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Not bad for a �35m m/cap company...... "The Board is pleased to report that the expected outcome for the year is in line with current market expectations, which are an underlying profit before taxation of circa �6.5m and revenues in the region of �310m." And the cash pile is up to almost �12m - 33% of the m/cap. Order books are up year on year, despite CTO only taking on high quality, good margin work. Which is why they have immaterial exposure to the likes of Carillion. Which is summed up by: "We will continue to target projects for margin growth from our core M&E markets as well as our other developing revenue streams, particularly in the areas of technology and digital integration."
Really interesting article about CTO's Intelligent Buildings division and its work with the likes of Cisco at the revolutionary development at 22 Bishopsgate: Http://www.tclarke.co.uk/news/client-focus-drives-tcib-design-of-landlord-wifi-network-for-22-bishopsgate I'm sure the market hasn't yet fully cottoned on to CTO's transformation.
100k on a profit of �6.5m is a rounding so we agree no direct impact. CTO are unlikely to be using the same subcontractors as CTO are Mechanical & Electrical and whilst they will subcontract some of the M&E they do, they do most of it in-house. This is one of their selling points as they can guarantee the premium quality jobs they love to do. I therefore don't see this as a material risk What I do see is an opportunity. CLLN have been keeping margins low for years by bidding for projects at stupidly low prices and abusing the supply chain for the last 30 years. I think it no co-incidence CTO have little to no exposure but now this work will instead go to respectable main contractors. I expect CTO to benefit from CLLN going into liquidation. Even if there is a small hit to the profit and loss this year, long term it will help turnover and margins. Looks like the MM shakeout is over. Hopefully back to 90 now.
T Clarke will be hit in the short term by Carillon's collapse. It claims £100K directly, but this could be higher indirectly if subcontractors T Clarke deals with go bust as a result of Carillon's collapse. That said, it may benefit in the medium term if it then buys those contractors out of administration.
I wonder if Carrillion does go under if we may buy some of the elements... Ive been in CTO for a few weeks now. Very excited for the coming years.GLA
Whoosh! Thar she blows - hopefully lots more to come.
Buying at 87p now. Just needs a little push and there could be quite a re-rating before and after the 1st Feb trading update.
And a raft of other buys at 88 and 90. For a while I thought we were going to end up close to 90 today. Looks like a limited number of sellers came out at once the bid went over 85. To be expected I guess. However really good that we had 84+ on the bid for 5 hours today and it closed there
89p paid for 15000 volume at 11:15 reported on Hargreaves. This is adjunct with a positive trading update coming shortly looks very promising indeed. Good luck guys and gals
Really excited about this. All fundamentals look in order, profits and revenues increasing, plenty of new orders already tied up. Clearly a high demand for our sector. GLA :)
Good to see buying at 86p this morning. Only 3 weeks until the 1st February year end update, which should be good given these extracts from November's update: Https://www.investegate.co.uk/clarke-t---plc--cto-/rns/trading-update/201711170700037636W/ "We entered 2017 in an optimistic mood. Our trading performance during the period has continued to justify that optimism and the Board is pleased to report that the results for the year ending 31 December 2017 are expected to be in line with current market expectations, which are an underlying profit before taxation of �6.5m and revenues in excess of �300m." "We continue to target projects that we believe will add value and help to improve the margin profile of the Group and the Board is encouraged that, whilst maintaining our selective approach to bidding, our forward order book now stands at �380m against �320m at the same time last year and a record �392m at the interim stage." "There remains a clear demand for our specialist services in the markets in which TClarke operates. We have already secured �190m and �100m of our planned revenues for 2018 and 2019 and beyond, respectively, and we are encouraged by the number and quality of the opportunities that continue to be available both within our established M&E markets and from the new opportunities that we are pursuing, driven by sustained investment at national level in both technology and infrastructure. The future for the Group remains encouraging."
Although there are 5 market-makers on CTO, only Winterfloods and N+1 Singer really make a market. Both of them used to offer larger volumes and tighter spreads a year ago than they do now. I would be hazzarding a guess that they have had to widen the spread as they have got burnt a few times over the last year trying to manipulate the market. Certainly I have managed to buy shares at certain times where it has been a puzzle to me where they have sourced the stock Anyways, in the real world the spread is often not as large as published, sometimes by quite a lot and it's usually skewed one way depending on whether they MM's want to buy or sell stock. Right now in the real world it's 81.24-83.78 for 5000 shares which isn't too bad. Certainly 83.78 looks pretty good to me given the flow of trade so far today.
