React Share Discussion Threads

[ged5] 19/6/2020 12:53

In addition to Rivaldo's excellent summary of the Investor Meet presentation (posts 575 and 580) part of which I've copied here:-.

(1) rail client, used to spend £300k per annum,now spending £1m per annum with REAT
(2) FM client, used to spend £20k, now spends £150k per annum with more to come
(3) FM client, used to spend £13k, now spends £350k per annum and again more to come

Just after this Shaun Doak stated "we've got of the 120 active customers we've established that there's another 25 in addition to the three I've just mentioned there that have a similar potential to these three customers." (from about 27.59 in the presentation)

So the potential if they were all the same as No2 that's 3.75m spend
No3 would be 8.75m
No1 would be 25m
Or on average 12.5m

Even if only half of them reached the potential spend that's about £6m.

This is in addition to the other revenue. Not bad for a company with a mkt cap of just £8m especially if the margins are as good as we're led to believe.

[sikhthetech] 19/6/2020 11:54

We already know what the outlook is.

The Placing & the Investor Presentation also stated that demand is strong. I doubt the outlook has changed between last week and next week.

Therefore, I expect the outlook will again say 'demand is strong'!!


What is important and missing are realistic forecasts.

[investographer] 19/6/2020 11:35

Thanks once again Rivaldo

[rivaldo] 19/6/2020 11:24

We already know that there will be a tiny profit for the period to 31/3. It's the outlook that's of prime importance given the changed and beneficial circumstances at present.

I'm sure it'll be too early for specific guidance on numbers in that outlook, and management appear nicely prudent in that respect anyway. The overall tone will be the giveaway.

It's possible however that post-results Allenby will issue maiden forecasts for this year, guided by the company. If so, I'd hope these will also be conservative, leaving room for upside on a later trading update. Better to underpromise and overdeliver....

Of course there could be more material contract RNS's at any time. There's been three in the last five months alone.

[investographer] 19/6/2020 10:57

Thanks! Looking forward to the figures in more detail.Contemplating whether to buy before or after. I take it that all the news is known/ priced in?

[ged5] 19/6/2020 10:40

Interim Results within the next couple of weeks.

The Company expects to publish its half year report for the six months ended 31 March 2020 in June 2020.

[investographer] 19/6/2020 10:39

Anybody know when the next trading update is?

[zico01] 18/6/2020 21:23

stt

They are getting huge amounts work from FirstResponseCleaning regarding covid-19
from March this year.This is being reflected in the share price. All this work is at very high margins hence the company is making profits rather than losses.
The 2nd half will be a lot stronger than 1st half.

ps you can forget about last year. The price is reflecting how the company is performing curently and its prospects.

The prospects of the company are fantastic they are very busy.

You are clearly not a holder hence the negative posts.

[sikhthetech] 18/6/2020 20:51

zico,

"This year so far they have secured over £1million worth of new contracts for regular deep cleaning/maintenance."


Last yr they reported:

"Turnover for the year ended 30 September 2019 was GBP3.10m (2018: GBP3.30m) as unprofitable work has been discontinued. Gross margins however were 750-basis points higher at 28.5% (2018: 21.0%) and operating performance has materially improved to a loss of GBP183,000 (2018: loss of GBP1,951,000). Excluding exceptional items, the operating losses were GBP178,000 in 2019 (2018: GBP614,000)"




the share price has nearly trebled since the beginning of the year to a mcap of nearly £8m....

All the recent contracts are already in the price. Plus how much of the potential is in the price?

[investographer] 18/6/2020 19:26

Still keeping an eye on this. Can see it becoming like my largest holding BOTB

[zico01] 18/6/2020 18:15

stt

The bit you missed "but we're also increasing growth in regular maintenance cleaning".

They have a lot of work regarding deep cleaning/maintenance and importantly they are increasing this workload.

The recent £400k contract -
The initial contract, worth approximately GBP400k, will run for a period of 35-weeks through to the end of the calendar year and is incremental to the work REACT carries out for this customer on a regular basis. This is part of essential services and not COVID-19 related.

This year so far they have secured over £1million worth of new contracts for regular deep cleaning/maintenance.Plus a 3 year framework agreement awarded by another existing client a large housing association in the North West of England.

All this work is of high margins.

They do not do low margin work no more.

This small company is gaining some traction and very quickly
I have bought in this for the long term.

[jeanesy] 18/6/2020 17:08

They said that they didn't know when the question was asked at the investors meeting

[sikhthetech] 18/6/2020 16:15

EC,

who would want to buy REAT as a long term prospect when all they're winning is one off contracts, which are already factored into the share price ..
;-)


What are the management expectations EC???

[effortless cool] 18/6/2020 15:33

Sure, who would want that high margin first response business when there's low margin regular maintenance to be had instead?

[sikhthetech] 18/6/2020 15:26

Rivaldo

"Right now the demand is for #FirstResponseCleaning,"

That's the problem, they need more demand in 'regular maintenance' than 'first response'... recurring income...


What are the management expectations?

[rivaldo] 18/6/2020 14:06

New tweet - nice graphic too :o))



"We're growing our business across all our #SpecialistCleaning, hygiene and decontamination services. Right now the demand is for #FirstResponseCleaning, but we're also increasing growth in regular maintenance cleaning #REAT

[1gw] 18/6/2020 08:12

Ged5 - fair enough, I hadn't even noticed that. "Manifest error" comes to mind though - I'd still argue the TR1 is perfectly clear, if not perfectly "correct".

[ged5] 17/6/2020 21:59

Oh thank you ever so much 1gw! Mick will be so pleased. ;)))

The answer to your question is No.

At the top of the column where the number of shares is declared is this:-

% of voting rights attached to shares (total of 8. A)

Now correct me if I'm wrong and I know it will just be me but I always thought % meant percentage.

Now 26m% is actually impossible.

However the rest of your post is correct. So was mine, so was Rivaldo's.

That is why I've asked for more clarity on the TR1 form.

[1gw] 17/6/2020 17:39

Ged5 - the TR1 is perfectly clear and correct isn't it? There was no "transaction" and so no change in the number of shares held, just "an event changing the breakdown of voting rights" i.e. the dilution caused by the 83m placing shares being admitted on 9th June.

[moizz] 17/6/2020 17:33

Do we know when the results are out this year?

[moizz] 17/6/2020 17:33

Do we know when results will be out this year?

[ged5] 17/6/2020 16:38

I have sent an email to the address at the bottom of the TR1 form asking for the number of shares to be shown before and after the transaction to provide clarity.

[mickinvest] 17/6/2020 16:32

Good to see we didn't require a heated discussion to confirm that! lol

[ged5] 17/6/2020 16:29

Yep. Same as 4th December 2019. 26 350 000. Wish I could afford that many!

As I alluded to, filling the form out wrong provided more clarity.

[rivaldo] 17/6/2020 16:29

Exactly MickinVest.