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The biggish (84762) buy this morning was me, no agenda other than a long term hold.
Just the summary from today's Cenkos note - they say RAI look "significantly undervalued"
"RA International Group Plc
Contract win and confident trading update
RA International has announced a new contract win and FY19 trading update. RA has been awarded the second phase of a contract with Cherokee Nation Mechanical LLC, working on behalf of the US Department of State and the Bureau of Overseas Buildings Operations. This second phase of the contract, worth US$9.1m, will see RA providing construction services at a US Embassy in East Africa and should complete by end 2020. We estimate revenue of US$37m plus will be delivered during H2/19 with RA confirming FY19 revenue is expected to be slightly ahead of expectations with profitability broadly in line. This represents a very strong H2/19 performance (over 60% FY19 revenue) with contracts delivered over all service channels.
? New second phase contract with Cherokee Nation Mechanical LLC. The US$9.1m second phase of the contract with Cherokee Nation Mechanical will involve RA providing a variety of upgrade and refurbishment works at an East African US Embassy. This continues and increases the amount of support work RA provides for the US Government. The first phase of this contract, already underway, is anticipated to be substantially complete by 31 December 2019. Phase 2, announced today, is expected to complete by end December 2020.
? Robust trading update with confident outlook. Since admission to AIM in June 2018, RA has increased its focus on customer diversification and broadening its geographic spread, as well as bidding on larger, longer duration contracts. Success from this has been clearly demonstrated with the number of contract awards throughout 2019. With successful delivery of contracts across all service channels throughout H2/19 RA expects FY19 revenue to be slightly ahead of expectation with profitability broadly in line. We have therefore left current forecasts unchanged with our FY19E revenue forecast of US$60.2m.
The current order book is US$148m, with US$55m contracted to be delivered in 2020, representing over 83% of our current 2020 revenue forecast and giving confidence in the outlook for 2020.
The shares trade at a FY19E PER of just 6.1x and EV/EBITDA of 3.3x, falling to 5.8x and 2.6x 2020E respectively, and look significantly undervalued. The 2019E prospective yield is 3.4%, covered 4.7x."
£59m NAV with no debt at last results, single digit PE ratio, backlog for next year already at last year's revenue implying 20-30% growth. What's not to like?
I topped up with a few more first thing.
Liberum have reiterated their prior forecasts, i.e 8c EPS - or 6p EPS. The dividend is also reiterated at 1.7c.
The coming year's forecast is 8.5c, or 6.4p EPS, with a 2.1c dividend.
The slight miss in profit expectations (the clue is in the "broadly"!) is outweighed by (1) today's news of a $9.1m contract win, (2) the high contract backlog which is well up on last year (though down on the interims), and (3) the general tone of confidence and optimism.
Great to see the CFO buying around £64,000 of stock - most unusual to see a CFO buying that much on his own.
Perhaps RAI are finally on the way to achieving one of those "transformational" contracts:
https://www.investegate.co.uk/ra-intnl-group-plc--rai-/rns/director-pdmr-shareholding/201912061341150900W/
Topped up at 34.9. Fallen today, and I see no good reason, except possibly manipulation to build a stake by an institution. Interestly this morning someone sold 100k shares, and 30 secs later there was a 200k buy at just 0.7% above the sell: rather than the stated 6% spread. A technique to cheapen your buy price?? Risky if so. Price has continued on down: they were at 36.3ish. Lucky me?
I like this for the reasons others have stated, for the short term. In the longer term I wonder if it may spread into set up for solar pv in the deserts, and maybe wind and even geothermal. Logic says that will happen (!!!) so it might eventually, and if it does it could be on a vast scale. Makes me wonder how to get into set up for offshore wind.
Cenkos have left their forecasts unchanged post-interims and "remain confident" in them:
this year : 8c EPS, 1.7c dividend, $31.5m net cash
next year : 8.5c EPS, 2.1c dividend, $36.8m net cash
Here's a couple of extracts:
"This morning, RA International announced interim results for the period to 30 June 2019. During the period RA secured over US$65m new contracts and further diversified its revenues geographically and by customer. The contracted order book is now over US$166m, up c40% since December 2018. As indicated in the trading statement on 24 June 2019, both revenue and profitability for FY19 will be H2/19 weighted.
With RA seeing increasing numbers of Supply contracts as well as several longer-term contracts starting in H2/19, we remain confident in our FY19 forecast."
"Outlook & forecasts. RA has focused on customer diversification and increasing
geographic spread, as well as bidding on larger, longer duration contracts in the
period. Success from this has been clearly shown with the number of contract
awards over recent months, with most commencing during H2/19. We have left our
forecasts unchanged with our FY19E revenue forecast of US$60.2m representing 36% of the current contracted revenue backlog (cUS$166m) and good revenue visibility for H2/19.
We forecast FY19E net cash of US$31.6m, c32% of the current market cap. The shares trade at a FY19E PER of 7.1x and EV/EBITDA of 4.1x, falling to 6.7x and 3.3x 2020E respectively. 2019E prospective yield is 2.8%, covered 4.7x."
Coldly worded results..
Fairly sure they have mates buying here.
Did I read they have tendered for four separate 'company maker' contracts way above their usual $10m average?
There's no freefloat here really. . Plenty cash and quite a niche market in which they're well established.
