduces waste volumes, Renewi is guiding to a potential €20m hit to overall operating profit and cash in the first quarter of this year.
With €107m received from disposals, ‘core’ net debt – which excludes lease liabilities and public-private partnership borrowings – came down 17 per cent to €457m. Equivalent to 2.98 times cash profits (Ebitda), this is below the group’s banking covenant of 3.5 times. That covenant limit has been increased to a peak of six times this year to allow sufficient headroom during this crisis. With €252m of liquidity as at 31 March, Renewi says it has no need for additional funding from governments, banks or shareholders.
Peel Hunt forecasts adjusted pre-tax profit of €4.9m and EPS of 0.5¢ in 2021, down from €42m and 4¢ in 2020.
| RENEWI (RWI) | ||||
| ORD PRICE: | 26.3p | MARKET VALUE: | £209m | |
| TOUCH: | 26.2-26.3p | 12-MONTH HIGH: | 46p | LOW: 18p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 29p* | NET DEBT: | £750m* | |
| Year to 31 Mar | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
| 2016 | 0.61 | -2.50 | -0.9 | 3.45 |
| 2017 | 0.78 | -61.4 | -11.3 | 3.05 |
| 2018 | 1.76 | -52.8 | -6.5 | 3.05 |
| 2019 | 1.78 | -89.0 | -9.0 | 1.45 |
| 2020 | 1.78 | -59.4 | -7.7 | 0.45 |
| % change | -0.3 | -33 | -14 | -69 |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £610m, or 77p a share, **Includes lease liabilities of £218m | ||||
