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All the signs are there for a big increase in share price IMO. Two directors are buying shares. AGM states CTO have had an excellent start to the year. Order book has seen a nice increase. Profits growing, debt reducing, PE ratio reducing, yet the share price is not moving. It's only a matter of time until this share gets noticed and we all see some nice returns. GLA :)
The AGM statement stated CTO had had an "excellent start to the year". With order books up almost 10%, plus the FD making unusually large share purchases, the odds are that the results in a month's time will be very good indeed.
Balance sheet healthy, fundamentals sound, nice to have the director purchase as confirmation that all is well.
For the record, here's N+1 Singer's take on the AGM statement - for the record, they go for 13.2p EPS this year and 14.1p EPS next year (with 3.7p and 3.9p dividends respectively): "Positive order book momentum provides a share price catalyst N+1 Singer view T Clarke�s AGM statement confirms positive order book momentum and reiterates full year expectations. The order book has risen from �337m at the last year end to �368m at the end of April, which is impressive, given T Clarke�s disciplined approach to tendering. With current year revenue forecasts now fully covered, we expect today�s update to be very well received. In our view the shares are overdue a re-rating, currently trading at very modest multiples of earnings (6.1x P/E with a 4.6% dividend yield). Positive AGM update For the full year, revenue and adjusted PBT are expected to be in line with our forecasts (�300m and �7.0m respectively) and net cash is expected to continue its trend of year on year improvement (we are forecasting �13m at Dec �18). The statement also highlights strong growth in the order book, which at 30th April stood at �368 million,increasing from �337 million at the end of December. Encouragingly, T Clarke is seeing no shortage of opportunities but as ever, management is applying a strict policy of only bidding for projects that meet its own internal risk analysis criteria. In this context, the significant growth in the order book is particularly impressive. Management announced a 3% operating margin target at the time of the prelims in March (current year forecast 2.7%) and we would expect the growth in the order book to be consistent with this ambition. The order book growth is broadly based but Newcastle and the North West both have some capacity to fill. Since the last announcement on 27th March, T Clarke has won several important projects, including electrical infrastructure resilience works for BAE Systems and fit out work for Cancer Research at the International Quarter, Stratford. It has also won electrical infrastructure work at Battersea Power Station. Separately, Tony Giddings has resigned as a non executive director. As a result, Mike Robson will become Senior Independent Non-Executive Director and Peter Maskell will chair the Rem. Comm. Impact on earnings & valuation We make no changes to our forecasts, noting the positive outlook commentary. As well as providing excellent visibility for the current year, which is now fully covered, the order book also includes �145m of revenue secured for FY19 and a further �40m beyond that year. We believe the Group is well on track to achieving its margin targets, particularly since the underperformance of Central and South West (loss making last year) has been addressed."
Hello - 46,000 shares bought in the last few minutes, and suddenly things are happening..... There's a terrific report of the recent AGM here: https://www.stockopedia.com/content/tclarke-cto-overlooked-intelligent-building-provider-365804/ APAcquisitions, you are correct - if you strip out the cash pile then the P/E is likely around 4.5 or so. The cash pile is lower at the interim stage at some �2m-�3m from memory as there's some cyclicality, but even if you take a yearly average cash pile of say �7m then that's pretty material against a �36m m/cap.
Am I right in thinking that if you strip out the cash pile the adjusted p/e is about 4.5?
CTO are even more of a bargain now imo, especially as the price is from the look of it being artificially held down by a seller. Once he's out there could be a very quick rise. CTO have now confirmed that revenues for this year are already secured. On forecast 13.2p EPS that's a P/E of only 6.4. So presumably any new business won will further contribute to this year's outturn. Plus N+1 Singer's forecasts are based upon 2.7% operating margins, whereas CTO have themselves confirmed they're targeting 3% margins. Plus CTO have almost 40% of their �35m m/cap backed up by a �13.1m forecast cash pile.
Wow! Order books are up hugely since the year end. Trading is nicely in line for a miserly P/E given 13.2p EPS - and revenues are already secured for this year and are going well for 2019 and 2020.... Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/CTO/13646057.html "We are pleased to report that we continue to expect revenues and profits for 2018 to be in line with current market expectations. To put those in context for the year ending 31 December 2018, these are forecast to be revenues of �300 million, underlying profit before tax of �7.0 million and underlying EPS of 13.2p. We also expect to maintain our trend of underlying positive movement in net cash year-on-year. Our forward order book has been replenished and as at 30th April 2018 stood at �368 million, increasing from �337 million as at 31st December 2017. Encouragingly, we are seeing no lack of opportunities, but we maintain a strict policy only to bid for projects that meet our internal risk analysis and where we are comfortable with the covenant and market reputation of the contractual counterparty. Overall, the planned Group revenues for 2018 have now been secured with some capacity in the North West and Newcastle businesses to address. Future secured revenues are �145 million for financial year 2019 and �40 million for years 2020 and beyond..... .....Once again, TClarke has made an excellent start to the year and the Board looks to the future with continued confidence."
