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Started: Spinal_Tap, 28 May 2024 08:46
Last post: Spinal_Tap, 28 May 2024 08:46
Net cash of £22m. Market cap is only £29m.
Started: EquityDevelopmen, 16 Apr 2024 08:01
Last post: EquityDevelopmen, 16 Apr 2024 08:01
The results for the six-months to January are robust against a backdrop of declining confidence in both clients and candidates generally. With an improvement in the contract book during early Q3 we think this highlights that the tide is starting to turn and likely to feed through to demand for permanent hires ahead of the CY24 end. With net cash accounting for over 70% of the current market capitalisation, the operating business appears undervalued.
H1 results were broadly in line with expectations, as declining economic confidence reduced NFI by 12.8% yoy, with the UK down 10%. The decline in perm activity was largely responsible for the shortfall, with contract activity remaining robust during the period. Adjusted PBT improved modestly and adj. EPS was unchanged yoy at 1.6p.
Costs have reduced further, although Management continues to add headcount in its core areas of focus and strength. Also several new contracts/renewals were awarded during the period: these are likely to benefit H2 onwards and reflect a resurgent Business Development team.
We have taken a more conservative view of the outlook, reducing FY24 estimates in line with new guidance, albeit still anticipating meaningful growth in activity levels. The operating business excluding the net cash is valued at just £10.5m which seems too low given our EBIT forecasts. As such, we set a fair value of 140p / share.
Link to research report: https://www.equitydevelopment.co.uk/research/trading-report-in-line-with-sector-peers
Started: EquityDevelopmen, 15 Feb 2024 08:32
Last post: Trendz, 15 Feb 2024 10:09
Obviously a challenging market but looking at the big picture, management have managed to turn around years of heavy loss making. Balance sheet is strong. This is already at bargain basement valuation and is an easy hold for the ongoing recovery. Technical uptrend too. Trendz
Queue the equity development fair valuations. Glad I took advantage of yesterday's pump (aka manipulation) to dump half of my holding at 122p. These fair valuations spouted for years by these pen pushers are meaningless.
As I have said before the prices for GATC as long as it stays above 95p are 114, 125, 152
We are encouraged by several aspects of the pre-close trading update covering H1, not least the outcome and movement in net cash. A renewed focus on the cost base should result in improving conversion rates, offsetting any further shortfall in fee income during H2. We also remain confident that a recovery in Gattaca’s markets should emerge during Q4 ‘24/early FY25 supporting a further re-rating of its shares.
The yoy shortfall in NFI of 16% during H1 includes a large RPO contract which ended in September. The H2 ‘23/H1 ’24 comparison is as a result more favourable, with the larger contract included for just two months of the former period, with fee income down 8.6%. Overall, contract NFI was more stable, declining 6% yoy, compared to 38% in perm.
H2 ’24 onwards will witness a greater focus on productivity, resulting in outgoing sales heads in the business not being replaced and further room for cost cutting within perm focused employees. Over the medium term, we expect administration headcount as a proportion of total heads to move towards best industry practice of c.25%, down from the current 32%.
Should we be proved correct on expecting a recovery in the Group’s markets then the current valuation appears too low. Based on a DCF model we retain our fair value / share at 175p.
New research report here: https://www.equitydevelopment.co.uk/research/profit-expectations-maintained
Started: contrarian123, 19 Aug 2023 10:38
Last post: neil777, 25 Jan 2024 07:38
HE1 HIT HELIUM AND HYDROGEN [SEE RNS BELOW]
GET IN QUICKLY.. SHOULD DO 200% PLUS
https://www.lse.co.uk/rns/itumbula-west-1-well-has-successfully-reached-td-vmkkvswza9v67ua.html
152p is the next target. Finally Gattaca is re-rating. Buybacks are supportive of this.
Held the point of control at 114-115 and now seems to be moving up again. Surprised no buyers here yet
Motoring along quite nicely - target on track
Nice bullish close to my first target mentioned below at 114p. We have had a close above the declining trend line since Apr 23. If the action continues next target 152p
Started: Trendz, 15 Nov 2023 13:24
Last post: Trendz, 15 Nov 2023 13:24
Ready to explode. Surely such a ludicrous valuation can't exist in a bull market. If this is indeed the end of the bear market, we could be looking a major AND fast rerate. GLA
Started: EquityDevelopmen, 25 Oct 2023 15:04
Last post: EquityDevelopmen, 25 Oct 2023 15:04
For anyone who missed yesterday's webinar live, here is the recording of CEO and CFO covering FY results / strategic progress / outlook, then taking broad range of questions from private investors. 50 mins running time, click here to see full video:
https://www.equitydevelopment.co.uk/research/gattaca-investor-presentation-fy-results-october-2023
Started: EquityDevelopmen, 24 Oct 2023 07:46
Last post: EquityDevelopmen, 24 Oct 2023 07:46
The implementation of the ‘four pillars’ of Gattaca’s new strategy resulted in adj. EBIT rising significantly, as did conversion rates too (up to 5.4% vs 0.2%). Impressively, this was achieved despite the Group’s markets turning more challenging during H2. NFI fell by 8.5% yoy, down by 1.8% in FY23, with a targeted exiting of lower margin contracts a factor.
