React Share Discussion Threads

[effortless cool] 22/7/2021 16:02

Agreed on outcomes. Either way, I currently anticipate this being a medium term multibagger and plan to hang on and enjoy the ride.

PS I recently had some interaction with the management to get a better understanding of the numbers relating to the Fidelis acquisition and found them extremely receptive and responsive. They also come across as very genuine.

PPS If you start your links with a capital H they will become 'live':

[stevesham] 22/7/2021 15:42

You are most welcome, been in the business for 30years

Maybe if rivaldo reads this then he may think about starting a new one as I didn't know you couldn't change it, as this has a long way to run, and it would be a shame to put people off

I believe there are only two outcomes for REAT, the first is they grow to be a Tier one player such as RTO, MTO, or unlisted OCS, or they get taken over, either way I am happy to be sitting here on what should be a nice long term winner for me with not too much to think about, just as and when I can and feel like adding (unless the story changes) but the Directors from Fidelis are awesome and driven so feel very confident.

DYOR...has to be said!

[effortless cool] 22/7/2021 15:34

Thanks, Stevesham, it's great to get some insight from someone that actually knows the business.

I agree about the thread title. Indeed, I think that a big part of the recent drop in the share price was Paul Scott carelessly dismissing REAT as a COVID-play on Stockopedia.

I suspect rivaldo, who set up the thead, would feel the same way now about the title. Unfortunately, whilst you can edit posts, you can't edit titles, so we're stuck with it.

[stevesham] 22/7/2021 15:20

Share the sentiment regarding REAT, I know the industry and it is huge, Fidelis was an excellent purchase as I know both companies, I don't think we have even scratched the surface relating to growth, this is locked away waiting for multibag status

The only thing, about this board that I would change would be the header as it could put people off, REAT is not just a Covid play so when people see that, they may just scroll on by, without trying to understand the business.

Who would believe the market size is over £55billion! so plenty to go for and with Fidelis on board they cover all aspects now

hxxps://britishcleaningcouncil.org/#:~:text=over%2035%20years-,Welcome%20to%20The%20British%20Cleaning%20Council,which%20employs%201.47%20million%20people.

I am also a member of BICsc hxxps://www.bics.org.uk/what-we-do/

So I am probably biased to how large and significant this industry is, and the drive to get rid of cowboy operators and push for professionalism for which REAT is perfectly positioned.

To add to that, give the industry and the people involved the respect they deserve, including the cleaning operatives

[effortless cool] 22/7/2021 14:45

I have updated my valuation model to include Fidelis, although I won't have much confidence in certain assumptions until I actually see some figures with Fidelis in on an ongoing basis. Nonetheless, my current dodgy analysis is sufficient to convince me there is real value at these levels and I have added another 1m today (ADVFN show these trades as two sells at 2.6p).

[cheshire man] 22/7/2021 13:18

Took the opportunity to get some more down here :-)

[rivaldo] 22/7/2021 12:21

REAT are cheap imo at these levels. Management are getting on with the job, and REAT have already announced new contract wins in April and May. The NED share sale was small beer and had absolutely no effect - in fact the share price rose subsequently into June. It was only with the general market sell-off that profit-taking set in.

Relax and have patience! News will come as and when. Meanwhile, REAT's ongoing services to the likes of the police, courtrooms etc will now be returning to full steam ahead given the end of lockdown, complementing the increased awareness of the need for deep cleaning generally and REAT's own series of contract wins over the last year or two.

[fatnacker] 22/7/2021 11:25

Yep, up a bit on low volume, the news vacuum continues though, anything positive would put us back on track, I think confidence was shaken when the none exec sold some shares.

[rivaldo] 22/7/2021 09:04

Good to see the share price rising yesterday and today.

REAT are now on an annual run-rate of 0.17p EPS including a full year of Fidelis. With around £0.8m net cash in the bank against a £12.5m m/cap at 2.53p, REAT are now on an ex-cash P/E of only around 13.7. Pretty cheap imo considering the growth rate being achieved and the potential.

[fatnacker] 14/7/2021 07:56

Well news of a fat new contract wouldn't go amiss right now, or decontamination works picked up massively, owt will do.

[fatnacker] 03/7/2021 08:05

I think it's highly likely."at some point REAT themselves may become a target. This was noted by MB as a possible exit route for shareholders, and again this seems perfectly likely to me."

