React Share Discussion Threads

[chrismo] 25/4/2024 17:12

I know that Trade Num 16 at 16:10 was a buy at 70.222

[vikingben] 25/4/2024 16:48

Might get some delayed sells.
Can’t sell as many as yesterday.
A lot of todays show as sells will be buys, when the spread was 70-73 you could buy at 71.
Suspect all the trades above 71p but below mid price are buys

[gbenson1] 25/4/2024 10:46

The share price is at a conundrum, there aren't many share is issue so the MMs are hoping for some sellers, but investors are waiting for a price increase from the 67.5p 1/50 split, somethings got to give, unfortunately I think the MMs will have to increase the bid price to stimulate sellers which will break their hearts..

[rivaldo] 25/4/2024 09:36

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."

[microscope] 25/4/2024 08:30

Another strong statement from a company growing successfully. On these numbers and promise of 2.5 million for FY I see no reason why 100p can't be achieved this year. Would still have them on a single figure p/e for the current year with likely more growth to come.

Nice cashpile too for further acquisitions and as you point out Rivaldo 85ps recurring revenues is outstanding for any business. And underpins the future..

[rivaldo] 25/4/2024 07:25

A terrific H1 trading update today, which strongly suggests that REAT will beat expectations for the year.

With H1 EBITDA up 36% year on year to £1.3m, REAT have already achieved 52% of the £2.5m consensus forecast, even without the substantial contract wins already announced this year.

Other highlights:

- recurring revenues remain above a huge 85%
- the cash pile is now up to £1.5m, against a £14.8m m/cap
- margins are increasing fast given revenues up 14% and EBITDA up 38%

No wonder there's "a high degree of confidence in achieving full year market expectations" - and much more imo.

On a current year ex-cash P/E easily in single figures REAT looks in great shape for a re-rating:

[rivaldo] 24/4/2024 10:19

Cheers vikingben - on the move now. Should be good for a lot more if there continues to be no stock around.

[vikingben] 23/4/2024 15:33

Well I just about emptied my current account got 5k @679217p.
Tried a similar purchase, quoted 68p. But currently there are a lot more sells than buys, but can still get a quote sell my lot.
All my eggs in 1 basket.
GLA

Edit, just been offered 67.75 to sell 50k, can still get a quote for my lot @67.05

[jeanesy] 23/4/2024 14:51

I really hope this bit is true
' The group is actively looking for further M&A opportunities, but next time is likely to use its own cash reserves

I wouldn't want my shares to be hit like they were the last time, so fingers crossed any acquisition is made using the comapanies coffers.

[stevesham] 23/4/2024 14:46

Thoughts anyone

[gbenson1] 23/4/2024 10:38

Can't believe with so few shares now in issue that the buying over the last week, albeit smallish scale hasn't moved the sp?

[vikingben] 19/4/2024 18:37

jeanesy earlier today I got quotes to sell my entire holding @67.5p.
Could not get a quote to buy 10k.
My guess is that there are buy orders at this level, which is holding back the upward movement.

[jeanesy] 19/4/2024 15:39

the spread is incredibly tight less than 0.5p .

[jeanesy] 19/4/2024 15:20

MM's still needing shares Vikingben ?

[davidosh] 18/4/2024 11:59

React will be presenting at Mello2024 next month along with 40+ other companies

[vikingben] 18/4/2024 11:38

Mm’s are needing to buy shares, just had quotes to sell my entire holding @67p.
Or 100k @ 67.5p.
This might lead to another tick upwards this week.
GLA

[rivaldo] 16/4/2024 11:04

:o))

Onward Opportunities Limited (ONWD) last week announced their annual results. They have a £1.2m stake in REAT, or 6% of their portfolio, and they had this to say:

"With React we believe we have captured a defensive growth opportunity at a value price, and invested c.6% NAV into the company. It is a business the team have been researching since September 2022 (pre-launch) and was an early pipeline priority. Through a mix of specialist cleaning services for UK corporates, the business has a highly attractive earnings profile.

The business has three core divisions:

1. React - the heritage of the group, reactive specialist cleaning often needed for emergencies or callouts requiring specialist cleaning techniques; high margin but less predictable.

2. LaddersFree - large glass pane and cladding cleaning for UK corporates, executed through a capital-light membership model.

3. Fidelis - contract cleaning focused on public services. The business operates over 80% of its sales on contracted terms of one to five years and has been organically growing at 17%+ per annum for the past four years under a new management team. Sales are highly cash generative and yield a high contribution margin, whilst CAPEX, depreciation and amortisation are all insignificant.

Crucially now, as a result of a mix of organic and acquisitive growth and the upcoming cessation of deferred consideration payments, the business is beginning to generate strong profits and free cash flow growth from contribution margin as it exploits inherent operational gearing. If one were to look away for a moment - not knowing the company cleans large glass facades, rolling stock, and prisons - its characteristics mean it could easily be mistaken for a small, successful software company. Yet we have been able to acquire shares in React over the past six months on forward P/E multiples of 6.5x - 8.5x."

[vikingben] 15/4/2024 10:33

EC, according to my portfolio I am well past £3 billion in profit, if only.

[effortless cool] 15/4/2024 10:08

According to ADVFN, we're already at a £720m market cap.

[rivaldo] 15/4/2024 07:34

Tipped with a 100p target following the recent contract wins:



Conclusion:

"Of course, the group now has to deliver on such ‘opportunities’ but they are noted to further underpin confidence in its current year performance. We’ve noted year ended 30th September 2023 ‘real’ profit around £1.6 million on revenue up to £19.6 million and forecasts for adjusted pre-tax profit to rise to above £2 million this year, with also a healthy balance sheet.

We, therefore, now further look forward to a further update on trading the group has stated it will provide next month and continue to consider a (50:1) shares consolidation-adjusted 100p+ share price, £21.5 million+ market cap, looks justifiable on the noted earnings and growth outlook. At up to 75p, still a Buy."

[vikingben] 14/4/2024 19:45

Are there any rules regarding a company buying its own shares, and selling them, I mean regarding timing etc. ??
If the company is performing as expected, would it not be worth them buying their own shares, then selling them when a new opportunity of buying a business comes along?

[vikingben] 12/4/2024 11:39

Mm’s have large orders to fill??
Currently I can get a quote to sell my entire holding, but I can also get a quote to buy 10k @ 67.75p

[rivaldo] 09/4/2024 09:21

Cheers, will read later as it's a 25 page note!

Good to see that they say the 100p target is "conservative" as it's based on only assuming the Group achieves c60% of its medium term cashflow target.

They forecast 6.9p EPS this year, with a closing £1m cash pile.

The year starting this October is forecast at 8.1p EPS with a £3.1m closing cash pile.

[effortless cool] 09/4/2024 08:54

Dowgate have initiated (paid for) coverage with a target price of 100p.

Available here:

[gbenson1] 08/4/2024 08:00

2 important financial dates coming up, the 12 May when the Korinek brothers will be able to sell their 830,000 in new money shares and the 1st June when the final instalment of £1.45m is due, also there's a possible payment for sales progress with certain criteria?