Progress has been driven by self-help: on cost control, marketing, an improved culture, exiting low margin contracts and improved productivity levels. We think there is more to come as the new hires bear fruit and additional cost savings emerge (particularly in property).
Looking ahead there should be some recovery visible in recruitment markets over the next 12 months and at Gattaca we expect further improvement in the conversion rate. The £23.4m net cash at year-end also opens up many opportunities for the Group.
Based on a discounted cash flow model we raise our Fair Value to 175p per share.
Link to research note & audio summary: https://www.equitydevelopment.co.uk/research/robust-foundations-in-place
Started: EquityDevelopmen, 16 Oct 2023 11:26
Last post: EquityDevelopmen, 16 Oct 2023 11:26
Gattaca plc, the specialist staffing business, will be conducting a live presentation following the release of their Preliminary Results for the year ended 31st July 2023.
The event will take place at 11.15am on Tuesday 24th October.
The online presentation will be hosted by Matthew Wragg (Chief Executive Officer) and Oliver Whittaker (Chief Financial Officer) and is open to all existing & potential shareholders. Questions can be submitted during the presentation and will be addressed at the end.
Link to register: https://www.equitydevelopment.co.uk/news-and-events/gattaca-investor-presentation-24october2023
Started: Trendz, 16 Aug 2023 07:32
Last post: monet2, 17 Aug 2023 16:12
Fair value per share now seen at 125p/share. You can read the full note here, free access: https://www.equitydevelopment.co.uk/research/eps-cashflow-beats-plus-dividend-reinstatement
Agreed : much more positive FY update today than most others in sector: continuing NFI seen just 1% lower at £43.6m and expected FY23 PBT above expectations at £2.5m; outlook is realistic but confident.
Net cash of £21m at 31 July y/e allows plans for 2.5p final div, 2.5p special div, and new £0.5m share buy-back
Encouraging progress
Ahead of expectations on all fronts. Tasty 5p dividend and share buyback to boot. Superb cash pile too
Started: EquityDevelopmen, 3 Apr 2023 10:20
Last post: boombag, 9 Aug 2023 19:10
Rated one of the best shares by a top trader
worth keeping eye on
New research report (free & accessible): https://www.equitydevelopment.co.uk/research/well-placed-to-weather-even-the-harshest-of-storms
Gattaca reported in line H1’23 results (6M ending Jan’23). Underlying NFI climbed +5.2% to £22.7m (£21.6m LY) thanks to two new client wins and strategic price initiatives (+9% contract & 6% perm).
On top, there were standout performances (see note) from defence (+32%), energy (20%) and infrastructure (7%) - partly offset by the shedding of low margin business (2 large accounts) and a not surprisingly less buoyant TMT backdrop (-43.5%, tough YoY comps). We believe the group remains on track to achieve both its ongoing turnaround and longer-term targets, after raising fee earner productivity (+14% revs/head), employee engagement and EBIT/NFI margins to +4.2% (-0.5% LY). This has delivered an H1’23 adjusted PBT and diluted EPS of £0.9m (-£0.3m LY) & 2.0p (-0.8p) respectively.
Despite the economic conditions, we’ve held our conservative FY’23 and FY’24 PBT forecasts at £1.8m (£256k LY) and £4.25m respectively on NFI up 5.3% (£46.5m) and 8.9% (£50.6m), along with reiterating the valuation of 130p/share.
Started: ragingcow38, 10 Feb 2023 08:02
Last post: TheThinker, 20 Feb 2023 17:24
@ragingcow38. Having been burnt by tipsters early in my investing life, I decided to track ST's weekly 'buy' predictions from 7 Oct 2022 till 2 Dec 2022 (4 editions). This was to assess the validity of his claims being new to IC. I created a spreadsheet which would compare the original price at the time of tip with the current bid price. This amounted to 52 shares. As of today, the average % increase was 10.25% (inflation matching). The biggest riser was CMCX (CMC Markets) at 140%. The worst performer was CML (CML Microsystems) at -42%. I also created a virtual portfolio investing 2k in each. I would have been 10.6k up on a portfolio of 64k over this period. 33 out of 52 plays are in profit. Not bad and certainly would have paid for the subscription. Nobody can get it right all the time but I was quite impressed. This was only over a short window of time and whether another window would be as impressive remains to be seen. As ever, take the time to do your own research and back up with multiple signals. There is froth in the system when IC announces a 'buy' as PIs pile in so timing of the trade is essential. Good Luck. TT
some great advice there for newbies there Toad especially the last 2 lines seen that many times. Not in myself but was watching as a previous winner, I've noted Stockopedia mentioning the demise here and wondering if the management simply aren't very good as other recruiters like STEM have done well. All I've seen of ST recent tips have been pretty poor, PTRO was one
I've taken the opportunity offload with a few quid banked. Been in and out from the listing, had some great returns early on but it went "tits up " when original launch team was broken up. GLA. K
Thank you for your time and effort here.
