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RAI is during the share buy back programme. Can someone try to explain me who the hell publish major new contract award in the middle of share buy back programme???
@Franco, RNS will be released if they hold any market sensitive information and needs to be in public. If they have won the contract or lost the contract should be informed to the shareholdrs within some number of hours. Otherwise, they will be voilating the regulartory rules. If its still in progress, they don't need to publish.
About announcing during the buy back programme, isn't good for LTH? New contract definetly pushes the price up.
To be fair I never heard about RAI and made quick research first thing on the morning when RNS published. This is healthy company with good profit and pays dividend higher every year. We are also in middle of share buyback programme. I see this company will be approaching 1 GBP later this year. Asking myself how did I miss this one here? Where is the catch?
It looks like RAI is really safe heaven with good forecast. I also think that market did not 'consumed' the today's RNS yet. We may wait until Monday for 0.70+ sp.
My 9 Feb summary is still relevant should you care to read...
@cautionyourblast you can add some more 'Pros' now. Please update!
Posting for others what @cautionyourblast's summary from Feb 9th. Good one cautionyourblast.
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This is a fascinating one I bought last week: these are some very high level notes - some of which is obvious stuff. Market cap GBP69m, 2,000 employees.
79% owned by wife (CEO) and husband (COO) team. It does construction, facilities and supply chain & logistics mgmt in places such as South Sudan, Somalia, Mozambique and the CAR, also a bit of middle east. So it looks like "barge pole" material, but...
Pros
1. Founded 2004 and has geographical diversity in its projects and is expanding its regions and countries.
2. The management team are ex-NGOs and international development bodies. I suspect this is their life's work. They take modest salaries for directors of a listed company.
3. Barriers to entry in the areas they operate are very high - great as competition for tenders (especially by experienced parties with a proven track record) will be low. Presentation says competition is much larger companies who bid much higher prices.
4. Clients include the US & UK govts, aid agencies (eg UN), NGOs and corporates. High quality counterparts - credit risk managed.
5. Listed for about 18 months, now have liquidity and structure which allows them to tender for bigger projects.
6. Significantly growing their "revenue backlog": It's USD166m at last report, up from USD119m. This is their pipeline. Quite how scientific this is, I am still trying to ascertain.
7. Targeting bigger, longer term contracts with services revenues.
8. Prior year PE is 6. Very low for a growing company with a cash pile an a decent contract pipeline.
9. Cash pile at 31 Dec 18, USD26m (29% of market cap).
10. Dividend yield 2.5% more than three times covered. Expected to increase.
11. CFO bought GBP60k's worth in Dec 2019.
12. Price/NTAV = 1.5.
13. Revenue growing.
14. Institutional shareholders are in (despite the huge ownership by management.
15. Management highly aligned with other shareholders, but see A below.
16. Take sustainability and integrity seriously. Good... and also, this will be good for winning tenders too.
Cons
A. No control at all by IIs/PIs given founders own 79%.
B. Key man risk on founders.
C. Geographies in which they operate, but they are diversified.
D. Potentially lumpy contract awards and potential delays could make for lumpy revenues and volatile earnings.
E. Interims showed margin under a little pressure, but recent update suggest revenue marginally ahead for 2019 and earnings "broadly in line" with expectation.
F. Share liquidity given tightly held.
Surely they'll plan to grow it and sell it?
Constructive thoughts most welcome.
Thank you, parm!
...and this company pays dividend. Last year 1p per share, this 1.25p.
Polinvest _ I was in same boat as you, saw the RNS and jumped in with minimal research but saw what I liked but the more I see and find out the more I like this one.
Barchart gives 100% Buy. Will see today. I expect this will fly on Monday..