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Good news - and shows CTO's transformation from solely an electrical contractor: Http://www.tclarke.co.uk/news/southbank-place-is-our-largest-mechanical-project-to-date "Southbank Place is our largest mechanical project to date Posted: 05th May 2017 TClarke’s selection to work with Principal Contractor Canary Wharf Contractors is a major success as TClarke London Director Barrie Nightingale explains. This is a landmark project on London’s Southbank and our scope comprises mechanical and electrical packages for shell and core on two towers and also the M&E fit out on Building two. For anyone who has an interest in TClarke, this project win is worth taking note of because it shows how our strategy in our core London M&E business is developing. If you have followed the business over the last few years, you will know that in London only a few years ago we were solely an electrical contractor. You will know that we acquired a mechanical business with the purpose of growing our mechanical capability to match our electrical capability and compliment it. Strategically, this would open up a very much larger market to our services and it would also give us the potential to tender for integrated projects. Southbank Place is our largest to date and it is precisely the kind of very large scale combined M&E project for which TClarke would not previously have been able to compete. Of course it is easy to talk about ‘capability’. It is far, far harder to develop the practical excellence and to deliver the TClarke service onsite, day after day - and build a reputation in this industry. That takes time and it takes a lot of people working hard and doing a very good job. So selection for Southbank Place represents a moment to recognise the quality and commitment of the people in TClarke London who have built our mechanical business in the last few years, working project by project to earn an opportunity like this - they really are helping to secure our prospects for now and the future."
Good to see continued AT trade (institutional) buying today in 5k and 10k lots. It won't take much to bring new recent highs here.
Looking forward to another good week here - hopefully new highs at the least, and perhaps up to and above 100p. I was pleasantly surprised to see for a still small £38m m/cap company quite an impressive list of institutional shareholders - the likes of Miton, Henderson, Chelverton, JP Morgan, Cavendish etc: Http://www.4-traders.com/T-CLARKE-PLC-4001787/company/
N+1 Singer have increased this year's forecast to 11.9p EPS, and next year's to 12.4p EPS. They also forecast an £11.7m cash pile at the end of this year. Which supports the forecast 3.5p and 3.6p dividends respectively. N+1 Singer have presumably allowed leeway for further upgrades during the year, particularly given the confidence CTO must have in stating they'll be "ahead" so early in the year. A P/E of 12 would give a share price of around 150p - around 70% ahead of the current price.
Indeed, blow-out news. Well worth the patience of being invested here. Happy to hold
Wow! An incredibly good AGM statement - and they're already able to say that profits will be ahead of expectations of 11.3p EPS: Http://www.investegate.co.uk/clarke-t---plc--cto-/rns/agm-statement/201705050700072409E/ Plus order books above £400m for the first time ever. The £9m+ cash pile also represents a significant portion of the m/cap - would have been nice to see what this is now. The current share price is just far, far too low imo.
Looking forward to Friday's AGM trading statement. Given the outlook from the recent finals the statement should be rather positive: "Mark Lawrence, Chief Executive commented: "We are delighted with the results that we are presenting today. Our business is clearly making good progress. Our focus on improving performance and margins throughout the Group continues to show through. Equally pleasing is that we have been awarded further contract wins which means that our forward order book as at the end of February 2017 now stands at £350m, a new record for TClarke. In addition, to support our prefabrication capabilities we will shortly be opening a brand new 26,000 Sq Ft facility at Stansted, Essex. The move will provide enhanced facilities for our people, while achieving improved quality and efficiency plus considerably extended capabilities in our prefabrication and manufacturing activities. The outlook for the future remains positive."
Http://www.tclarke.co.uk/news/central-team-wins-me-for-royal-national-orthopaedic-hospital "Central team wins M&E for Royal National Orthopaedic Hospital Posted: 18th April 2017 TClarke has been awarded the M&E contract for the Royal National Orthopaedic Hospital’s major new development, as TClarke Central & SW MD Kevin Bones explains: This is an excellent, large scale Hospital M&E project, including a Combined Heat and Power plant, HV works, Two 700Kva Backup Generators and a Photovoltaic installation. It is significant for our business for a few reasons. Another Targeted Tendering success Firstly, this is yet another major project which we have targeted and won, following our targeted tendering approach that has aimed our resources at the kind of projects where we can best show and deliver value for all our stakeholders. This job is a portfolio job on a large scale, it gives our teams the opportunity to help deliver something they can be proud of, it allows our Central teams to show and to further develop their skills in delivering large scale M&E projects. Further strengthening of our healthcare credentials Secondly, it further strengthens our Healthcare credentials, nationally and in this region. The chance to show skills and deepen our relationships and knowledge within the sector is extremely valuable to us. Evidence of our high quality order book Thirdly, this job shows everyone with an interest in TClarke, the kind of high quality jobs that our record £350m order book comprises. It is another signal of the confidence that the business has going forward - not just in London - but across our regional operations too."
The AGM trading update is in only 2 weeks' time on 5th May. Given the outlook in the finals I suspect it will be very positive. CTO's going ex-div last week is responsible for 2.7p of the recent fall.
Fundamentals look great but I must confess that I have been very disappointed with the share price sliding since the finals. Volume has been equally very low in the past few days.
It has £9.3m of cash against a £34m m/cap, and the forecast for this year is 11.26p EPS with a 3.46p dividend. That's a P/E of just 7.19 and a 4.3% dividend yield. With 27% of the m/cap in cash, the ex-cash P/E probably drops to only 5.5 or so. CC2015, good post - reflects my thoughts too.