Good news for CTO, for the next few years at least: Https://www.theguardian.com/business/2018/apr/18/londons-skyline-soars-with-record-510-tall-buildings-in-pipeline "London's skyline soars with record 510 tall buildings in pipeline Construction has begun on cluster of skyscrapers that will transform city over next decade London�s skyline is to be transformed over the next decade with a record 510 tall towers, more than 20 storeys high, planned or under construction. The total is up from 455 towers in the pipeline in 2016, according to research from the industry forum New London Architecture (NLA) and real estate consultancy GL Hearn. Construction has started on 115 towers, also a record. Over the past two years, work started on more projects than in the preceding five years combined. Twenty-two Bishopsgate, formerly nicknamed �the Pinnacle� and then �the Stump� after work stalled, will be � at 62 storeys or 278 metres � the tallest building in the City of London when it is completed next year. However, in the 2020s it will be overtaken by 1 Undershaft, nicknamed the Trellis, at 290m. Two of Europe�s tallest residential towers will be the 233-metre Landmark Pinnacle on the Isle of Dogs and the 235-metre Spire London, also in Canary Wharf. Both are expected to be completed by 2020. But they do not come close to the Shard, which, at 310 metres, remains the tallest building in Europe."
ADVFN have a problem with their price feed which goes wrong every day at 12:02 on every stock. I've reported it to them but they aren't interested in fixing. The price feed can remain wrong for the rest of the day but sometimes corrects. It's only really noticeable on low market cap. stocks. Not sure what to advise. I pay for premium so that helps
If my simple maths is right, strip out �11m net cash (roughly a third of current market cap), then 2017 p/e is 4.5 based on 12pps earnings. Share price - please go up!!
The latest RNS states a objective of an underlying margin of 3% in the medium term. They don't say what the medium term is but I interpret that to mean somewhere between 2 and 3 years. So, worst case. 3 years to get to 3% margin, 3% turnover growth, P/E 6 Current turnover �311m * 1.03^3 = �340m �340m at 3% margin gives a profit before interest of �10.2m and �9.4m after interest If we use a really low P/E of 6 this would give a valuation of �45.7m or 109p per share, some 31% higher than it is today at 83p. This is pretty close to the N+1 Singer note Rivaldo refers to of 106p per share although I don�t have access to it and don�t know what calculations they do. Best case scenario, 2 years to get to 3% margin. 6% turnover growth. P/E 10 �311m*1.06^2=�350m At P/E of 10 gives market valuation of �78.6m or 187p per share. In both scenarios dividend is now 3.5p (4.2%) and given that it went up 0.3p this year I think it's safe to say it's guaranteed it will go up 0.3p in 2018 and that given the cash flow it will move higher. I�ve ignored the fall in interest costs in the above calculation as the cash balance increases but this would add to the valuation too. So, how do-able is the 3% margin. Currently it looks like this: Revenue Profit Margin London & SE 177.6 8.5 4.8% Central & SW 62.6 -1.8 -2.9% North 48.0 2.4 5.0% Scotland 23.0 0.8 3.5% Group -2.6 Total 311.2 7.3 2.3% To get to 3% we need a profit of �9.3m, an additional �2m. If we look solely at Central & SW the loss in June interims was �2.2m, but ending the year at a loss of only �1.8m suggesting it�s now turning a profit. The finals say this �Looking forward, South West has its budgeted turnover secured for 2018 with good quality jobs. As a result, the region is expected to be profitable in the current period�. It would seem that this would produce the additional �2m on it�s own or alternatively you might view the �0.4m profit in the second half of the year could be doubled giving an improvement of �2.6m. We should note the additional �0.25m additional contribution to the pension scheme will have to be found too but however I look at this the 3% margin doesn�t look too challenging and whilst the directors are renowned for under-promise and over-deliver it seems the 3% margin might be done in 2018 especially if you consider the general margin improvements being reported by the sector. I will curb my enthusiasm and suggest there will always be a problem job somewhere in the company and thus the 3% won�t be achieved this year but a two year time horizon does seem very do-able. Finally I note the company is retaining about �5m cash a year after payment of corporation tax and dividend (if no further significant investment or acquisition) which is going to give net cas
Those valuations from N+1 Singer are before today's results. I would expect based on the stable order book and margin improvement target for those to be raised when Singer review the results.
N+1 Singer see 106p as intrinsic value here, but they forecast 13.2p EPS this year rising to 14.1p EPS next year - with an almost 5% dividend yield. CTO's peer group trades on a P/E of 9.7. Which to me would suggest a fair price target of around 130p or so. Especially given CTO's almost �12m cash pile and the transformation of CTO's services into high quality M&E/digital installation work.
