React Group Share Chat (REAT)

Sorry Rivaldo, no. The filed audited accounts to 30 Sept 2025 shows a pre tax loss of £340,000 and a profit of £18,000 the previous year. Hence my concern about the forecast £2.3 Million for the year to 30-9-26.

Hi rivaldo,

what do you consider as fair value here ?

REAT have increased PBT from £0.7m to Sept '22 to £2.0m to Sept '25. PBT is forecast to rise again to £2.2m this year and then £2.8m to Sept '27.

EPS has risen from 3.7p EPS to Sept '22 to 7.6p EPS to Sept '25, and then 8.2p EPS by Sept '27. This against a now 47p share price.

It's the market's fault if it hasn't - yet - recognised the progress that's been made. And therein lies the opportunity for investors entering the fray at this rather undervalued point.

The EPS progress shows that revenue is not being "bought in" without accompanying improvements in profitability or huge share issuances. And net dent remains at very small, manageable levels at £1.5m-£2m. So much so that there may be further earnings-enhancing acquisitions.

Still think the only worthwhile outcome for shareholders is a takeover at circa 75p - £1.

Market clearly doesn't trust the management team. Share price performance is woeful, down over 25% over the last 12 months and down 62% over the last 5 years.

In the last results statements like this don't help:

"Sixth successive year of growth through strong organic performance and strategic acquisitions"

Any business can grow if you keep buying revenue and loading up with debt. The next year is crucial, if management don't deliver they should be replaced.

Looks like my comment about the bounce accelerating is coming to pass :o))

The half year earnings to 30-3-26 due on 25-5-26 will be a make or break one for me.

In the last results presentation of FY2025 on the Investor meet Company platform, management made a big deal of growing EBITDA and almost completely ignored the fact that pre tax profit had moved to a loss (Normalised EPS moved from +0.773p to -0.709p). I asked for an explanation of this and they basically dodged the question.

I also asked about the dramatic improvement in Normalised EPS forecast for FY2026 of 6.2p and for FY 2027 8.23p. Stockopedia show the analyst consensus is made up from just one broker, presumably the company's Broker and NOMAD, Singer Capital Markets. Mark Braund essentially stated it was nothing to do with management. In practice that is surprising and does not inspire confidence. I cannot believe Singer would leave such a forecast out there if the company's management don't believe it is achievable. If it is right, that would be a major achievement and a PE of about 7 and 6 in 2027! Possibly it is an error in Stockopedia's Refinitif data. All very strange.

Any clarification would be much appreciated!

Just to put a bit more meat on the bone here, years ago React acquired Fidelis for a sum amounting to just under 5 million.

According to Rivaldo's post dated 18th Feb 2026 Fidelis is now 4 x the size of it's size at acquisition. Fidelis is only one part of React which is now valued at little more than 11 million in total. What's happened ? Where on earth has the value gone ?

It's time for the management team to start delivering now, if they aren't up to it the bigger shareholders should get new leadership in.

It's all well and good talking about doing free cash flow of 5 million in a couple of years time however the market doesn't seem to believe it, forget buying new businesses and start delivering with the current set up.

The market cap is now little more than 10 million, the share price performance is absolutely woeful.

If the directors really believed in themselves and the business they would be loading up with shares at these prices as if you believe them based on the current market cap this business will be delivering a free cash flow yield of nearly 50% in a couple of years.

Hailesinvestor posts : " The likes of Doak and Dredge don't own many shares. It does concern me".

One of them also doesn't have any thought for shareholders - just for themselves - and could be a fine candidate for a Shakespeare classic - ET TU B......

OSD - speaks from a position of knowledge :)

Apart from Braund there doesn't seem to be a lot of confidence being shown by the management etc, if they genuinely think the shares are massively undervalued you would expect them to be loading up, I know I would be if I was in a well paid role and had access to how the business was performing.

The likes of Doak and Dredge don't own many shares. It does concern me.

Seems an odd one, lots of investors piling in, decent update / outlook yet the share price seems to be frozen around the 50p mark.

I think a takeover seems to be more a matter of when / not if.