A mixed bag is the answer. Obviously a lot of lazy money follows him so as you have seen today with GATC this chases the price and the MM are only too happy to see the action. ST pushes so may shares its bound to be a mixed bag. He is tasked by IC to unearth hidden value but the market already does that! One of his long term absolutely cast iron recommends was for INL - year after year and in the past two few its gone from 80p to sub 20. I am not saying he does not get some right and he is careful to show YoY that he beats the market. But as with all investing it pays to do your own research. Also remember that if you do want to buy a recommended share, wait a bit, the froth often comes off in the subsequent days and weeks.
Started: EquityDevelopmen, 15 Feb 2023 07:58
Last post: Trendz, 15 Feb 2023 12:48
Unwarranted IMO. Revenues growing. £21m cash. £25m market cap. So the company's value is 84% underpinned by cash?! No wonder this was in the 2023 bargain shares list.
going down today IMHO
A solid trading update from GATC with H1’23 LFL NFI growth of 5.1% to £22.7m and encouragingly cashflow was strong too.
Equity Development trims PBT forecasts but see a Fair Value of 130p/share vs 90p last close.
New research note is freely available here:
https://www.equitydevelopment.co.uk/research/strong-cashflow-coupled-with-solid-top-line-growth
Had hoped we'd have seen some upward movement in the SP by now.
We can hope someone snaps them up at this low level. They have a good core business with a great customer base. Just need some decent management, it hasn't been right since Wilkinson's I'll fated international expansion. K
Started: EquityDevelopmen, 3 Nov 2022 07:50
Last post: Kenswayken, 6 Nov 2022 17:56
Tame advisors, usually 50% below their indication. K
Is it me or is EquityDevelopment just a posh outfit for ramping up beaten down stocks? Your equity valuations in this swell as others you cover are and have been way off
It’s taken a long time to recover from Wilkinson’s ill advised international expansion. Obviously COVID didn’t help but other recruiters have done much better. K
These are cheap. Performance is fine and share prices will catch up
There are many challenges facing the UK economy, but a company that we think is ahead of the recovery curve is STEM recruiter Gattaca - having already ‘cut its cloth’ over the past 2 years. Plus, the UK job market still remains the tightest it’s been for years, with 1 vacancy for every unemployed person – particularly across their sweet spot of ‘difficult-to-find’ engineers and technologists, where widespread shortages exist.
At today’s FY’22 results, the group posted in line numbers, with adjusted PBT coming in at £0.3m on NFI up +5% to £44.1m. It also added that “demand is robust” which - alongside further self-help measures, favourable mix & an industry shift towards using more contractors vs permanent placements (re: austerity) - is expected to lift FY’23 underlying PBT to £2.5m with profits being H2 weighted. The dividend has been prudently suspended, whilst the balance sheet remains rock solid, sporting net funds of £16m (or 49p/share) as at Jul’22, after generating strong H2’22 cashflow.
It was tempting to upgrade our modest FY23 forecasts & 160p/share fair value, but we prefer to conservatively retain both pending December’s AGM trading update. Nonetheless, we note the stock at 80p trades below NTAV (86.5p/share) and on a 0.4x EV/NFI multiple vs peers at >1.0x.
Link to note: https://www.equitydevelopment.co.uk/research/engineering-a-lasting-turnaround
Started: EquityDevelopmen, 22 Aug 2022 09:10
Last post: Kenswayken, 22 Aug 2022 18:41
Back in March you said Fair Value £1.45, now 75p so can we assume 80p on your £1.60 valuation?
An in-line trading update was a good start for the new CEO and CFO, and Equity Development raises its fair value/share to 160p on the back of better than expected net funds.
That new research note is freely accessible here: https://www.equitydevelopment.co.uk/research/first-corner-turned
Started: ragingcow38, 17 Aug 2022 08:30
Last post: ragingcow38, 17 Aug 2022 08:30
In line...Lost three clients but the numbers look promising as a recovery.
Started: Kenswayken, 3 Aug 2022 14:10
Last post: Antanatar, 16 Aug 2022 16:55
According to my source the MOD business is still retained.... no other large accounts have been lost
Hearing a very large account has been lost.