Decent start to the New Year. With historic EPS forecast at 12.14p, rising to 13.16p EPS this year, CTO are on a current year P/E of only 6.45. The 3.46p divi rising to 3.66p also puts CTO on a 4%+ yield. Hopefully this will be the year CTO pushes on to 120p+ and perhaps 140p-150p. With good net cash and substantial chunks of future revenue for this and next year already secured - plus the expansion into M&E now looking very good - CTO's prospects should be bright, as confirmed by the recent year end trading statement.
Yes, spread often wide on this one but don't know why sorry. Hopefully good long term prospects though.
Why is the spread so high? I have been doing some research and will be investing shortly, however I am just waiting for the spread to drop. Its currently 5.66%, has it been this big for some time or is this just a recent thing? Don't really want to be 5.66% down straight away... And that's not including stamp duty and commission :/
Looks like the classic pattern to me where share rises on a good tip, moves up a little too fast in one go, then those in the know or desperate to get out sell their shares. Most of the short term traders are gone, with the final ones shortly about to close at 85 as that's around the best you could get. After that we have the investment phase. Those who remain will have a high level of conviction, happy to hold for an extended period of time and not sell out for a quick 5-10%. Just need to get to 85 first. L2 suggest buys bots searching around for stock today gradually lifting the bid as they don't find any stock. Fingers crossed they get more aggressive towards the end of the day and move on up.
Good summary - "with the real prospect of an earnings upgrade to come and a decent yield for income, then it would appear a re-rating is more a matter of when rather than if": https://www.google.co.uk/amp/www.cambridge-news.co.uk/business/time-invest-company-thats-worked-14060676.amp Extract: "With conditions being described then as buoyant the trend has subsequently been further endorsed through its November trading update where the board stated that the company was on track to deliver results in line with market expectations. This should see full year revenues of £300m delivered and leads broker Singer to pencil in £330m for 2018 with pre-tax profits moving to £7m and EPS of 13.2p. The dividend is also anticipated to be raised to 3.7p which at current levels equates to a yield just north of 4%."
Looking good chart-wise after today's upward move.
Ha. Well the Naked Trader may be able to stop a bargain but I don't think he can work out a decent exit point. 100p my arse. Has he seen the long term chart? 300 looks good to me. Maybe 250 if you're a pessimist. Profit 6.5m, net cash £9.5m, dividend of 4.1% at 80p, an all time high order book, improving margins in the sector and a P/E of 6.5 and a lovely earning enhancing acquisition of Eton just a couple of months ago.
Excellent news that the NT has just tipped CTO. Looks like his followers are really making a difference. The timing is perfect as it seems that the seller is now gone. Hopefully we will see a rise to the suggested 100p and beyond. It's about time the market recognised CTO's transformation in respect of M&E and digital. Here's the NT's tip: "T Clarke (TCO) looks great value. Took me bloody ages to get it at the sell price as sometimes the spread is silly, but I managed it with a lot of patience on direct access. I also had to end up buying the shares at the buy price too (how annoying) A very confident statement with an underlying profit of £6.5 m forecast. AND it has net cash of £9m. The market cap looks too low and I think it should easily head back to highs of 90p but I reckon it's worth at least 100p. It's simply under the radar."
The Naked Trader effect.........
Buying coming in at the full offer price - and an immediate sharp move up. Encouraging!
Up 1.75p today to 76.5p after just a 5k buy (and a 48k rollover). Hopefully another sign that the overhang has cleared.
L2 looking much better now, and some decent buying following the recent contract wins. There's been a seller out there for ages now. But the m/cap is only £31m - once the seller is gone I feel there could be a very quick re-rating, certainly to 90p at minimum and perhaps to 120p or so given the cash pile and low P/E.
Another big contract win for the South West division yesterday - the huge new Dyson campus in Wiltshire: Http://www.tclarke.co.uk/news/tclarke-south-west-secures-me-package-for-dysons-new-global-tech-campus "TClarke South West secures M&E package for Dyson’s new global Tech Campus Posted: 06th December 2017 Earlier in the year, the national press ran a major story on British engineering giant Dyson’s plans to open a vast new global Tech Campus in Wiltshire on a former MOD site, and double its workforce to around 7,000 in the next five to six years. Now TClarke South West is able to announce that it has secured the M&E package for the first phase of this project with Main Contractor, Kier. TClarke South West MD Rob Faro is delighted with the win: “We are always delighted to win major projects in the region where they fit with our targeted tendering and relationship based approach in partnership with main contractors such as Kier. These projects are critical in spreading the TClarke name as we build our operation across the South West.” “But I must admit to a special pleasure in being associated with another British engineering firm - one who doubtless has an enormous public reputation - but which certainly shares our commitment to quality work, innovation and real jobs in British engineering. “As well as providing a facility for research on robotics, battery cells, vision systems, machine learning, and AI, the sheer scale of the 517 acre Hullavington site means that manufacturing could be done there if the company wanted. All in all, it promises to be a wonderful job in which to be involved.”