Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Posted on CTO's web site dated 8th November, confirming it's a big one:
Https://www.tclarke.co.uk/once-again-scotland-beats-record-for-me-project-scale/
"Once again Scotland beats record for M&E project scale
TClarke Scotland has won a major project with partners Heron brothers to build the vast new Eurostampa printing facility in Cumbernauld. This win improves on our previous record for project value, as TClarke cements its presence as an M&E leader in Scotland.
Scotland Managing Director Chris Harris congratulates the teams responsible for achieving the win:
“The Eurostampa UK project is an 82,000 sq ft expansion and refurbishment to create a vast new state-of-the-art specialised printing facility. This is a major project within the market and our ability to succeed here, partnering with Heron Brothers, is another step forward for the company."
Contract win news posted yesterday - looks like a sizeable 18-month contract from happy previous customers:
Https://www.tclarke.co.uk/gpe-and-lendlease-trust-tclarke-to-deliver-again/
"GPE and Lendlease trust TClarke to deliver again
TClarke has been awarded both the Mechanical and Electrical packages to deliver 2 Aldermanbury Square for long term partners GPE and Lendlease. 2 Aldermanbury Square aims to set exceptional standards across environmental metrics, while delivering a new HQ for global legal firm Clifford Chance. Group Chief Executive Mark Lawrence commented :
“I am proud that GPE and Lendlease have once again trusted TClarke to deliver this landmark. I often talk about the ‘TClarke Way’; the culture it sets defines the values we embed within our teams across all our projects – and it is these values that create our success.
“When GPE and Lendlease trust TClarke to deliver on 2 Aldermanbury Square, that trust is based on decades of successful collaboration. Working together in recent years we have delivered successful projects such as Rathbone Square and Oxford House – now recognised as 1 Newman Street & 70 / 88 Oxford Street. The team at 2 Aldermanbury Square are the same team who delivered Oxford House.
2 Aldermanbury Square is a special project – focused on achieving ambitious embodied carbon reduction targets, as well as the NABERS 5 Star accreditation. The M&E packages include large scope of works items such as:
Tenant Life Safety Generator Package
HV / LV Package Substations
LV Systems
Gravity & Symphonic Drainage
Domestic Water Systems
Heating & Cooling Systems
Condensate Systems
Our team is now mobilised on site, undertaking key design and technical reviews, BIM Modelling and drawing production in advance of our start on site in April 2024, with a project completion in Q4 2025."
Good to see the lunch of an Alternative Energy Solutions division and a "major" contract win helping to improve EPC ratings which are going to be so important for all commercial buildings - this dated 25th September:
Https://www.tclarke.co.uk/tclarke-alternative-energy-solutions-launches-with-major-win/
"TClarke Alternative Energy Solutions launches with major win
TClarke is launching Alternative Energy Solutions to help building owners improve EPC ratings for old buildings, meet climate targets, Improve their carbon footprint and critically, make newly available technologies a practical option.
The launch is also marked by the announcement of a major Alternative Energy contract win and one of the very first commercial building energy upgrades on this scale – helping 30 Fenchurch Street substantially improve its EPC rating, within an holistic programme of design works and technology installation.
Achieving major design stage improvements
The project was taken from a stage 2 through to a stage 4a design and during this process the original plant concept was reviewed and re-designed with performance improvements and enhancements.
This was achieved with the implementation of new simultaneous four pipe heating and cooling Air Source Heat Pumps (ASHPs), along with additional air cooled chillers to be provided to the roof area. This enabled the original existing water cooled chillers in the basement and the cooling towers on the roof to be decommissioned and removed.
These new capital plant improvements enabled the property EPC rating to improve – all with zero impact to the tenant’s business operations.
Actively engaging manufacturers to ensure optimal equipment selection
Manufacturers were engaged to ensure equipment selection was robust and satisfied the design criteria, this was confirmed through our TClarke design team. A key factor was the COP and EER of the new plant. Refrigerant and compressor selection were also important to ensuring that optimum performance was obtained.
Throughout the plant replacement phase, we engaged with the client to demonstrate added value. This was shown with HV & LV electrical works, where existing aged equipment was removed and multiple LV distribution boards were amalgamated into single new larger distribution boards.
Optimised logistics plan for City location
30 Fenchurch Street is in the heart of the City; as such the plant logistics are critical to project delivery. These were analysed and modelled to reduce the total number of lifting events and provide a structured plan to meet the programme and maintain the client requirements."
Https://www.construction-europe.com/news/contractors-named-for-us10-bn-framework/8031459.article
"Contractors named for US$10 bn framework
By Leila Steed06 September 2023
3 min read
Procure Partnerships Framework (PPF) in the United Kingdom has appointed 12 demolition and site preparation specialists to the second iteration of the country’s £8 billion (US$10 billion) National Framework,
A miniture model of construction workers on a construction site (Adobe Stock)
Procure Partnerships Framework (PPF) in the United Kingdom has appointed 12 demolition and site preparation specialists to the second iteration of the country’s £8 billion (US$10 billion) National Framework....
etc"
Momentum Investor said Buy in their last-but-one September issue. Here's their summary:
"In response to an order book growing from £586m in H1'22 to the current £781m and a pipeline in excess of £1bn, electrical and mechanical contractr T Clarke has raised £10.7m gross via the issue of new shares at 122p. The funds will be deployed to deliver identified contract opportunites in London as well as strengthening the balance sheet.