Their largest account is the MOD, bit of a shocker if they lose that. K
Started: Kenswayken, 29 Jul 2022 15:54
Last post: Kenswayken, 29 Jul 2022 15:54
Another disappointing drop in SP.
Any info as to why?
Started: Kenswayken, 8 Jul 2022 10:08
Last post: Kenswayken, 8 Jul 2022 10:08
There is life after all, up 18% this morning.! K
Started: Kenswayken, 23 Jun 2022 17:15
Last post: Cashola, 29 Jun 2022 11:59
It's not 'like a nightmare', it is a nightmare. Does the company at least generate some income by giving the staffers a job???
West6809. Hopefully someone comes along and buys them . Word from inside, a very unhappy ship with low morale. Rapid international expansion by Wilkinson whilst losing several big hitters, then retrenchment ( ongoing ) . Those departed big hitters, start new businesses or go to competitors and take some clients with them then poach good staff .. Pretty grim . K
Same Kenswayken. What baffles me even more is the lack of updates and even worse, the last set of results. Whilst other recruiters were booming, Gattaca was doing poorly. Let’s hope they’ve turbo charged the engines and have performed well since. They really should have given the recruitment surge. GLA.
Skills in short supply so most Recruiters doing well. GATC is a specialist engineering sector recruiter with strong business in Aerospace,Marine, Automotive and Rail, big in defence too.
Baffles me why they haven't ticked up. K
Started: EquityDevelopmen, 31 Mar 2022 08:47
Last post: Kenswayken, 25 Apr 2022 15:18
I wonder if EquityDevelipments might want to reconsider their £1 45 fair value for this dog.
Hope so, it should be doing much better in this recruitment environment. K
Gattaca is the UK's largest specialist engineering/tech recruitment agency. Its shares have fallen >70% (vs c. -25% sector) from their 52 week high of 285p - principally due to January’s profit warning. There is work to be done, but even so we believe the scale of the sell-off looks totally disproportionate to the issues involved (Re temporary disruption from a major IT system implementation, staff turnover/culture, etc).
Following the recent appointment of Matthew Wragg as CEO - a highly capable & experienced industry professional with ‘sales’ running through his veins - the early signs of a successful turnaround are tentatively taking shape, with productivity levels inching up anecdotally MoM since January. Furthermore the company is “seeing encouraging trends across many of its sectors”.
We have pencilled in FY23 PBT of £2.5m on NFI of £49.1m with a 145p/share fair value, albeit these estimates are prudent, and we would ultimately hope to upgrade as key milestones are met. Similarly, we assume the FY22 dividend will be temporarily suspended, leaving net funds (pre IFRS16) of £5.0m as at Jul’22 (excluding £10.4m of non-recourse finance).
https://www.equitydevelopment.co.uk/research/the-shares-appear-oversold
Started: SkipJackTuna, 31 Mar 2022 08:41
Last post: SkipJackTuna, 31 Mar 2022 08:41
Investing today for a steady recovery.
Started: Kenswayken, 15 Mar 2022 08:45
Last post: Kenswayken, 18 Mar 2022 11:40
Who knows, we said that about the previous two.
I'd have hoped they would have been bought by now being so cheap. They have a good business in some engineering sectors. K
Give the guy a chance. The cards are in his favour. Can't do any worse than the incumbent. Can he? :/
New CEO is an Insider who has been doing "Special Projects" and is a bit wet by all accounts.
CEO & CFO exiting Gattaca!
The company has gone rapidly backwards under their stewardship so no tears here. K
Started: SkipJackTuna, 2 Feb 2022 14:03
Last post: Kenswayken, 9 Feb 2022 15:52
Back in 2015 it was over £6 then changed CEO who messed it up then changed CEO who further messed it up and seems unable to get on top of the issues. Only hope is that some bigger fish makes a play for it .
They have a strong position in Defence , Aerospace, Marine Automotive engineering so should be doing much better in current market.
must be a large background buyer bought some of these yesterday and just now just below 100p Recent drop was well overdone GLA
Recruitment market doing well. Coming out of covid globally. Things can only improve right?
Started: andsoforth, 18 Jan 2022 07:05
Last post: dsc1978, 1 Feb 2022 14:29
Naked Trader sold it for a loss of 1200 quid.
Naked Trader likes the company. The drop in price is overdone.
It's been rubbish since name change to Gattaca.
Shocking trading update in current market environment! If they can just break even in the strongest recruitment surge in over a generation they are fooked when things revert back to normal demand levels! How can management get this so wrong??
"...anticipates the Company's continuing underlying profit before tax will be significantly below market expectations. This is driven by delayed recovery in our contract business where the improvement in our customer's demand has been slower than expected"
Weak management.