[trcml] 02/7/2021 16:20

This is how Mitie does cleaning: hxxps://www.mitie.com/mitie-wins-new-contract-with-east-and-north-hertfordshire-nhs-trust/

[trcml] 02/7/2021 15:08

I wonder if REACT were called in to clean up a stretch of the A49 after a lorry shed a load of live chickens.

[rivaldo] 02/7/2021 12:16

Today's Investor Meet presentation was extremely impressive as ever imo.

Interesting commentary on the potential going forward. The Group (including Fidelis) are on an annual run-rate now of £10m-£11m turnover, and this could double in the next 3 years - but it could also be three or four times bigger with M&A, which will always be earnings-accretive.

Other notes:

- REAT have a large and defensible moat as they are the only company of size which (a) provide a one-stop shop of such specialised services and (b) operate throughout the UK and (c) with such fast response times
- there are around 150 customers, of which 25 are large, key accounts. REAT are actively going after these to consolidate their supply chains, in the manner of the recent £2m per annum contract win of "one of the world's leading facility management companies"
- interesting to hear SD note that he much admires Marlowe (MRL), and Mark Braund also referenced them later
- the likes of ISS and Rentokil do NOT do this work, so subcontract to REAT if they have to do it
- all the institutional shareholders are supportive, and in particular the emphasis is on capital growth with no need for dividends. I heartily approve!
- at some point REAT themselves may become a target. This was noted by MB as a possible exit route for shareholders, and again this seems perfectly likely to me.

[argylelowry] 30/6/2021 18:50

Yes. Sorry, I wrote that like a numpty.

[fatnacker] 30/6/2021 18:24

.11GBP is 11p ?

[effortless cool] 30/6/2021 13:31

Well, .011GBP and .11GBP are equally daft, so anyone trading off the back of either is even dafter!

[argylelowry] 30/6/2021 13:07

I saw that Simply Wallstreet seems to have but a decimal in the wrong place for their share valuation (currently it is 0.011GBP, yesterday it was 0.11GBP), so it could be people are trading off an error.

It is odd because they say they get their information from Allenby Capital - and yesterday Allenby said they had not changed their forecast.

[babbler] 30/6/2021 12:52

Crazy drop

[rivaldo] 29/6/2021 22:53

A very healthy almost 11m shares traded today, so at least this will have cleared out some weak holders.

Anyone claiming that REAT are somehow "covid dependent" evidently missed just what a small proportion of income arose from this source in the prior reporting period! And indeed has entirely missed where REAT's income - which is largely recurring - emanates from.

As i said earlier, when you strip out the £0.8m net cash, REAT at 2.9p are 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 on Allenby's relatively cautious forecasts - and there's always the chance of another acquisition too.

[zico01] 29/6/2021 20:14

sickinthehead ... is posting the same rubbish on the other thread which he was posting a year or so ago.He was also saying that the company is too expensive when the share price was 1p ... complete idiot.

The company will be growing it's revenue and profits for many years.

[stevesham] 29/6/2021 19:04

sikhthetech

I note your points, however what is missing from your comments is the fact that Educational buildings still need cleaning (schools, colleges, Universities), as does the care sector look at care Villages as does Hospitality and Leisure cinemas, theatres, sports stadia, along with manufacturing, offices may not be at full capacity, but they still need cleaning and maintaining, and we won't even mention very profitable crime scene cleaning and the really dirty end of the business.

In addition to this, there is the consumable supply, hand soap, hand sanitiser, paper hand towels, toilet rolls, air fresheners, along with services such as feminine hygiene.

So to my mind it is all to play for, and business to be won from less professional organisations

Just my pennies worth, I could go on, but food for thought, so when the Covid thing reduces for them, everything else will grow

Not advice, just my take on the industry please DYOR I will just add awesome management, including the new ones from Fidelis

[sikhthetech] 29/6/2021 18:45

allon,

The 'softness' comment backs up my stance that they are covid dependent.

H1 ended March 31st, whilst major restrictions were still in place.

Going forward, more people will continue working from home or go in a couple of days a week. With vaccines proving effective the need for PPE/cleaning reduces.

[fatnacker] 29/6/2021 17:26

usual drop on results day.

[allonblack] 29/6/2021 14:05

My read is that the mgt are happy with the allenby forecast because it already incorporates softness. Sensible to allude to the softness even if expected imo. Plus i can buy in now at a better level.