Hi SGD27. If you take the view that the price has pulled back 5-6p since the results came out then it's fair to assume there was something in there investors didn't like. It's either a) the pension fund deficit or b) the dividend didn't go up enough because everything else was great. The situation with the pension fund deficit is driven by low annuity rates which have fallen and fallen since the crash in 2008. You can see the start of the reversal of this trend now with inflation creeping up so annuity rates will follow. For whatever reason whoever is selling hadn't really done their homework as the pension deficit had actually fallen between the interims and the finals and the agreed contribution from the company actually falls this year! I'm not bothered. I'm in this for the long term and a few years profits in the area of £6m-£10m range will soon fix a £20m pension deficit even if annuity rates don't rise. They have net cash of £9.3m at year end so the cashflow from profits only has to service corporation tax, dividends and the pension deficit - an enviable place to be when you compare with say CLLN where is is massive debt to service as well. Sometimes a company has to deliver a couple of years of decent profits before people wake up. I'm happy to hold and await the next interim statement where I look forward to a further increasing order book which in time will lead to further increased profits and thus cash and thus elimination of all concerns balance sheet related
Hi rivaldo, this does seem cheap, but do you think that it could be the increasing pension deficit (2015: £13.4m, 2016: £20.6m) that's holding things back?
For the record, the latest forecasts from N+1 Singer are: this year : 11.26p EPS, 3.46p dividend next year : 11.44p EPS, 3.56p dividend Simply too cheap at 81.5p.
Bonkers markdown imo, with presumably a seller or two taking advantage of post-results liquidity. Good to see the price bouncing now. The order book has increased to a huge £350m now - that's up £20m since 31st December alone. There's terrific visibility through to 2019. I can see a good re-rating upwards from here given the secure revenues going forward and the likelihood of continued good results. There will be an AGM trading statement soon, and that's likely to continue the positive vibes.
Bought some more this morning - excellent results. CTO are cheap purely on fundamentals given 11.7p historic EPS - then add in the £9.2m cash against a £35m m/cap and it's looking pretty good. There should be some nice tips in the press for CTO too after this.
Hopefully fly up to these and beyond.
Http://www.tclarke.co.uk/news/tclarke-introduces-major-new-prefabrication-facility "TClarke introduces major new prefabrication facility Posted: 14th March 2017 TClarke’s prefabrication workshop is to relocate to a brand new facility at Stansted, Essex. The move will provide enhanced facilities for our people, while achieving improved quality and efficiency plus considerably extended capabilities in our fabrication and manufacturing activities. Group Chief Executive Mark Lawrence set out the strategic advantages that the new site offered: “TClarke’s prefabrication operation has been a key strategic advantage in allowing us to support clients’ prefabrication strategies for major projects including the Shard and Nova Victoria. This move, supporting our strategy of buidling our core M&E business, provide major efficiency advantages for our business and environmental improvements for our people. It will also allow us to offer a wider range of services to our partners and clients going forward. This is organic growth, coming at a time when the business is stepping forward nationwide. "The new facility will consolidate all aspects of the business and improve productivity within a modern, high quality industrial unit. The unit will comprise the following: • 280m² of office on the first floor, incorporating meeting room, kitchenette and approximately 34 workstations • 1610m² of warehouse/prefabrication on the ground floor incorporating a paint shop, storage areas and 10no. welding bays • 245m² workshop on the ground floor • 215m² welfare facilities on the ground floor incorporating toilets, showers, changing and kitchenette. “Again it is an example of our steady growth strategy in action - creating value the TClarke way.”
Lots of news on the CTO web site, but this from a couple of weeks ago reads well as regards their new-ish Intelligent Buildings operation: Http://www.tclarke.co.uk/news/gas-suppression-systems-at-london-wall-place-signal-tcib-growth-strategy "Order book is also substantially expanded This growth in capability is also being matched by our order book growth - with the recent win of work on the vast 22 Bishopsgate project standing out. This is organic growth of the classic TClarke kind. Steady growth of in-house capability alongside the necessary accreditations, followed by delivery of significant wins which allow for further growth of capability. In the medium term we now plan to extend our offer into sprinkler systems - and that process is underway. A few years back we were a new operation. In 2016 we’re a genuine player in the market - a quality TClarke offer that not only builds high quality revenue for the firm but also allows us to be more competitive as a group when we approach major projects. So TCIB is also contributing to the agility of the business"
Nice close - hopefully new highs and beyond this week.
And HS2 has got the green light today - good news for CTO, who've said themselves it's a big opportunity for them.
Moving up again past old chart peaks - hopefully above 90p soon.
Since it's been posted in full elsewhere already by someone else, here it is FYI: "T Clarke - Cash adjusted PE of 4.7 74.75p Epic code: CTO (Sharewatch) T Clarke (CTO; 74.75p), a UK provider of mechanical, electrical and ICT engineering services, was once a stockmarket darling and could do no wrong. It operated nationally for many years and successfully across the lifecycle of an asset from design, installation and commissioning to FM. But then it got hit by several busses at once: the recession led to margin pressure; there were two lossmaking offices (now closed); two contract disputes (resolved); and an employee was found with his fingers in the cookie jar to the tune of £2.8m (recovery of this swindled cash underway). But things seem to have cheered up and CTO has issued an exceptionally strong update with full year profits for 2016 expected to be £6m, materially ahead of N+1 Singer’s £4.2m forecast. Based on eps of 11p, net cash of £9.2m (22p a share) and a record £330m order book, the shares are a buy on a cash adjusted PE of 4.7. 2016 results are due on 28 March. * The writer has a holding"
Continuing to move up. Lovely stuff. Should continue all the way to the results on 28th March given the strong trading update.
Great to see the overhang cleared and the excellent rise last week whilst I was on hols. With 11.2p historic EPS forecast for 2016, together with a 3.2p dividend - plus a £9m+ cash pile against a £33m m/cap - there would seem to be excellent upside from here.