React Share Discussion Threads

[vikingben] 20/3/2024 08:33

Quite a few mid price trades, most delayed, have been going through lately!
Hope we might get a clue at the AGM?

[superhoop2] 09/3/2024 18:51

Never seen a company with just 21 million shares in circulation ... very happy if it goes through.

[tole] 07/3/2024 21:37

https://masterinvestor.co.uk/equities/small-cap-catch-up-time-reat-eman-and-foxt/REACT Group (LON:REAT) – Ready To Be Swept AwayIn my Profile on this leading specialist cleaning, hygiene, decontamination and contract cleaning business on 12th February I made a concluding comment about the 1,067,648,507 shares in issue.I clearly stated that –"It would be sensible if moves were made to lose the current 'penny share' status, that could give it more investor credibility – which it certainly deserves."The shares, which I classed as a bargain for new investors, were then 1.25p, they have since been up to 1.50p, that was before yesterday morning's announcement which I consider will go a long way to gaining the £15m valued group so much more credence.The group has now proposed to consolidate its share capital with the aim of improving the marketability of its shares. If approved, this measure will give 1 new share for every 50 currently held.That will see the number in issue reduce following the consolidation to just 21,352,971 shares.We will look to the AGM on Thursday 28th March and the group's latest Trading Update for further comment on the current year Outlook.The shares closed last night at just 1.38p.

[gbenson1] 07/3/2024 11:20

I think he's dyslexic as well!!

[gipps] 07/3/2024 10:57

Well the trade of 3629 was a buy for me to round up to a million although it shows as a sell.

[cfb2] 07/3/2024 10:54

Yes to both ;)
However, dealing costs are going to be bigger than 50 or 60p that you'll lose with the consolidation.

You could argue that the residual shareholding has been donated to the company so it has a bigger market capitalisation therefore you have taken one for team REACT.

Bottom line is, the cost to shareholders are trivial but to the company they are of benefit. The company of course will need to pay out to lawyers, HMRC, companies house etc. to make the consolidation happen.

[diesel] 07/3/2024 10:33

Sounds like someone skipped their maths lessons!

[gipps] 07/3/2024 10:05

cfb2 does that mean that we are all better off if we currently hold shares in multiples of 50 exactly rather than 49 ?

[cfb2] 06/3/2024 18:34

MMs tend to offer a smaller percentage spread with a higher share price. No reason why that should be the case but they do.

A 50:1 consolidation will result in fractional entitlements. Likely the company will benefit; if you had 99 shares before consolidation you will only have 1 share and the company will normally get the pre-consolidation 49 shares. Over a large number of small shareholders this does become significant.

Also a consolidation allows the company to set the nominal share value again. Useful if they are looking to make acquisitions, which apparently they are.

[microscope] 06/3/2024 17:22

Everyone has their (perfectly legit) trading strategies of course and I don't judge, but then again penny shares in my opinion attract the dave4545s of this world, day traders with absolutely no interest in the company's business prospects, however much they pretend to, just a few days 'ramping' and hope they can talk the price up, then flog it and genuine holders are back to square one.

A 70p shareprice should be less attractive to them, and that's good for the shareprice medium term imho. One reason why it's more appealing at 70p to genuine investors. In fairness owenski, the size of the Laddersfree acquisition vis-a-vis the company's size was never going to be cash. And the company has benefited from it.

[owenski] 06/3/2024 16:43

Although the market cap is what it is, penny shares coupled with excessive shares in issue tells me that this has had a love affair with a printing press on steroids, and I'm going to get diluted to death at some point.

When a company does a consolidation, it also gives out a message that its - getting mugs paying the wage bill - days are over.

Well, that's the theory anyway.

[davidosh] 06/3/2024 12:37

Only seven weeks since the results but right at the end of the six months trading to 31st March so potentially good timing to say something on H1

[rivaldo] 06/3/2024 10:58

Agreed overall a good move. Personally penny share or not makes no difference to me - the m/cap etc remain the same - but I can see why psychologically it's better not to be a penny share, and it seems institutional investors prefer a "proper" share price.

REAT remains cheap imo whether it's 1.4p or 70p!

I've signed up for the 28th March AGM Investor Meet - hopefully there'll be another update on trading etc, though it might be relatively brief given that the results will only have been issued seven weeks previously.

[owenski] 06/3/2024 09:33

I always look at shares in issue as part of an overview, billion shares in issue never a positive for me.

[davidosh] 06/3/2024 09:29

There is always a stigma attached to a penny share so sensible I think

[gbenson1] 06/3/2024 08:55

I agree consolidation is a prudent thing to do, as long as the share price holds up on completion. At the current share price of 1.4p that would mean a revised share price of 70p @ 1 for 50!

[eeza] 06/3/2024 07:16

RNS

50:1 consolidation

[rivaldo] 29/2/2024 12:09

The Mello presentation is well worth a watch. I thought the management came across well, the outlook was generally very positive, and the particular advantages of the company were stressed:

- recurring revenues up to a whopping 87%
- free cash flows of £2.1m and £2.3m adjusted EBITDA against a £14.9m m/cap
- further acquisitions being considered
- REAT have the advantage as business purchasers due to their size and reach
- similarly REAT have the size advantage in being able to serve clients nationwide as those clients expand and grow
- REAT are installing systems this year in LaddersFree which will greatly enhance efficiency and enable cost savings

Plus we now know that "the first few months of FY24 have delivered a record trading performance for the Group", and "Momentum from FY23 has continued into the new financial year".

With 0.136p EPS forecast to this September, rising to 0.156p EPS for the year starting in only 7 months, REAT are cheap on a single figure P/E, let alone on the FCF as outlined or given the huge recurring income.

Watch from around 1hr 21m:

[davidosh] 28/2/2024 13:38

Indeed....from my knowledge the average Mello investor is looking at a longer term view and will prefer to buy when there are sufficient sellers so they get a decent stake. Traders and smaller sized investors are looking for quick profits.

[microscope] 28/2/2024 10:22

The problem isn't Mello, the issue, I've always maintained, is that buying spikes following newspaper or tipsheet recommendations, sells follow a few weeks later.

The share doesn't go up straight away by enough to keep those who dived in on the Midas tip and many of them lose confidence or get bored and sell out. In my opinion that's what is unfolding here.

As others of you have said, Mello tends to appeal to a more mature and/or longer term investor.

[yump] 27/2/2024 17:02

Not sure the readers of hotstockrockets and shareprophets are exactly the sort of investors any solid business would want.

Mello is at least followed by people interested in the business itself.

[rivaldo] 27/2/2024 15:39

Ticking back up - at least another 5.7m shares have been traded/cleared already today.

The presentation will hopefully be available to those who registered fairly soon (I didn't have time to watch on the night).

[davemac3] 27/2/2024 13:25

Looks like they encouraged selling rather than buying

[effortless cool] 27/2/2024 10:35

I guess Mello weren't impressed, then!

[dave4545] 27/2/2024 09:17

So no delayed buys and no buys at open.

So the investor does look like a dying breed unless there was poor turnover or people wisely just add it to watchlist for a weak day to pick some up.