Very good results, slightly ahead of N+1 Singer's expectations in all respects - PBT, EPS and dividend. 12.37p EPS compares to forecast 12.14p. The 3.5p dividend is slightly ahead of 3.46p forecast. Above all, the record order book and extremely confident outlook bode very well: "Outlook 2017 was another very good year for TClarke. Our current and forward order book is fully replenished with high-quality projects, many of which are business critical for our clients. The strength of our order book is evidence of our significant market share and we are maintaining our discipline and focus to deliver sustained margin improvement across all our regions. The Board is confident that the Group is well placed to meet profit expectations for the year ahead and our commitment to sustained performance growth is such that the Board has set a medium term target to increase the underlying operating margin to 3%."
for no apparent reason... Good to see. It's well overdue.
Big article on the new "large-scale" win for the South West team referred to by igoe104: Http://www.tclarke.co.uk/news/south-west-team-starts-work-on-another-major-landmark-project "South West team starts work on another major landmark project Posted: 09th March 2018 TClarke South West has been given the go-ahead on another large scale, mechanical and electrical, design and build project, working with long-term partner Willmott Dixon. This time it is Bath Spa University�s new Bath School of Art and Design building on the site of the old Herman Miller furniture factory. This Grade II listed building has been empty for over five years and will now be redesigned and built as the new Bath School of Art and Design. Plans for the building include modern teaching facilities, practical workshops, studios, a gallery space, as well as a caf� and art shop. Commenting on the job, TClarke South West�s Managing Director Rob Faro said: �I am delighted that we're up and running on another very high profile, high quality and large scale project which builds on our long term relationship with Willmott Dixon. When you look at projects like this and The Box in Plymouth, you can see that we are tendering for and winning some of the biggest and most exciting M&E projects in the region. These projects give stability to our order book and opportunities for our brand and our people."
Encouraging to see per this news from 2 days ago that CTO have doubled their Fire Alarm team in the last 6 months (and almost all via internal appointments too). Post the Grenfell Tower tragedy, fire prevention work has been going through the roof (I recently saw a presentation confirming this by one of my other investments, PTSG). Hopefully CTO will be benefiting: Http://www.tclarke.co.uk/news/the-best-fire-alarm-team-in-london Extract: "3. Current experience of successfully delivering major projects Our team has been fortunate in the recent period to have built our experience on a series of jobs which are high profile, challenging and successful. 60 Victoria Embankment is JP Morgan�s HQ and we successfully installed and commissioned our systems there while the business was still operating on site. Rathbone Square (now HQ of Facebook) involved us in heavily integrating the fire alarm and smoke damper system and going so far as to develop bespoke equipment to meet our client�s requirements for ease of commissioning. London Wall Place which houses HQs of Schroders and Cleary Gottlieb has been another current project on a massive scale."
Another year of progress, in line with expectations T Clarke�s trading update highlights another year of good progress. Revenue in the year to 31st December increased 11% to c.�310m, generating underlying PBT of �6.5m, bang in line with our expectations. The Group outperformed on cash, with net cash at the year end of �11.7m, ahead of our �9.0m forecast and increasing 26% on last year. The order book strengthened year on year to �337m (2016: �330m), down on the �380m reported in November reflecting the Group�s selective approach to tendering with a good amount of future contract opportunities. The statement reiterates T Clarke�s financial discipline. The Company has also announced the appointment of Trevor Mitchell as Interim FD, replacing Martin Walton with immediate effect. Trevor brings extensive experience across multiple sectors, including construction. We would expect this morning�s announcement to be well received, with all key metrics moving in the right direction. The Group trades on a modest FY�18 P/E rating of 6.2x, 5.4x EV/EBITDA, a significant discount to the construction contracting peer group (10.1x P/E, 6.4x EV/EBITDA). We also note the attractions of a 4.5% dividend yield.
An increase in the dividend from the current 3.3p to 3.7p would be very welcome and the yield should put a floor under the share price. That's 4.6% based on 80p and only paying out 28% of the earnings per share as dividend. Very sustainable and cautious. To be applauded really.
N+1 Singer have reiterated their forecasts for this year of: 13.2p EPS 3.7p dividend �11.3m closing cash, which will be reviewed - and presumably increased significantly - following March's results. Looks like some traders were stuffed by the MMs this morning. Bouncing nicely now, and hopefully a much bigger bounce to come given the cheap fundamentals, transforming profile of the company, strong Balance Sheet and concentration on margins and high quality business.
Can't believe I missed the low of 72p today! Would of been amazing to top up at that level on the back of good news! Seems to be rising quite nicely following that suspicious drop haha. Good RNS imo, more cash in the bank, no downfall from Carillon confirmed, more work in, onwards and upwards, good luck guys :)
Agree Rivaldo. A very solid performance so have topped up given the small decline- which was a nice surprise