React Share Discussion Threads

[highnetworthclub] 23/10/2020 23:15

Serial Loser Yump posted on DVRG thread in regards to my investment in #DVRG Loser Yump: "Highnetworthclub"Not for much longer with your investment strategy mateYump y Grump y u made yourself look like a FOOL by saying the above...Bought in at 24p now sitting pretty at 32.75 that is up over 30%Now I should call our club Extra highnetworthclub #mate

[highnetworthclub] 23/10/2020 23:07

Yump posted on DVRG thread in regards to my investment in #DVRG Loser Yump: "Highnetworthclub""Not for much longer with your investment strategy mate"Yump y Grump y u made yourself look like a FOOL by saying the above...Bought in at 24p now sitting pretty at 32.75 that is up over 30%Now I should call our club Extra highnetworthclub #mate

[highnetworthclub] 23/10/2020 23:05

Yump posted on DVRG thread in regards to my investment in #DVRG Loser Yump: "Highnetworthclub""Not for much longer with your investment strategy mate"Yump y Grump y u made yourself look like a FOOL by saying the above...Bought in at 24p now sitting pretty at 32.75 that is up over 30%Now I should call our club Extra highnetworthclub "mate"

[ccr1958] 23/10/2020 07:40

Thx for posts guys . I hold.

[ged5] 22/10/2020 23:00

I see your uncertainty, Investographer. Not sure myself.

It's now gone and the profit takers have also gone.

A new contract or two, a director buy or two and a little bit of sentiment and then off we go again!

[investographer] 22/10/2020 22:50

Actually, not too sure now....

[investographer] 22/10/2020 22:49

That was a sell from yesterday morning timed at 1028

[zico01] 22/10/2020 17:21

could the late reported trade of 2,000,000 shares @ 1.30p be a director buy ?

[investographer] 22/10/2020 09:15

Andy, it was a post on Stockopedia, some good posters on there.

[andyview] 22/10/2020 09:11

Great post investographer...thanks

[yump] 22/10/2020 09:06

If you’re going to quote peg then it only really applies after a few years of growth, as its inevitably high in the years when profit breaks through. Thats why Slater required several years of growth.

Ignoring that doesn’t make it go away. Neither does ignoring the fact that they won’t be able to buy a worthwhile cheap business in a market thats very healthy.

[investographer] 22/10/2020 09:04

mojomogozYesterday 11:51 am8 likes...seems that others may have an interest.I have a small speculation in React (LON:REAT) too...given the size of the company its not possible to be anything other than small.Net cash has increased by c.£350k since interim (factoring in £1.16m raise in June). Approx £150k of that was timing related on receivables around end of first half. So lets say its at least £200k for the second half....and given half on half as well as YoY growth then perhaps there's another £150k of receivables effectively hanging over the year end?Earnings and cash translate quite well it seems for this business so H1 £50k earnings and then £200k plus for H2 -> £6.5m market cap on 26x current earnings after a 'turnaround' year of growth at 44%. If this is what they report then share price is probably fulsome for now. But if there's a net receivables carry over in the cash (half on half growth hints it) and earnings for the year approach £500k -> 13x current earnings on 44% growth -> share price will move a decent bit higher on results.Some points:very messy history and some pretty questionable activity and characters sniffed about this back in the day when spun out Autoclenz biz...of the corporate raider/manipulation sort that do over small sharehioldersShaun Doak is named CEO but IMO he is CEO in training (and primarily a good salesman that company needs). The CEO-trainer in background is experienced guy called Mark Braund ex CEO at RedstoneConnect and InterQuest (before the funny stuff at IQ). At this moment in businesses development this seems good. They need a good salesman more than a high end CEO...and they have the oversight of high end CEO!Simon Rogerson is a big personal holder (most of the Octopus holding is his). He's the founder of Octopus. This doesn't mean all will be really good...but its interestingVery hard to know if covid is net positive or negative for business development...they were doing quite well before covid came along but this obvs brings attention......but it seems that they are very focused on ensuring they do highly specialist high margin cleaning and not get sucked into lower end stuff where they compete with regular cleaning businessesA large part of their future growth could be as a 'platform company' whereby they connect highly qualified (often a bit bizarre and ugly, like drugs dens, pigeon damage, body fluids and parts,etc) independent cleaning capabilities with customer in urgent need....so high margin low capital intensity.Anyway, a lot to play out and very high uncertainty and risk...but execution to date is positiveADDITION: I see that house broker Allenby forecasts PBT £182k....so lower than what I put above and they have a better idea/access than I.