What is going on to light the blue touch paper here? Is it going to’just’ be a buy out and we will reap the rewards or will the undervalued nature of business slowly be reflected in an increasing sp

Had a listen to REAT's recent Investor Meet presentation. Very informative - some highlights:

- "we believe we're hugely undervalued"

- "Q1 has started well", REAT are "back into growth mode"

- aim to achieve £5m+ FCF by the end of 2028

- 93% of revenues are recurring

- Fidelis is nearly 4 times the size of when purchased

- 24Hr Aquaflow is "a tremendous business" with cross-sell and margin uplift opportunities, and has launched a new Pump division

- Leverage is currently 1 times debt, and there's headroom for another acquisition, especially given the cash-generative nature of the businesses

- "material" overseas investors have bought in (I assume including ShapeQ Gmbh) after messaging on LinkedIn and presentations

- Project Sparkle now fully embedded and live, with further development likely

- REAT already use AI in sales, in their CRM system, in customer experience and in sentiment analysis

Good to see the well-known small cap investor David Newton turn up here with a 5.76% holding:

Https://uk.advfn.com/stock-market/london/react-REAT/share-news/React-Group-PLC-Holdings-in-Company/97833302

The top shareholders list is now an extremely impressive list of institutions and respected investors for a £12.2m m/cap company, with Dowgate's holding fully taken up - these comprise over 70% of the shares in issue:

Octopus Investments Ltd 5,496,060 23.25 %

Harwood Capital LLP 2,530,000 10.7 %

FundRock Management Company 2,393,176 10.12 %

ShapeQ GmbH 2,250,000 9.519 %

David Newton 1,362,307 5.764 %

ISPartners Investment Solutions AG 1,085,000 4.59 %

Canaccord Genuity Wealth Ltd 900,300 3.809 %

Philippe Hottinguer & Cie Gestion SAS 504,963 2.136 %

Mark Braund 454,807 1.924 %

As a relatively lth ( and a few successful trades), I’ve always hoped for a buy out by one of the big players. A rentokil or similar. It’s the main reason I still hold

Anyone know anything about this ?? Braund was appointed in Jan 2025.

https://open.endole.co.uk/insight/company/12741385-dvorak-bidco-limited

I do wonder if REACT is going to get taken out, German investor announced the other day adds fuel to the fire.

The management at React keep saying they are targeting free cash flow of circa 5 million within a couple of years, if they can achieve that this should be worth 3 x the current valuation, the proof will be in the pudding.

You are correct rivaldo, Dowgate have pretty much disposed of their entire holding.

Been away for 3 weeks on hols, so will comment properly later on the results, which read very pleasantly, particularly the "favourable" outlook for this year to 30th September '26.

Meanwhile, we have three (count 'em!) positive holding RNS's today and yesterday:

- Helium Special Situations have increased to 1,085,000 shares (4.59%) from 725,000

- Octopus Investments have increased to a whopping 23.25% with 5.5m shares (from 20.71%)

- ShapeQ GmbH have bought 9.52%, or 2.25m shares, in one swoop

Helium and ShapeQ's purchases add up to 2.585m shares, which equates to Harwood's holding so we can assume that holding has now been sold.

Perhaps the clearing of this overhang will release the share price.

Shape Q is an "investment company providing patient growth capital into smaller companies all over Europe. It is lead by an experienced team with a strong track record on capital markets":

Https://www.shapeq.de/about-us/

I have started buying into these this week around 52 - 53p, have been watching for a few months however wasn't sure but the holding notifications tipped me over the edge and onto the buy button. Still think the balance sheet needs to be improved so would rather the business allows cash flow to come in for a year or two before making any more acquisitions.

More II buying, that’s 3 notifications in 2 days including Octopus to 23.25% Rivaldo / Monty / Runcie / testpack - thoughts?

Bid incoming

Helium crossing a threshold. REAT has quite a high II holding ratio

20P BY MARRCH - JUST A THOUGHT !!

REAT's results this month will show excellent improvement over the prior year as per the trading statement. And hopefully the outlook will also continue to reflect the "Stronger trading in the final quarter of the year" already outlined.

The m/cap here is just £12.7m, yet REAT are due to report historic adjusted PBT of £2.2m, or 6.7p EPS, rising this year to 30th September to £3.2m, or 9.3p EPS.

Ignore my last post, the 200,000 shares were a transfer rather than a straightforward purchase - serves me right for posting from memory!

