React Group Share Price (REAT)

Good to see only £7k of buys today causing a 1p rise and the bid price increase to 72p (the true closing price last night was 71.5p, disturbed by a late closing buy at 73.5p).

Hopefully indicates not much stock around to satisfy demand.

tipped as a buy on saturday (subscription-only):

https://*************.com/views/74216/react-group-first-half-growth-across-all-three-divisions-buy

"react group – first-half “growth across all three divisions”, buy

by hotstockrockets | saturday 27 april 2024

cleaning, hygiene, and decontamination group react (reat) has issued a trading update emphasising half-year ended 31st march 2024 “good sales growth across all three divisions of the business… adjusted ebitda of £1.3m up 38%”. how good is the news from a currently up to 72p offer price for the shares?

etc"

Currently online you can only buy a maximum 3k shares at 71.95p, whereas you can sell 15k shares at a big premium to the 71p bid at 71.55p. Encouraging.

I added more yesterday - can't see the share price being at present levels for long.

Singer Capital Markets have updated - they say Buy and have a 97p target price.

They forecast 6.76p EPS to this September, rising to 7.68p EPS and 8.61p EPS.

The £1m cash pile also rises to £2.6m and then £4.6m.

Since H1's EBITDA is already 53% of their forecasts, even before the recently RNS'd contract wins, it's highly likely imo that REAT will beat expectations this year.

Especially with over 85% recurring revenues and improving margins.

Singer conclude as follows:

"Contract win momentum continues The Company has continued its drive on new business, with three recently announced material contracts totalling over £1.3m of revenue p.a. In addition, it continues to be awarded numerous small and medium sized wins which highlights its cross-selling capability. The pipeline for the remainder of the year remains robust which provides the Board with confidence over full year expectations".

Dowgate Capital have retained their Buy and 100p price target.

They forecast 6.9p EPS to this September,rising to 8.1p EPS and then 9.0p EPS, though they state that even these are based on conservative assumptions.

The £1m cash pile at September rises to £3.1m and then £5.1m. Though it's likely that there'll be more earnings-enhancing acquisitions by then.

In summary:

"Positive 1H momentum shines through.

React Group has released a positive update that has confirmed that the strong 2H 2023A momentum has continued into 1H 2024E, with what was described as a ‘record trading performance’. The Board has reported good sales growth in all three divisions of the business, with the statement commenting that the Board has ‘a high degree of confidence in achieving full year market expectations.’ We have left our FY 2024E forecasts unchanged at this point. These assume FY +9% revenue growth, but in our view, there could be an accent on the upside as the year progresses, following 1H revenue growth of +14%, and contract wins that should benefit 2H and next year. We retain our Buy stance with a Target Price of 100p. This still conservatively assumes the Group achieves c60% of its medium term cashflow target, and we reiterate again, it also does not include any potential value enhancement from deploying the Group’s firepower on acquisitions."

"We retain our Buy stance with a 100p TP. We value React Group using the EVA®/MVA valuation method. This derives a share price of 100p assuming only c60% of the medium-term goal of £5m p.a. of free cashflow generation is met. It could outperform that, and we highlighted in our 9 April initiation research, that we believe the Group has firepower to enhance."