React Share Discussion Threads

[zico01] 27/1/2021 22:52

We'll get a further update on first 4 months of business for year ending September 2021 on 18 february at the AGM.

From the results >>> business so far has been very strong on all fronts.

[avsome1968] 27/1/2021 08:37

I took a position after reading the results, i thought they were excellent couldn't understand why they dropped give me a chance to get a nice holding here.
We have profit and cash and through this year we will get financially stronger and receive more contracts.
Covid will not go away for years other strains will keep coming out the woodwork React are going to be busy for a very long time especially when everything gets back to normality it will be implemented in large firms to get there workplace cleaned on a regular basis to protect their staff, nothing worse if you employ workers and they have a excuse to take a sick day off, feel this could be another ITX in the making.

[investographer] 26/1/2021 11:58

Pleased with results

[zico01] 26/1/2021 11:24

Also these revenue and profits forecasts from Allenby today do no take account of any acquisition(s).

[rivaldo] 26/1/2021 09:45

Looks like the traders have taken their profits and are out.

REAT look definitively good value to me at these levels given the rosy outlook and the new - and conservative - £505k PAT forecast. I'm not surprised the directors were buying in size last month at around 1.3p-1.35p.

Another positive excerpt from today's narrative:

"The circumstances surrounding COVID-19 and REACT's response to it, has helped accelerate the sales engagement process with new customer prospects, and enhanced the Company's reputation with many in the existing customer base. This resulted in incremental new business opportunities for other of REACT's services, some of which were delivered during the period with others flowing into the new financial year."

It's encouraging to see that it's the core business which is driving the growth, helped by COVID-specific revenues of £444k for the period - and this was achieved despite that core business being hit in certain sectors by the lockdowns.

[zico01] 26/1/2021 09:21

React has the benefits of being established

Another interesting snippet from results:

The circumstances surrounding COVID-19 and REACT's response to it, has helped accelerate the sales engagement process with new customer prospects, and enhanced the Company's reputation with many in the existing customer base. This resulted in incremental new business opportunities for other of REACT's services, some of which were delivered during the period with others flowing into the new financial year.

[yump] 26/1/2021 09:15

Bound to get profit takers - easy trade from 1p ish.

I think next years forecast depends on how hard management have had to squeeze to get that profit or whether its just highly geared to revenue.

[zico01] 26/1/2021 09:15

Outlook is positive following a strong first 3-months of the new financial year (Q1, FY 2021)

[avsome1968] 26/1/2021 09:10

Under 7m M/Cap too cheap on those results.

[yump] 26/1/2021 09:07

So possibly not really a covid stock after all although a fair chunk of revenue growth was from covid.

Makes you wonder what previous management were doing for all those years.

[avsome1968] 26/1/2021 09:07

Just took a 300K plus stake here, read through the results cant understand why they are down today look very good to me .

[jangaman] 26/1/2021 09:06

Results were good but 0.04p on last night's closing price is a bit rich if you ask me, even with potential growth. They should also have spent some of that placing money by now. What are they doing with it apart from using it for working capital requirements?

[zico01] 26/1/2021 08:58

Traders taking their profits and losses.

The share price will consolidate and rise.The AGM is on 18 February further update on H1 trading will get this higher.

That revenue and profits for the current year from Allenby will no doubt be upgraded in due course.

[babbler] 26/1/2021 08:40

They should have made a loss and increased debt then they would have doubled.

[ged5] 26/1/2021 08:39

Very disappointing price reaction so far. There seem to be a number of traders taking some profit.

Results are good.
Outlook is good.

Ambitious company with its first year of profit.

[effortless cool] 26/1/2021 08:37

[Posted on Stockopedia]

Great results from React (LON:REAT) today, showing a maiden profit and a very upbeat outlook.

REACT are deep-cleaning specialists. They installed a new management team a couple of years ago and are reaping the benefits now, being in a happy place where both revenues and gross margins are improving rapidly.

Revenue rose by 41% to £4.36m. Of course, given its specialism, the company gained some business from COVID. However, even after backing out the £444k of COVID-specific business and notwithstanding the fact that COVID adversely affected some revenue streams, top line still grew 26% in the year.

Gross margin improved to 33.2%, up 470bp in a year and 1220bp over two years.

Having raised £1.16m net in June last year, REACT has a rock-solid balance sheet and, with £1.78m cash, it is well-placed to invest to fund further growth, possibly through acquisitions.

The outlook statement is very promising too:

The new financial year has begun well, with profit and cash generation stronger in the first quarter of FY 21 than the prior year.

Allenby is the corporate broker and the only one providing forecasts although, unfortunately they are not being captured by Stockopedia for some reason.

They are forecasting continuing revenue growth of 18% this year, to £5.15m and a further 124bp improvement in gross margin, leading to FY 2021 PBT of £505k, and label these projections as "prudent".

React (LON:REAT) are a tiddler (c. £8m market cap) but seem to be in a sweet spot at present and, in my opinion, offer tremendous upside potential.

(I hold)

[babbler] 26/1/2021 08:28

Someone was desparate enough to sell at 1.4? Jeez. I must need new glasses.

[qs99] 26/1/2021 08:24

OK sorry, but Allenby obviously already leaving loads in the tank for profit growth upgrades IMO.

Revenue grew last year by c.£1.2m and EBITDA c.£400k, yet Allenby are only forecasting this year growth of £800k and £300k how does that compute?

IMO react should be pushing nearer £6m Revenues and therefore pushing towards that magical £1m EBITDA....DYOR and cash on the back of that should be very material......

Cheers
QS99

[elpirata] 26/1/2021 08:18

give it time babbler, need to get the profit takers out of the way first

[babbler] 26/1/2021 08:15

Muted reaction. Stupid market.

[babbler] 26/1/2021 08:05

Can anyone buy?

[1gw] 26/1/2021 08:02

Nice open.

[babbler] 26/1/2021 07:59

Mind boggling.

[elpirata] 26/1/2021 07:54

Circa 10% of turnover directly attributable to covid business over approx. 6 months equating to circa 20% annualised, demonstrating React is not a covid reliant business!

COVID-19-specific business generated c.£444,000 of revenue in the period and replaced some of the revenue and gross profit contribution lost to the temporary decline in some of our customer's requirements.

Excluding the increase in revenue from COVID-19 decontaminations & despite the negative impact of lockdown in some key business segments, the core business still grew revenues by +26% and gross profit contribution by +41%

[ny boy] 26/1/2021 07:53

Impressive, in for 2-5 year hold here before a review, share price should start to motor and go like ITX did after a long consolidation period, so over a period of time 4-6p area imo dyor as usual