The world isn't getting any saner it's nice to see an investment which allows you to almost bank on Chaos.
(When the SP goes up of course.. :))
Bounced nicely though.
Gla.
phew, lucky escape, sold out on the recent trading update with a gut feel something wasn't right
Revenue down 12%
EPS down 75%
Profit down 40%
Second half weighting 'should lead to the Group meeting turnover expectations in 2019 while profitability is projected to be broadly in line with expectations'.
Overall, very disappointing, even with $166m revenues contracted.
RA International were tipped on IG TV last Monday. https://www.youtube.com/watch?v=CsM0t-ZvIBc&t=52s
There is a detailed report on RA International's recent AGM which can be found in our members area here: https://sharesoc.ning.com/xn/detail/6389471:Comment:53189
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looks good
Excellent - another decent-sized contract win to benefit both this this and next year. This year is looking increasingly good.
And the award of a larger contract from an existing customer is validation of RAI's quality of performance:
Https://uk.advfn.com/stock-market/london/ra-RAI/share-news/RA-International-Group-PLC-RA-International-Awarde/80237960
"RA International Awarded New Supply Contract
RA International Group PLC (AIM: RAI), a leading provider of services to remote locations in Africa and the Middle East, has been awarded a new contract by a global humanitarian organisation to supply and install modified shipping containers as accommodation and offices in an East African country.
RA's services are required to upgrade the security of existing accommodation and office units from prefab units to steel containers with overhead protection. This contract award follows smaller similar projects undertaken for the same client.
The contract will run for one year, commencing immediately, and is valued at USD 7.8 million.
Soraya Narfeldt, CEO of RA International, commented: "We are delighted to have been selected for this contract, which was awarded to us based on our track record for reliability, expertise on the ground and capability to deliver quality service on time."
Cenkos have released a new Buy note. They forecast 8c EPS this year, i.e 6.3p EPS, with a 1.7c dividend, and summarise as follows:
"Strong operational progress building momentum.
RA has now announced five substantial contracts of varying durations since March 2019, with a combined value in excess of US$38m, including a US$9.8m 5-year contract with UNSOS (UN Somalia) to provide first line vehicle maintenance services throughout Somalia, a contract with Facilities Development Corporation (FDC) for construction works at the US Embassy in Copenhagen (value undisclosed), an MSA with IAP Worldwide Services Inc to provide supply chain services on a global basis (with the first contract of up to US$8.5m in sub-Saharan Africa to run until 2023), a US$10.7m construction project for a large humanitarian client in Central Africa and the new US$9m contract announced today.
RA remains very active with its bidding pipeline, including two substantial, potentially transformational bids in the current year (one submitted already – not in or current forecasts).
Outlook & forecasts.
We have left forecasts unchanged. Our FY19 revenue forecast of US$60.2m is now less than 40% of the current contracted revenue backlog (over US$150). In the last two years, FY revenues have been c47% of the contracted revenue backlog. We expect to see this pattern continue as RA adds larger and longer duration contracts.
The shares trade at a FY19E PER of 7.6x and EV/EBITDA of 4.6x, falling to 7.3x and 3.7x 2020E respectively. Net cash forecasts for FY19E and FY20E represent c30% and c35% of the market cap respectively. The 2019E prospective yield is 2.7%, covered 4.8x."
I bought some of these first thing this morning. Good news this morning from the contract win and trading update, plus.....
Very cheap fundamentals, large cash pile, "encouraging" trading this year to date, confidence in delivering expectations this year (albeit with an H2 weighting), likely RNS's of large contract wins to come.....
Very surprised not many have noticed this one if I’m honest. Over 80% shares not in free float $28 million in cash last 2 contracts worth over $20 million. Also back log order book $120 million. I’m expecting more contracts to come this could be massive imo if volume hits this will fly. So off the radar atm
Came across this stock in the Master Investor magazine last weekend.
Did quite a lot of reading around it. The Share Price seems completely out of sync with their performance. I imagine this reflects some uncertainty around them being a recent IPO.
CEO has been there 17 years though and built RAI from the ground up. It seems this has given them a solid reputation within their niche from which to grow into adjacent sectors.
In terms of value, we can expect them to deliver at very worst £10m in earnings in 2019. That puts RAI at about 7x earnings (Market Cap being about £70m at 41p). In reality, they are expecting growth and so it could be a fair bit higher.
I see this could re-rate to 60p on no news (just to reflect current performance) and as high as 80p with reports of positive progress.
With £28m in cash and an order backlog of about £120m I just don't see why the SP is where it is.
I saw this dropped from about 65p to 40p in a matter of weeks at the end of last year, thinking it could re-rate at a similar pace.
What do you reckon, Blue? Market seems undecided.
Revenue +7%
EPS - 20%
Maiden divi @1p
Holds c$28m cash
(broker forecasts however, have been lowered. Is this to allow future 'beats'?)
Let's hope the results are good here !!!
Results are now due in a week. There is very little to go on here due to the flotation being so recent, but the interims gave EPS of 2.6 and an indicative PER is 8.5. Helpfully the company still has much of the cash raised at flotation. Is there value here at this price? (Beware the silly spread!)
The share price is looking cheap but we could do with some news
All buys again today. Nudging up slowly. More of the same agin tomorrow please !
wow, talk about set up, buys all day, SP stuck = seller in the market
expect pull back
Company looks interesting though