[rivaldo] 22/10/2020 07:54

Interesting. On EC's figures for the current year, with a rounded £400k PBT, the P/E falls to a quite reasonable 16.5.

Given the £1.8m cash pile, and the current £4.8m EV, the ex-cash P/E falls to just 12.

The PEG (based on a P/E of 16.5) falls to a mere 0.14. As we know, any PEG below 1 is deemed to be good value.

A PEG of 0.14 is therefore an out and out bargain. And of course, if you strip out the £1.8m cash - almost 30% of the m/cap - then the valuation looks even cheaper.

[yump] 22/10/2020 00:05

EC’s figures look reasonable to me. P/e of 30 falling to 20 at a share price of 1.5p.

Difficult to know if thats an attractive valuation.

[brownbear3] 21/10/2020 23:49

Could be snapped up by one of the big boys

[sikhthetech] 21/10/2020 21:48

Reat are expecting an extra £1.3m revenue compared to fy2019?

That's not much considering we're in the biggest pandemic for 100yrs.


"REACT has continued to make strong progress in the period, achieving 42% organic growth in revenue to approximately GBP4.4m* (12 months ended 30 September 2019: GBP3.1m)."

[effortless cool] 21/10/2020 21:44

I have updated my valuation model for REAT and now get to 1.26p per share. That's 5% below the current price, but I am happy to hold as my valuation has been tracking up at each model revision and I expect that to continue when I roll forward my valuation window once the full year results are published.

Annoyingly, Allenby have not extended their coverage to 2021, so their note is pretty pointless. I have £4,843k revenue for 2021, £398k profit, 0.08p EPS and £2,144k net cash.

The interesting thing is what has been happening with gross margins, which have progressed as follows (Shaun Doak appointed 2019 H1)
2018 H2 19.3%
2019 H1 26.4%
2019 H2 30.8%
2020 H1 33.2%
2020 H2 36.0% (est)

I am projecting 36.5% for 2021 H1 and 37.0% for 2021 H2 although, clearly, given the historical trend, there is scope for these to be exceeded.

[yump] 21/10/2020 21:33

The best thing about the accounts is they're easy to work on...

4.4mln revenue.
minus 3.08mln (Cost of sales min has been 70%)
Gross Profit: 1.32 mln
Admin: double first half say 1.2mln

Profit: 120K

So unless admin costs drop significantly in the second half, 200K profit is pie in the sky and has certainly not been 'conservatively' estimated.

Perhaps there is something else at work...?

[yump] 21/10/2020 19:14

Also just repeating the stuff about a 'similar upswing' doesn't make it any more valid, without backing it up.

You seem to have totally missed the point that businesses moving from loss to profit always show a rapid change in profitability.

Come on now, its trivial stuff.

[ccr1958] 21/10/2020 17:14

Would be a big shot in the arm to shareholders

[investographer] 21/10/2020 16:52

The CFO needs to buy a few too

[ccr1958] 21/10/2020 16:39

Thx rivaldo.....2 out 5 board members then ..be nice if Sean bought a few million.

[sphere25] 21/10/2020 16:15

Have put this on the watchlist for the first time after reading the update today. The valuation isn't bonkers cheap nor is it overly expensive imo, likely explains why the price hasn't moved materially today or for a while. The volume doesn't suggest a change in sentiment to that view either - a happy market neutral.

However, they are clearly sat in the sweet spot, and anyone you speak to in this area are bonkers busy, so I think there is every possibility REAT could keep smashing forecasts out of the park. Some of that is definitely priced in, but the higher earnings look very sustainable in this new world and beyond.

First high level view too bullish?

No position yet, but could be a speculative one to tuck away.

DBAM DYOR