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Share Name Share Symbol Market Type Share ISIN Share Description
React Group Plc LSE:REAT London Ordinary Share GB00BZ2JBG28 ORD 0.25P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 1.025 2,374,704 08:00:00
Bid Price Offer Price High Price Low Price Open Price
1.00 1.05 1.025 1.025 1.025
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Chemicals 7.70 0.39 0.08 12.8 5
Last Trade Time Trade Type Trade Size Trade Price Currency
16:16:41 O 1,750,000 1.0475 GBX

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React Daily Update: React Group Plc is listed in the Chemicals sector of the London Stock Exchange with ticker REAT. The last closing price for React was 1.03p.
React Group Plc has a 4 week average price of 0.93p and a 12 week average price of 0.93p.
The 1 year high share price is 2.60p while the 1 year low share price is currently 0.93p.
There are currently 498,509,350 shares in issue and the average daily traded volume is 1,918,952 shares. The market capitalisation of React Group Plc is £5,109,720.84.
tommygunn21: The problem with this stock is that they will most likely do another bolt on acquisition and raise more money. I'm not against such activity but can have a drag on the share price short term. Just hoping we get the share price above the last placing price before that happens!
superhoop2: The next decent contract win should see some movement north in the share price.
rivaldo: IMHO there won't be any buybacks or dividends for some time. All cash generated will be utilised in further acquisitions (though LaddersFree will likely be enough to keep REAT going for a while yet given further acquisitions via shares would be so dilutive at the current price) and especially in paying off deferred consideration for Fidelis. A share consolidation always sounds useful in theory, but in practice for some reason in my experience it generally results in the share price falling somewhat immediately afterwards. Perhaps psychologically potential sellers feel they're getting a better price as the share price is (artificially) higher :o))
elpirata: I think you mean a share consolidation superhoop? Share buybacks might enhance eps but never reflect pro rata (if at all) in enhanced share price, far better for the co. to pay a dividend.
rivaldo: Per Singer Capital's new note, they have initiated coverage as a Buy with a 2.5p target price. They forecast 0.14p adjusted fully diluted EPS to this September, rising to 0.16p EPS next year. Basic EPS is forecast at 0.16p EPS, rising to 0.17p EPS. They summarise: "Shares attractively valued React is trading on a Sep. ’23 P/E rating of only 6.5x or 4.2x EV/EBITDA, which we believe substantially undervalues the Group. We target a 15x P/E multiple, which implies a target price of 2.5p. Given the M&A strategy and opportunities to grow LaddersFree ahead of our forecasts, we see scope for the price to exceed this level over time." And: "React is a leading specialist commercial cleaning, hygiene, and decontamination company. We believe it is well placed to build scale in terms of both its earnings and market cap. The business has a highly attractive proposition – largely non-discretionary, specialist services, a high proportion of recurring revenues (FY23E: 80%), attractive and improving margin profile (FY23E operating margin of 12%), and a capital light model (low working capital and capex requirements). It has a clear strategy to deliver double digit organic growth, alongside selective, earnings enhancing M&A. The most recent acquisition of LaddersFree is transformational and offers potential for significant earnings growth beyond its current, consistent run rate. Against this backdrop, we view a Dec. ’23 P/E rating of 6.5x as very undemanding. We believe the share price is well placed to outperform, driven by both strong earnings growth and re-rating potential as the business scales. We initiate with a Buy recommendation and 2.5p target price."
