React Share Discussion Threads

[sikhthetech] 29/6/2021 13:16

From TU - so the lower demand was as expected.

"H1 for REACT was very strong, however the start of H2 by contrast has experienced some softness in the reactive business as the country stutters towards the end of lockdown."




sikhthetech - 29 Jan 2021 - 12:21:52 - 1537 of 1755 React Group: COVID-19
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Going forward, I think more companies will enter the market and as vaccines rolled out, restrictions eased, lower demand for covid cleaning.

[scooper72] 29/6/2021 12:44

To be fair it is up over 100 percent in 6 months so there will always be some who want to take some of their profits off the table. Personally I'm up 50 percent on my over all holding since having watched the PI world video earlier this year and am keen to top up, just not sure if I should rush into increasing my holding simply because of the recent drop or the recent positive results. Also trying to understand why Stockopedia have it on a value ranking of 15. If anyone can explain why they see the PE as over 80 would be grateful. Thnx

[rivaldo] 29/6/2021 12:13

I feel it's worth summarising this morning's RNS:

- "H2 has started well" (this is repeated twice)
- Fidelis has reported record trading since H1 acquisition
- the contract maintenance business has continued to trade well
- reactive business had two softer months but has since seen "high demand returning"

Today's sellers have imo completely overreacted to overall just one month of post H1 soft trading in one division relative to the other two divisions trading very well and the third now back to "high demand"!

[trcml] 29/6/2021 11:32

I find the snag with upbeat trading statements is that shorter-term investors pile in on the expectation that a few weeks later the actual results will be better. The only real difference is that results generally include an outlook, post-period activity. RACT mentions a softening but (I'd have to read previous years' outlooks) that might be a typical of their business. (In my business for example, May is traditionally a quiet month for new business. I would thick that most businesses have their quiet periods: the difference perhaps is that their outlooks make no mention. REACT is a cash-flow business whose personnel have to be paid regardless so any soft period has to be more than made up for by sufficient improvement in demand to both counteract and maintain minimum expectations. I reckon give it a few days for the dust to settle and the share price will have climbed up again. Going forward though the climb up will be more cautious.

[rivaldo] 29/6/2021 08:42

New Allenby note is out. They've left forecasts unchanged at 0.14p EPS this year, and note that including Fidelis for a full year, REAT are now on a run-rate of 0.17p EPS.

When you strip out the £0.8m net cash, REAT at 2.9p are therefore on a current year ex-cash P/E of only around 16.

There are no forecasts for next year as yet, but presumably the P/E would fall further to say 12 or 13 - and next year starts in just 3 months' time.

We know that H2 has "started well" despite the small reactive hiatus, so with the recent contract wins, plus Fidelis' record trading, we may yet see a further upgrade - and there's always the chance of another acquisition:



"There are no changes to our 2021 forecasts at this stage although we would repeat our earlier observation that on a full year run rate basis, just doubling the Fidelis contribution results in indicative Group revenues of c.£10m, underlying EBITDA of c.£1.15m and EPS of c.0.17p. A strong start to H2 has been made with record trading achieved by Fidelis in April and May and consequently, we believe REACT remains comfortably on track to achieve our full year forecasts."

[1gw] 29/6/2021 08:15

"However"s often don't seem to go down well in TUs. The company can perhaps have another go at settling nerves in Friday's presentation.

"H1 for REACT was very strong, however the start of H2 by contrast has experienced some softness in the reactive business as the country stutters towards the end of lockdown."

[allonblack] 29/6/2021 07:22

I like the look of this company. Clear confident communication from management. Good top line prospects and cash building nicely. Any weakness and I will be adding for sure.

[fatnacker] 29/6/2021 07:17

certainly upbeat, cash position greater than expected, quite a comprehensive report.

"H1 for REACT was very strong, however the start of H2 by contrast has experienced some softness in the reactive business as the country stutters towards the end of lockdown. Whilst COVID-19 decontamination work has been reducing, the more typical reactive emergency cleaning work has been slow to pick up. A similar pattern emerged last year as the country went from full lockdown into a more relaxed period during the summer of 2020. Then as we believe now, REACT had two soft months, which rapidly returned to some form of normality. Ironically as we pen this report we have experienced the first few weeks of high demand returning, including a re-emergence of COVID-19 decontaminations. The contract maintenance business has continued well, with little or no impact from the issues surrounding the pandemic.

