React Share Discussion Threads

[jeanesy] 19/4/2024 14:39

the spread is incredibly tight less than 0.5p .

[jeanesy] 19/4/2024 14:20

MM's still needing shares Vikingben ?

[davidosh] 18/4/2024 10:59

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

[vikingben] 18/4/2024 10:38

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 10:04

: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 09:33

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

[effortless cool] 15/4/2024 09:08

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

[rivaldo] 15/4/2024 06:34

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 18:45

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 10:39

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 08:21

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 07:54

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

Available here:

[gbenson1] 08/4/2024 07:00

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?

[microscope] 05/4/2024 16:11

I think this'll take off next month after the 12th May.

That's two years after Laddersfree was announced and the brothers' (sorry forget names) had a 2 year lock in (with 1 year 'orderly market' thereafter).

Market is wondering what will happen to these shares imho. Numbers and news justify a higher share price so this is all that's holding us at these levels.

Suspect they'll find buyers for the shares and that was probably part of the reason for new broker appointment recently. Could be a good chance for patient investors to accumulate at current levels meantime. Any acquisitions are likely to be fairly minor i think, it's a fragmented small sector and they can cherry-pick.

[dexterburt1] 05/4/2024 15:39

I think you're right. The underlying business is growing at a decent clip and 10-20% organic growth / year is achievable. I'd prefer two years of stability / cash generation to fund future acquisitions with cash.

[cfb2] 05/4/2024 15:15

I think the concern is the acquisition path React are on means there are likely to be regular rights issues with a very slow overall growth. Both of these are unappealing to institutions.

[dexterburt1] 05/4/2024 15:07

Understatement of the year Rivaldo... if you're investing in this part of the market you've got to have a longer time horizon than a couple of RNS'... this business is still building its track record. If they can deliver decent free cash flow growth this financial year should deserve a healthy re-rating.

[rivaldo] 05/4/2024 12:29

It's a rubbish market for small caps at present. Give it time - management are doing a good job and there's obvious upside from the strategy, the cheap multiple and the huge recurring income.

[jeanesy] 05/4/2024 09:54

Well rivaldo i stand by what i said.. no interest here sadly despite the positive noises coming from the company.

[superhoop2] 04/4/2024 16:38

Normally, I should be allowed about £3,000 worth of credit up front to do a 20 day trade but offered zilch ... a good sign I'd say!

[rivaldo] 04/4/2024 07:24

I love that you can come to that conclusion after just 15 minutes :o))

The share price is already up 1.5p on just £11k of trades, which hopefully indicates there's not much stock around. Come back at the earliest at the end of the day and then it might be time to discuss how much interest there is!

EDIT - interesting buy just now of 454 shares at 69.36p, a long way above the published 68p offer price.

[jeanesy] 04/4/2024 07:16

Yes great news rivaldo but clearly there is no interest in these shares atmo for some reason.

[rivaldo] 04/4/2024 06:15

Excellent news this morning, with both major contract wins and contract renewals which now include significant additional services.

The headline is £1.3m of annual revenues, which I assume comprises the additional £500k per annum from the new FM agreement plus the new £500k from the UK Government agency, as well as the £295k per annum from the existing FM provider? Or are the new/potential revenues in addition to the core values of the contracts?

Whichever, there's also "a stream of small and medium sized wins" in addition.

It all sounds extremely promising:

[vikingben] 02/4/2024 12:28

Think we might see late trades at the mid price before any change in the price, large orders to be filled at current level??
Could take a while to get sorted.
Edit: trade no 6 is missing in today’s trades, might see it at lunchtime tomorrow?

[petewy] 02/4/2024 09:11

waiting for the dip