| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 248.40 | -71 |
| Intrinsic value (DCF) | 265.23 | -69 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 0.80 | -100 |
Renewi plc (LSE: RWI.L) is a leading European waste-to-product company specializing in sustainable waste management and recycling solutions. Headquartered in Milton Keynes, UK, Renewi operates across the Netherlands, Belgium, the UK, France, Portugal, and Hungary. The company is structured into three key segments: Commercial Waste, Mineralz & Water, and Specialities. Renewi collects, treats, and recycles commercial waste, including wood, plastics, paper, and organic materials, while also processing contaminated soils, industrial waters, and hazardous waste into reusable construction materials. Its Specialities segment focuses on recycling electronic waste and glass, serving municipal councils and industrial clients. Founded in 1880 and rebranded from Shanks Group plc in 2017, Renewi plays a critical role in the circular economy, aligning with global sustainability trends and stringent EU waste regulations. With a market cap of approximately £695 million, Renewi is positioned as a key player in the European waste management sector, leveraging advanced recycling technologies and strategic partnerships to drive long-term environmental and financial value.
Renewi plc presents a mixed investment case. On the positive side, the company operates in a resilient and growing waste management sector, benefiting from increasing regulatory pressures and corporate sustainability commitments. Its focus on waste-to-product solutions aligns well with the circular economy trend, providing potential for long-term growth. However, the company reported a net loss of £34.1 million in the latest fiscal year, with negative diluted EPS of -0.5p, raising concerns about profitability. While operating cash flow remains healthy at £168.7 million, high total debt of £695 million could constrain financial flexibility. The dividend yield, at 5p per share, may appeal to income-focused investors, but sustainability depends on improved earnings. Renewi's beta of 0.999 suggests market-average volatility, making it a moderate-risk play in the industrials sector. Investors should weigh its strong market position against ongoing profitability challenges.
Renewi plc competes in the fragmented European waste management industry, where scale, technological capabilities, and regulatory compliance are critical. The company's competitive advantage lies in its integrated waste-to-product model, which differentiates it from traditional waste disposal firms. Renewi's strong presence in the Benelux region, particularly in hazardous and construction waste recycling, provides a regional moat. Its Mineralz & Water segment, which processes contaminated materials into construction products, is a unique offering with limited direct competition. However, Renewi faces pricing pressure from larger waste management conglomerates with greater economies of scale. The company's specialization in complex waste streams mitigates some competition but also limits growth in broader waste collection markets. Renewi's focus on sustainability and circular economy principles aligns with EU policy trends, potentially providing regulatory tailwinds. Yet, its smaller size compared to global leaders means it may lack the capital for aggressive expansion or large-scale acquisitions. The competitive landscape requires Renewi to balance niche expertise with the need for operational efficiency to improve margins.