The buoyant placing cam just before interim results, which were in line and showed a slight decrease in EBIT profit to £5.7m (£down £0.3m) but with EBIT margin up 0.1% to 2.8%.
This year will be a stub year (Cenkos eps: 17.4p ) before a surge to 24.2p and 27.1p.
T Clarke's markets are resilient with growth hot spots in government-backed infrastructure such as new hospitals, data centres and the move to net zero (driving office fit-outs) and with the prospective PE for next year dropping to just 4.8 and the dividend yield a useful 4.6% (5.9p forecast), I am a buyer."
Here's his commentary from yesterday afternoon:
"I've picked up some T Clarke CTO.
It looks mighty cheap! A forward PE of just 6. A peg of just 0.3 and a dividend of nearly 5% ticks a lot of boxes.
It also has major support at 130p. I've been trying to buy it on DMA so I could buy at the sell price but try as I might I couldn't find any sellers which I suppose is a good sign.
I wonder if TCO might get some work in some of these schools that will need work doing that we're all read about this week.
It offers building services across the UK, including schools, residential, hotels etc and offers engineering services and facilities management.
Seems a decent well run company at a great price. Initially targetting a lift back up to 150-160 but it could end up a longer-term hold.
TCO boss Mark Lawrence has been with the company for 37 years, that is some experience!"
This morning on the back of the Midas update. Purchase not showing. Made at 0900 at 134.5
Bit surprised see no upward movement.
Https://www.thisismoney.co.uk/money/investing/article-12375975/MIDAS-SHARE-TIPS-UPDATE-TClarke-versatile-firm-spark-genius.html
Conclusion:
"Midas verdict: Midas recommended TClarke in 2017 when the shares were 76p. By last year, the price had surged to £1.53. Today, they are £1.30. That decline should swiftly reverse. TClarke is known for delivering top-notch work, 90 per cent of its customers come back for more and the recent fundraise highlights management confidence in the future. Existing investors should hold. Newcomers to this business could also find the current price attractive."
The tip for CTO in July's Momentum Investor write-up hasn't been posted here, so here's its concluding summary:
"Order book up £135m
Looking ahead, prospects are rosy with the AGM statement noting that following strong trading in the early months of 2023, the order book has increased from £585m to £720m, covering most of this year's forecasts right through to 2025. As well as data centres it has great prospects in healthcare, ranging from fitting out single MRI rooms to two new hospitals in Bournemouth and Scarborough as the Government's much delayed 40-strong new hospital program swings into action. Even the mature commercial office refurb market is gaining a kicker from legislation to upgrade the energy saving credentials of a building to band E or better before from April 2023 and band B by 2030. Lawrence says the overall bidding pipeline is now over £1 billion and crucially Clarke's capacity investment means it could handle turnover above £700m without recourse to further spend.
With next year's prospective P/E just 6.4 (me - at the then 153p) and underpinned by a useful 3.9% (5.9p forecast) dividend yield, the shares have both short term and longer term potential. I am a buyer."
In addition:
"this month's front-page write-up, mechanical and electrical contractor TClarke, is benefiting from a massive boom in data centre construction. A confluence of factors ranging from growing cloud adoption, the Internet of Things, emerging technologies like AI, big data and blockchain, data compliance (driving demand for its storage) and the roll-out of 5G infrastructure have all led to a steep increase in demand for data centres."
For the record, Cenkos' latest note forecasts 17.4p EPS this year, rising to 24.2p EPS and then 27.1p EPS.
The cash pile is forecast at £9.2m at the end of this year, rising to £11.3m then £16.9m.
And the dividend is 5.9p rising to 6.5p and 7.1p.
They summarise (extracts):
"TClarke Plc
Momentum into H2 and beyond
Following the successful placing, todays interims are in-line with expectations, with revenues at a similar level last year (with significant growth forecast for H2) and an improvement in the margin to 2.8%. The group has excellent revenue visibility and is taking strong growth momentum into H2 and beyond, particularly with contract opportunities in the London region. On a FY24E PE of 5.5x, EV/EBITDA of 2.6x and an attractive 5% yield, we believe the valuation significantly underestimates the ongoing growth potential and quality of earnings. BUY."
" Forecasts: We make no changes to forecasts post our recent upgrades, following the placing. The proceeds of the placing will provide additional resources which will enable the group to capture and deliver identified short- to medium-term attractive contract opportunities in the London business, (which are expected to be margin enhancing). The placing is expected to be significantly accretive to underlying profitability. We forecast an operating margin improvement to 3.2% in FY25E, up from 2.4% in FY23E, with a 2-year CAGR (FY23-25E) in EBITA and EPS of 30% and 25% respectively.