Anyway, hopefully the results will show the same confident outlook as the year end trading statement.

Exactly Monty9. And the Chairman's wife bought 200,000 shares at 50p only 3 weeks ago.

This would seem a rather redundant large vote of confidence if trading was not at least in line. Particularly given the "strong" trading in Q4 to the end of September.

Not long to wait for the results as flagged in the "ahead" trading statement anyway.

Agree with all points you make. Indeed, despite showing a 50% loss on my original stake, I added recently. It has always struck me as a well run company with plenty of potential. It does, however, seem to be an extreme case of investors selling small companies unless the results are flawless. In REAT's case I think they suffered in the Pandemic but are now solidly cash positive and profitable.

I think their acquisition strategy could provide great growth potential from here too.

Good to see a move up today.

Thw results out later this month will see 6.7p historic EPS, with forecasts having been raised after strong H2 trading to 30th September per the year end trading statement.

Forecasts for the current year to 30/9/26 were also raised, to 9.3p EPS.

This puts REAT on a ridiculous current year P/E of just 5.4.

The PEG is crazily good value at 0.14.

"So, although the share price is unchanged since the interim results and well below the 77p level at which I suggested buying at the start of the year (‘An underrated microcap on a bargain-basement rating’, IC, 25 January 2025), I can see scope for multiple expansion from a low base. Ahead of annual results in January 2026, the shares rate a recovery buy."

Anyone got the conclusion as it's subscriber-only?

Https://www.investorschronicle.co.uk/content/40178403-fc75-4363-b002-a5068dbdf048

"This unloved services stock has strong recovery potential

Simon Thompson: Shares trade on a PE ratio of 6, even though a high-margin acquisition is performing strongly

• Full-year revenue up 21 per cent to £25mn

• Gross profit increased 40 per cent to £8mn

• Cash profit of at least £3mn, up from £2.5mn in 2024

• 39 per cent EPS growth predicted in 2026 financial year

• Forward price/earnings (PE) ratio of 5.9

React Group (REAT:55p), a cleaning and facilities management services group, has raised earnings guidance after delivering a strong trading performance in the final quarter of its financial year.

The directors are forecasting an annual cash profit of at least £3mn – 7 per cent higher than analysts at joint house broker Dowgate Capital predicted after lowering forecasts by a fifth to £2.8mn at the interim results (‘Exploit this market overreaction’, IC, 27 May 2025)."

And there were 13,000 on the Ask at 57p that have been taken out now. Some nice buying going on.

Good to see three relatively small buys in the last half hour result in a tick up.

REAT were one of two companies featured by Hybridan in their "Takeaway" report to clients on Friday:

"Financial Calendar: Year End September, reported 29 January 2025, Interims March, Reported 27 May 2025

Three Main Shareholders:

Octopus Investments Nominees Ltd 19.36%, Dowgate Wealth 12.48%, Harwood Capital LLP 10.94%

Key Investment Points: Acquisitive & Organic growth, Momentum Building, Strategy

This week’s Trading update for the FY September 2024 from this acquisitive facilities management services provider, reported business is ahead of expectations. Revenue of £25m would be a 21% increase with the EBITDA up 42% from 2024 to £3m. The organic growth momentum is improving and is being accelerated by the elevenmonth contribution from 24hr Aquaflow. The more leaks and floods the better for this commercial drainage and plumbing services business which was acquired for up to £7.4m with cash paid of £4m and supported by a £1.1m placing at 81p.

REACT reported a sequence of contract wins across its four divisions: 1) LaddersFree, a commercial window cleaning business which reported securing national retail accounts with well-known brands including The Works, BP Forecourts, and H&M. 2) Fidelis, a contract cleaning and soft facilities maintenance business and reported several new multi-year contracts with industrial and manufacturing clients including Danatrol, Flexi Coventry, and Haldex. 3) REACT Specialist Cleaning business, which primarily provides emergency and specialist cleaning situations reported new customers including the NHS and construction firms. 4) 24hr Aquaflow performed well with contract wins including a multi-site residential agreement with Smart Managed Solutions and CCTV inspections agreement with Homes England.

