Ra Share Discussion Threads

[allonblack] 02/7/2018 21:48

For the PE to be higher it will have to show a high services component and broader geography for sure. Overseas aid is a growing market and high margin. It will be all about relationships with UN and government agencies in a market regulated to grow at 0.7pc of global gdp.

[pireric] 02/7/2018 21:32

I get that; if we were to base it off headcount for a proxy, revenues in Somalia would be c. 78% of the group. One customer is 59%

These aren't pretty numbers, which is my bigger point.

[allonblack] 02/7/2018 21:30

Fwiw Somalia is not the customer. The UN and UK agencies are.

[pireric] 02/7/2018 21:10

I'm not sure how much I'd be able to trust any forecasts for RAI... just look at how erratic the business financials are, presumably by virtue of lumpy contracts.... in essence, that means in my eyes that this company has greater earnings risk and risk of a sudden profit warning.

2015 - 27.5% gross margin
2016 - 33.2% gross margin
2017 - 39.3% gross margin

2015 - 7.2% ebit margin
2016 - 15.8% ebit margin
2017 - 27.9% ebit margin

No doubt this is at least part of the reason why institutions weren't willing to bid this up to a higher multiple in what is still a very good market for small cap IPOs.

I'd be a bit wary - this looks like a construction company, operating in higher geo-poli risk contries, with a low tax rate and coming off the back of a few gd years. And with huge customer risk to boot. One customer being 59% of revenues last year.

Not sure how much I'd want to bid that up - certainly not to 15x earnings

[allonblack] 02/7/2018 20:12

Thanks. Thats why I was using a 20pc tax rate. I see that the 30m q1 contract includes work in Oman.For me the key issue here is that UN overseas aid is often a legal duty as is the case in UK. It must spend 0.7pc of gdp annually helping other countries. The UK agencies and UN are jn turn the key clients of RAI. Not the recipient countries. Thats a key point.So the test for RAI is whether it can win contracts outside of Somalia and increase its share of what is a huge market. Its a big opportunity. UK spent 2-3x on Syrian aid than Somalian in 2016/17.

[pireric] 02/7/2018 18:57

"In FY2017, projects undertaken in Somalia represented a significant proportion of the Group’s total revenues. Should the Group be, for any reason, unable to operate in Somalia in future, there could be a material adverse effect on the Group’s business, financial condition and results of operations."

No thanks. Low tax is a red herring IMO. Means that any change to tax laws could have a substantial impact on the stock price literally overnight.

[allonblack] 02/7/2018 09:58

With q1 revs at 30m and pipeline at 120m it could be close to 100m in revs and 26m profits. 100m market cap feels very low unless im missing something?

[igbertsponk] 02/7/2018 09:46

No UK tax though - HQ in Dubai and operational HQ in Kenya. Even more attractive!

[allonblack] 02/7/2018 09:41

2018 forecast Revs of 75 and profit of 15m (after 20pc uk tax) on 15x imo should be a 225m market cap which i think is about 135p. Looks good.

[firtashia] 29/6/2018 14:11

Thanks for setting up this thread, Igbert. Bought first thing this morning on admission, having read the admissions document. My reasons for doing so are a) progressive revenue growth and at a fair rate of knots b) making a profit and profit margins quite good, as mentioned c) valuation looks cheap given the historical growth rate d) doesn't look too indebted e)a manager of African descent whose record suggests she is completely committed to helping the less fortunate in that continent, and, the most cynical reason of all, I believe widespread global instability will only increase given the political lunatics and crooks currently in positions of power. GLAH.

[igbertsponk] 29/6/2018 10:39

Listed at 56p so doing OK so far.

[igbertsponk] 29/6/2018 10:22

RA International - Listed 29 June 2018.
Interesting company that builds and operates big camps in places like Sudan and Somalia for US and UK governments, relief agencies etc.
Not many competitors and loads of money to be made.
Well worth a look.

Corporate website

Business website

[minerve] 22/3/2018 21:33

Reynolds American

[minerve] 27/9/2016 13:13

Handy webpage if you invest in US stocks like me and wonder what happens to withholding tax in ISA, SIPPS etc..