[rivaldo] 29/6/2021 07:14

Excellent H1 results and outlook. Revenues are up 20%, and EBITDA is up hugely to £369k from £85k (well ahead of the projected £350k in the trading update).

H2 has "started well", and Fidelis will be added for the entirety of H2 and is trading very strongly post-acquisition. Plus there's still £0.7m cash in the bank after paying for Fidelis.

There was a small hiatus in reactive work in April/May, but this has been boosted recently with "high demand returning", and the overall outlook is very encouraging:

"H2 has started well; Fidelis, acquired at the end of March 2021, reported record trading months in April and May to continue their solid track record of growth. This, together with important post-period customer contract wins for REACT, announced on 20 April 2021, 26 April 2021 and 18 May 2021, support a strong positive outlook for the medium to long term."

[fatnacker] 28/6/2021 18:47

Yep, a nice upbeat going forward statement would be nice.

[rivaldo] 28/6/2021 15:38

Brief reminder - interims tomorrow.....

[effortless cool] 25/6/2021 10:54

Looking back to the trading statement, I clearly need to revisit my net cash.

[trcml] 25/6/2021 10:46

Broadly similar to the trading statement. Outlook will be interesting and likely do more for the share price

[effortless cool] 24/6/2021 20:09

So what do we expect next Tuesday?

I have the following:
- Revenue: £2,496k
- PTP: £224k
- EPS: 0.04p
- DPS: 0p
- Net cash: £635k

[rivaldo] 24/6/2021 07:15

RNS confirmation that the interims will be next Tuesday, with an accompanying Investor Meet presentation next Friday:

[fatnacker] 24/6/2021 07:15

Tuesday it is then.

[vikingben] 23/6/2021 19:57

Not all buy’s, very very tight spread, know I could sell at 3.11 at lunch time

[fatnacker] 23/6/2021 16:49

different day entirely, no selling at all as far as I can see.

[vikingben] 23/6/2021 11:04

Nice reminder rivaldo!
Got some at 3p, just before the rise,

[rivaldo] 23/6/2021 08:53

A reminder of the strong H1 trading update, before the results due in the next few days:

"REACT has continued to make strong progress in the period, achieving c.19% organic growth in revenue to approximately £2.5m (six months ended 31 March 2020: £2.1m) and c.43% organic growth in gross profit to approximately £1.0m (six months ended 31 March 2020: £0.7m). All numbers quoted in this announcement are unaudited.

Growth was the result of strong underlying performance in the core business alongside some demand for COVID-19 decontaminations. Healthcare, rail and facilities management sectors performed well, augmented by incremental business in other areas such as education and residential care homes.

REACT carried out a large proportion of high-margin work in the period helping to drive the gross profit margin to c.40%, approximately 700-basis points higher than the same period last year (six months ended 31 March 2020: 33.2%).

The Board expects EBITDA (before exceptional items relating to the acquisition of Fidelis and some restructuring) to be in excess of £350k, materially higher than the same period last year (six months ended 31 March 2020: £85k).

These numbers do not include any contribution from the recent acquisition of Fidelis Contract Services Limited ("Fidelis"), details of which were announced on 29 March 2021.

The Group's financial position is robust and underlying cash generation remained strong during the period. Net cash at 31 March 2021 was £771k (31 March 2020: £306k). This figure is after payment of the initial consideration for the Fidelis acquisition (£1.5m in cash) and a proportion of the associated transaction costs, the remainder of which (approximately £170k including VAT) is payable in the second half of the Company's financial year."

[fatnacker] 22/6/2021 15:51

There'll be a reason, and I'm betting it's not stop losses, can't be director selling as we should be in a closed period, we'll soon find out.

[jimarth1] 22/6/2021 15:09

stop-loss kicking into action.Looking forward to new highs post results!:)

[jimarth1] 22/6/2021 15:07

what's up with the selling today?

[fatnacker] 22/6/2021 13:55

Mmm falling on low volume, hope it's just nervous pi's.

[fatnacker] 22/6/2021 07:32

"REACT intends to publish its unaudited results for the six months ended 31 March 2021 towards the end of June 2021."