This performance highlights the resilience of REACT's financial model, which is underpinned by a balanced mix of high-margin, time-sensitive services and recurring maintenance contracts. The net debt increased to £5.3m from £4.8m in March which included £2.9m drawn from a £3.5m term loan used to fund the acquisition. Until debt is paid down further acquisitions would likely require shareholder support. The enlarged groups’ stronger Q4 trading, increased the working capital requirement which can be funded from cashflow.

Operating cashflow remains strongly positive, due to the repeat and recurring revenue which continues to account for more than 85% of total revenue.

The Trading Statement upgraded forecast for FY September 2025 to an EBITDA of £3m compared to £2.1m last year. The PBT forecast taken from the Alpha Terminal is £2m and an EPS of 6.7p, growing to an EPS of 9.3p for FY 2026.

This gives a prospective P/E of 7.7x dropping to 5.6x. The EV/ EBITDA is 5.8x for 2025 and would drop to 4.2x by September 2026.

Hybridan Comment: The transformational acquisition (me - of 24Hr Aquaflow) and increased trading momentum would justify a higher rating."

In a podcast from thisWednesday. Listen from 51 mins in:

Https://www.youtube.com/watch?v=Kjsd0CyLLmc&t=10s

Indeed Juxtaposition - and it seems to have triggered a nice rise. Perhaps an overhang has ben cleared.

It's really strange that the last part of the broker valuation summary won't post! I'll try once more and abandon it if it doesn't work....

"At 46p, the shares are trading on an undemanding PER multiple of

That's a meaty purchase. More in total than is currently on the book.

Nice 100,000 buy at the full 53p offer price just reported.

LOL Juxtaposition - here's the missing part of Dowgate's conclusion....

"• Valuation is compelling in our view, following the more robust Trading Update and signs of strengthening trading. At 46p, the shares are trading on an undemanding PER multiple of

Rivaldo, the forever 'Dowgate' man. I could embarrass you Rivaldo by copying and posting Dowgates 'forecasts' when REAT was trading in the 80, 90p range. What was their sp prediction then,$1.30ish. lol. They know as much as you. ie, not a lot.

Of...... (left us in suspense Rivaldo :) )

That's a very interesting commentary. I have just now read several ONWD reports,and I think they know what they are doing in the AIM sphere.

REAT appear to have regained a bit of momentum as a business since the profit warning, so it will be interesting to see how this translates to the bottom line when finals are released in January.

At last some reality of the situation from an II, in contrast to the 'paid' nonsense from companies such as Dowgate.

Onward Opportunities PLC reported their interims this morning. REAT is their eighth largest holding with a value of £1.4m.

There's some intriguing commentary - perhaps the main takeaway going forward is that they're sticking with REAT, are engaging actively to improve matters and are very happy with the latest and large Aquaflow acquisition:

"It has been a disappointing period for React Group Plc ("REAT") and we are growing frustrated with the Board after a sustained period of setbacks. In Q324 we identified what we felt to be opportunities to improve both the organic and acquisitive elements of the growth strategy - without these two flywheels working React's equity becomes sterile. Little appears to have been done with our comments, which are now starting to look painfully accurate. We often don't like to be proved correct. In some cases, management themselves have now conceded we are right on various matters. The frustration is that in the meantime the company's ability to garner additional growth capital for M&A has been hamstrung and we are sat with sterile equity. The value creation strategy has been to bolt-on specialist services which can generate attractive and growing cash flows to fund further deals without the need for future share issuance. This strategy is now broken because profits have fallen and the balance sheet is at full capacity, which has led to share price declines to a level where even additional equity capital is not feasible.

The value of REAT lies in growing facilities services where the customer has an urgent call to action as this creates time sensitivity, a need for specialist skills and costs of downtime. All of these create pricing power for REAT and therefore margin. The clue is in the name; 'React'. The most recent acquisition of Aquaflow fits this bill much better and it is no coincidence that it is one of the better performing divisions as blocked pipes are an urgent problem. Whilst we have some specific frustrations, we are actively engaged with stakeholders to resolve these issues and get it back on the track of acquiring price inelastic facility services that are cash generative and growing, utilizing the right capital structure."