View: In our view, management’s track record of delivery to date of its growth ambitions, which has been achieved without acquisitions or fully supportive endmarkets has been excellent. The recent placing will allow another step change in the growth profile of the business, whilst also (and importantly) improving the quality of its earnings. There looks to be significant opportunities ahead, backed up by supportive end markets, such as government backed investment in infrastructure, the move to net zero and the significant expansion in the Data Centre market. On this basis, TClarke looks very well positioned to benefit and we retain our BUY."
Wow, those directors are doing ok. Why does ST never mention stuff like that.
Simon still a supporter.
https://www.investorschronicle.co.uk/ideas/2023/07/14/tclarke-s-order-book-goes-from-strength-to-strength/
GLA
A concern flagged by an article on Stockopedia by Mark Simpson;
In total, the board paid themselves £4.6m last year. Given that Profit Before Tax was just £10.3m. If they paid themselves half this figure, then PBT would have been 22% higher. 2022 was a good year, and the remuneration report makes it clear that the bonus payments reflect that. However, PBT rose by £2.5m vs the year before, and board pay rose by £1.6m. Meaning directors took home 40% of all of the additional profits in pay.
With this remuneration structure, it is unsurprising that directors are not big holders of the equity. Each holds less than 1% of the shares, meaning the incentive to restrain board pay may not be present in the future either.
So despite the strong metrics, investors need to take a view on how much of any future returns will actually accrue to shareholders before investing.
Half year results are due out tomorrow, hopefully that will give this a nice tick up. The amount of large projects won in the last few months alone shows how well they are doing.
Agreed. Very surprised at the initial 12% drop this morning, but I suppose that’s going to happen if we’ve sold at a discounted rate to Cenkos. Nice to see that the SP is already bouncing back though.
The 6/12 statement due soon will see a big uplift in the SP. I’ve topped up heavily at 131 earlier. Should hopefully be about 160 leading up to ex divi imo. Gla
As regards today's trading update, the core business is going great guns and needs funding to finance the growth. Fine. But the discount to the share price in the accompanying placing is too great to stomach easily. Let's hope those who didn't get enough stock due to the oversubscription come into the market to buy up stock.
Prospects look terrific with, as Cenkos state, "government backed investment in infrastructure, the move to net zero and the significant expansion in the Data Centre market)" plus healthcare and the move to smart buildings generally.
Cenkos conclude today:
"TClarke has announced an oversubscribed placing to raise £10.7m (gross) at an issue price of 122p. The funds will be deployed to capture and deliver identified contract opportunities in the London region, alongside strengthening the balance sheet. These new contract opportunities are expected to materially enhance profitability, with higher operating margins reflecting the benefits from enhanced economies of scale. On our revised forecasts, the group is trading on a FY24E PE of 6x and an EV/EBITDA of 2.7x. We believe this looks a very attractive entry point, with the 4.5% dividend yield providing an additional underpin. BUY"
"View and current trading:
Alongside today’s placing announcement, the group has confirmed that trading since the last update (10 May 2023) has continued to be strong, with the order book increasing to £781m, a sharp uplift to the FY22A position of £585m. It is also £4.5m cash positive as at 30 June 2023. There has been a step change in the growth of this business in recent years (with a record year of growth delivered in FY22) it has deep relationships with its client base (90% of its contracts are with repeat clients and (or) principal contractors) and the order book provides the group with excellent visibility. BUY"
The RSI, relative strength indicator is above 50, on both the weekly and daily chart , indicating a strong uptrend. Weekly Bollinger bands are separating , indicating a fast sp, movement. The sp, has yet to overcome the previous peak, at the current price. If it does rise further, there is a major falling, bear trendline to overcome at 160. Unfortunately there's is a lot of overhead supply at 160, as well, which would have to be similarly overcome, for further progress.
As usual with this share - a pathetic response from the market and not sure it will climb much higher in the next few days. Might even fall and just because it is a smallcap. Why don't the large share holders step in to give it a boost.
Scintillating results....does not come much better than that....huge future.....and so cheaply rated....expecting a big rerate....
Great results from CTO this morning, putting the company on a PE of 7.4%. Dirt cheap
Fill your boots.
I agree idad.
PBT has increased from 6.7 mill to 10 mill and plenty of cash which puts it on a prospective PE of 5. 5. Absolutely ridiculous and just because it is a small Aim share. Should be at least twice the price it is.
Solid update today. Looks bargain at this price. 180p looks possible this calender year. And always possibility of bid from Regent Gas to offer even more spice to potential upside move.
Captain Birdseye!!!
Just general scary market sentiment for all in construction and building services. CTO cannot buck the markets! Nothing more than that methinks! Capt Birdseye!!!
Any idea why the SP is currently down 7.5%?
Great AGM statement today forecasting EPS of 21p, giving an SP of 6.9.
Dirt cheap for such a quality company.
Surely the SP will take off this am.