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Anyone think there might be a higher bid?
The eps for full year '24 is 24p.,so they are getting CTO for less than 7 times 2024 earnings.We all lose out.
SMDS and now CTO, I’m not complaining really as it’s profit, but both these companies have been sold off very cheap.
I do so agree. This has been going on for quite a few years now and I have lost really good companies. I would like to invest for the longer term, but I keep finding great companies snatched away. Sadly, we are in a topsy-turvy world where there is jam today but no bread tomorrow...
I have to agree Rivaldo, CTO is a great business unloved the data centres was what attracted me which to me seemed a good move for the company.
That makes five of my share holdings taken out on the cheap so far this year . Annoying!
Excellent news on an otherwise grim market day. Like Rax I took a position post what I thought were positive results and prospects. In the medium term this looked a good prospect and is a piece of good business by Regent. There might be an alternative bidder. The fact it’s a cash deal makes it attractive though.
Am in no rush to sell my holding. Maybe we will see interest from others as this company undervalued for a long time....
Very prescient comment raxfactor!
So Regent are to acquire CTO for just over 164.5p. A good result for me investment-wise, but a very poor one in terms of CTO's worth, and taking advantage of the one-off dip following the very unusual contract difficulties last year.
Regent have 21%, so 24% including the directors' shares. Maybe not enough to win through if there's significant opposition or to defeat a rival bidder?
Yet another example of listed UK companies being extremely undervalued, especially a top quality company like CTO given its increasing exposure to data centres, healthcare, ESG and the like.
Acquisition target spot on, 160p per share plus dividend payable.
GLA
Took a small position after the results came out, for some reason the market hasn't responded to what I thought are excellent prospects moving forward what's not to like with the order book plenty to look forward to, often wondered if this company is ever seen as a acquisition target.
All is right about this company,but the problem is few people are buying the shares at the moment and so shares aren't moving.Crazy price after results,on a forward p/e of 5.That's the UK market for you-move to USA!
They forecast 24.1p EPS:
"High quality projects across a range of sectors
TClarke’s FY 2023 results and forward-looking commentary are in line with the November trading statement, and we make no changes to our forecasts. Revenue of £491m in 2023 exceeded the 3-year plan to double revenue from £232m in 2020 and management have confirmed the group is well positioned to achieve growth plans for 2024 and beyond backed by the £943m order book (up +70%). FY 2023 PBT of £7.6m is down from £10.3m in 2022 due to the previously highlighted measures to protect the business from the current, very challenging construction market conditions. These measures included changing some supply-chain partners mid-contract to protect project completion dates, and the early finalisation of project accounts where customer risk had been identified. All projects are expected to be delivered according to their schedules but the one-off costs of these measures restricted the operating margin to 1.9%, below the target 3.0% (2022: 2.7%, 2024E 3.1%).
We reiterate our view that on a 2024E P/E of 5.3x (vs peers 9.1x who are subject to the same market challenges), dividend yield of 5.1% and net cash of £19m the valuation underestimates the company’s long-term growth potential, and market and financial position. The key driver for the share price will be increasing evidence as the year progresses of forecast deliverability.
- Order book up 70%. The strategy of organic growth focused on five core market sectors whilst building market presence in data centres, large projects outside of London, smart buildings and healthcare is delivering. Data centres now account for £346m within the total £943m order book. This total compares to £1.1bn at October 2023 due to the normal seasonally lower win rate at the end of the year being offset by orders completed (H2 revenue was up +37% on H1).
- Net cash £19.3m up from £7.5m. Key movements were: equity raised £10.1m, dividend cost £2.5m, and free cash flow £4.1m. Importantly, given the market conditions, bad debt expense was only £0.3m and in line with the group’s historical average. On the balance sheet contract assets increased by £30m as one of the large, multi-year contracts ramped-up activity, offset by a £30m increase in trade creditors reflecting the strong cash characteristics of this contract.
- Dividend raised 10% as expected. The 2023 dividend was raised to 5.9p from 5.35p reflecting the progressive dividend policy, net cash and growth prospects.
- Medium-term target price 197p, +55% upside. Our medium-term target price is based on a -10% discount to the broad peer group average 2024E P/E. The discount reflects the impact of the larger, highly rated renewals and infrastructure operators within peers. We do not expect construction market conditions to significantly improve in the short term and expect the share price to be driven by increasing confidence in TClarke’s revenue, margin and cash
Cheap on every metric imo. Directors' pay is high, but (1) they're doing an excellent job, and (2) it doesn't matter if the figures are good enough for long enough. People were moaning at MSI's huge directors' remuneration for years - then the shares re-rated and became a five-bagger.
Here's the tip:
Https://masterinvestor.co.uk/equities/small-cap-catch-up-fan-cto-and-stvg/
"Analysts Andrew Gibb and Guy Hewett at Cavendish Capital Markets estimate that the year to end December 2024 will see £600m revenues, with adjusted pre-tax profits rebounding to £17.1m, hoisting earnings up to 24.1p and amply covering a 6.5p dividend per share.
For 2025 they see £650m, £19.1m, 26.9p and 7.1p respectively.
Those estimates easily back up the analyst’s Medium-Term Price Objective of 197p for the group’s shares.
At the end of last week, the shares, which hit 159p last June, were fractionally lower at 122.50p – at which level they are a strong hold for existing shareholders and offer a bargain for newcomers."
Have a look at the level of director pay for this quite small cap. The figures were flagged on Stocko'. If those figures are correct, then I'm shocked.
I can see why companies want to move from London's markets-pathetic response to already flagged result.In fact slightly better than expected.2024 is the year that will see a big jump in eps and with it the share price.I can't understand why people would want to sell now.
The market has already priced in last year's reduction in PBT.
But the overall health of the company looks terrific, with the order book up 70% to a whopping £943m and a positive forward outlook. The move into data centres has been a huge success and should continue to thrive.
Net cash at £19.3m compares nicely to the £67m m/cap.
Cavendish have left their forecast for 2024 unchanged at 24.1p EPS. Which leaves CTO looking very cheap.
They have a 197p price target.
How do you know reporting is tomorrow? Already been delayed by 1 week.
Seems to be a complete absence of interest in this company.
Reporting tomorrow and as of now only two transactions have taken place.
Pathetic,but II am looking for increase i both turnover, profits and most importantly margins.
If we get all three, massive increase in price.
Bought another £1000 a couple of days ago.
Fill your boots chaps.
Preliminary results tomorrow.
Must be a bi lift in the shares at current price.
Nice PE ratio and prospects for a company with a record order book.....Far too cheap....Margins could easily be increased...So a company very much undervalued....
Perhaps they should be concentrating on maintaining a decent margin rather that chasing turnover.
Running to stand still.
Smell a bit fishy. Wouldn't be surprised if this is back in the black by COP today. Tempted for the day trade.
Don't look at all bad to me so why is there a 10pct drop this morning ?