Nice buy at the end there

Hybridan have released today's Friday Takeaway note, where they delve a little deeper into small caps. Today they've looked at REAT. It's mostly a reiteration of the facts, but here's their conclusion:

"REACT Group 50p £12.05m (REAT.L)

Financial Calendar:

Year End September, reported 29 January 2025, Interims March, Reported 27 May 2025

Three Main Shareholders:

Octopus Investments Nominees Ltd 19.36%, Dowgate Wealth 11.95%, Harwood Capital LLP 11.0%

Key Investment Points:

Acquisitive & Organic growth, Momentum Building, Strategy on track"

"Repeat or recurring revenue now accounts for more than 85% of total revenue. Operating cashflow remains strongly positive, while free cash flow was still being generated at the interims even after exceptional items mainly relating to the acquisition. The September 2025 year earnings forecast is for an EBITDA of £2.74m compared to £2.1m, on an 18% increase in revenue to £24.5m. The PBT is anticipated at £2m and an EPS of 6.48p, giving a prospective P/E of 7.7x and an EBITDA/EV of 5x.

Hybridan Comment: The returning business momentum and transformative acquisition should flow to earnings growth and justify a higher rating."

Yes i don't understand why the share price is this low. so toped up this morning

Dowgate Capital say Buy with a 120p target price.

They retain their forecasts of 6.4p EPS to this September, rising to 9.1p EPS next year including a full year of the acquired Aquaflow.

They summarise:

"Forecasts.

We view these encouraging contract wins as underpinning our FY25 estimates for revenues of £24.5m and EBITDA of £2.8m. This flows through to PBT/EPS of £2.1m/6.4p placing the shares on an undemanding p/e multiple of 7x and we remain buyers against a 120p price target."

The tone of today's RNS is extremely positive. And some of the contract wins are pretty notable - NHS Trusts, The Works, BP Forecourts, H&M, Homes England etc etc.

Forecasts are for 6.4p EPS to 30th September, rising to 9.1p EPS next year, so REAT are looking extremely good value given the confidence in meeting expectations:

Https://uk.advfn.com/stock-market/london/react-REAT/share-news/React-Group-PLC-Contract-Wins/96580979

"Shaun Doak, Chief Executive Officer of REACT, said: "We are delighted to report on a positive trading performance, achieved despite ongoing economic headwinds. Importantly, a number of deals that were delayed in the first half have now progressed in the second half of the year, contributing to improved momentum.

"These recent contract wins, secured across all four of our divisions, clearly demonstrate the growing demand for REACT Group's specialist services. They are a strong validation of our strategy, focused on securing high-quality, recurring revenue streams while deepening relationships with both new and existing clients.

"We are particularly encouraged by the increasing ability to cross-sell services across the Group, with our businesses collaborating more effectively than ever. Taken together, these wins give us further confidence in the positive direction of travel for the Group and our ability to deliver market expectations for the year. We look forward to updating shareholders on further progress in due course."

With the sp now trading , pre-consolidation at 1p, it represents a 5yr low '

There must be a few disgruntled emails in Thompsons Inbox after his recommended 'buy' when the sp was 30% higher than now.

Must be time for a Dowgate 'buy' post now that REAT is trading at this 'low'.

Two ticks up today, yet only around £1,600 of net buys reported. Perhaps not much stock around, and/or a buyer in the background - REAT being on a single-figure P/E now.

Juxtaposition. These are facts.

After the sp 'drop', the 'spread' was close to 20%. The buying price was 59p and the selling price was 51p. The buying price did not fall from this 59p level, and is now at 60p today, and the sell price, 58p today. It is not possible for you, or anyone, to have day traded this share following the drop in sp, and made 10%. Now, if you ae saying that the shares you sold after the sp drop, were bought pre-consolidation, at below a penny, then yu could make 10%. But you did not say that, and you did not mean that.

We can both join as 'members' on this website, and echange e-mail addressses, and you can send me your transaction details. Simple. You can delete your name and any ID if you so desire. but it must be a recognisable transaction from a known trading house. Betcha you don't.

You my friend are a rocket!!!!!!!!!!!!!!!!!!!!!

I made 9.52% on a trade and short of showing you my account transaction details. I'm not sure how to demonstrate this to you. Apologies to all for the fast and loose nature of my 'rounding' in my last post.

Juxtaposition.

'. I'll issue a correction to your calcs and say you are wrong'

Very scientific. lol.

Now prove it.

Wooppe ping Test. I'll issue a correction to your calcs and say you are wrong