rivaldo: Mark Braund presented at Mello and came across very well imo. The reasons for the 1.2p placing are in summary (as I understood it) that the LaddersFree acquisition talks initially went well with the share price at 1.6p-1.7p. But then negotiations got a little stuck, and with Ukraine and the markets worsening, completion got delayed. A major - well known - institutional investor came in with a take it or leave it offer of funding at 1.2p. REAT believed the acquisition was so transformational that they took it. The acquisition will be earnings enhancing on its own terms, but REAT can add significant value and accelerate LaddersFree's organic growth: - by increasing sales and marketing, which to date has been minimal - the model is scalable "by introducing services to other companies and through new and existing relationships with other FM service providers" - diversify current service offering, and up-sell and cross-sell the company's other services - "up-sell national services to existing customers who use the company's services locally or regionally"
rivaldo: Obviously that works both ways - I've also seen the share price consolidate and then rise. The placing could be oversubscribed, the buying institutions are in for the long-term, follow-up news flow is positive.....not saying it will, but sometimes share prices actually thrive post-placing. One would bl..dy well hope that at 1.2p the placing was well subscribed!
rivaldo: Given the relative weighting pre and post placing with the post placing 964,339,358 shares in issue I calculate the share price should - in theory! - settle at around 1.5p. Which doesn't mean that natural investor disappointment won't take the price nearer to the 1.2p placing price. If a "meh" trading update is indeed in the works, then perhaps it's now priced in anyway. After the initial sellers have exited the shares might bounce back to that 1.5p level or so. The "earnings enhancing" Target A acquisition will certainly be predicated on the increased shares in issue post placing. I'd like to see the directors investing substantially in the placing. Management have a lot of credibility to regain now. I'm expecting the H1 trading update to be reasonably good if not great given the comment about H2 in particular benefiting from all the recent contract wins. That wealth of contract wins - approaching £10m from memory - and high recurring income/forward visibility give every reason for confidence.
rivaldo: It's worth noting REAT's stellar historic and forecast EPS growth under the new management: y/e 30/9/20 - 0.04p EPS y/e 30/9/21 - 0.15p EPS y/e 30/9/22 - 0.17p EPS (forecast) y/e 30/9/23 - 0.20p EPS (forecast) REAT are a SPECIALIST cleaning and decontamination company (not just a "cleaning company"). They have very high recurring income and forward revenue visibility via multi-year contracts. The forecasts above are deemed "prudent" by Allenby, who have a 3p fair value price target. REAT are also aiming to become the sector consolidator, and have made a great start with Fidelis which has been terrifically successful. The PEG of 0.77 shows that REAT are very good value at these levels, let alone the single-digit forward P/E. Any company which is a specialist in its sector, with high recurring income and forward revenue visibility, and which can deliver acquisitions consistently, will trade on a very decent rating. Such a rating would be far higher than REAT's present forward P/E of 8.75.
rivaldo: Good to see REAT getting tipped for 2022 in Money Week magazine: Https:// "Four Aim stocks to buy for 2022 Michael Taylor of Shifting Shares picks four risky but potentially lucrative stocks from Aim, the alternative investment market by: Michael Taylor 7 Jan 2022 React Group (Aim: REAT), 1.4p React Group is a specialist cleaning-services provider. It would be easy to decide that cleaning is low-margin and write this stock off, but React does a lot of the cleaning that nobody else wants to do. This includes prisons, rail fatalities and commercial tenancies. Clearly, if a train can’t travel because of debris on the tracks, then this can cost the train company a hefty packet. React can deploy its emergency-cleaning service across Great Britain within four hours and provides services to several of the big facilities-management companies. One of the company’s stated aims is to increase its offering to its existing clients, as well as expand both organically and through acquisitions. React wants to become the “800-pound gorilla” in the sector by taking advantage of a fragmented market. So far, the board has done a good job of turning the company around and bringing it to profitability. On projected earnings of £684,000, the stock trades on a price/earnings (p/e) ratio of just over ten. It is expanding and generating cash. The market capitalisation, however, is £7.2m, making it a real minnow. The stock is illiquid and it’s certainly not one for traders. If something goes badly wrong you will find it hard to exit: the stock trades only a handful of times a day. I hold React and believe that if the company can continue to grow its sales and profits, then the share price should follow."
React share price data is direct from the London Stock Exchange
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