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
  0.165 10.82% 1.69 15,049,812 16:45:45
Bid Price Offer Price High Price Low Price Open Price
1.65 1.70 1.825 1.525 1.525
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Chemicals 3.30 -1.95 0.67 2.5 7
Last Trade Time Trade Type Trade Size Trade Price Currency
16:45:45 UT 150,000 1.69 GBX

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Date Time Title Posts
03/6/202017:46React Group: COVID-19 decontamination/deep cleaning specialists528
03/6/202008:11REACT GROUP PLC461

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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 1.53p.
React Group Plc has a 4 week average price of 1.23p and a 12 week average price of 0.58p.
The 1 year high share price is 2.05p while the 1 year low share price is currently 0.27p.
There are currently 415,407,753 shares in issue and the average daily traded volume is 5,051,566 shares. The market capitalisation of React Group Plc is £7,020,391.03.
yump: Sensible fund raise given the share price rise. That is a separate thing to shareholders benefiting, as it has increased the rating. I still can't find any profit/eps figures for likely end of year, so just have to stick with the ones I did earlier, which make it priced at least a year ahead. Placings are always good if you like the shares. Has anyone EVER heard of an attempted placing that a company then said was only just met ? So the 'look how great it is because it was oversubscribed' is a complete and utter red herring. They would not attempt a placing without a decent story and significant advance committment from placees. That's the disadvantage of being a pi. You don't get to hear of it before it happens. As someone said, its also very difficult to be an enthusiastic holder and not think a placing is great. As for lists of impressive names on the share register - another big red herring. Every company has 'impressive' names on their share register. Please as a pi, don't make life that easy for placings by talking up every placing that happens. Many of them end up with no final benefit to pi shareholders.
rivaldo: Indeed - excellent news all round... - placing achieved at a good price - demand for shares as "materially oversubscribed" should mean a good aftermarket - "growing contract pipeline" - appointment of Allenby as sole broker will promote the company more effectively - trading is " ahead of management expectations" - likely news flow to come re acquisitions - but for the late moves up yesterday afternoon the placing would have been at a premium to the share price... REAT are now in an improved position to both bid for larger contracts and take advantage of distressed business acquisitions.
cooltools: Thanks Effortless Cool, here's my calculations. They've made losses in the last six years, with varying amounts of turnover and losses (esp 2018), so we can't use the past to judge, especially with significant management changes at the top. We've heard lots of lovely noise on Twitter about how busy they are, new contracts and extended/expanded contracts, but little in the way of hard figures. The interim figures will be until end of March, which happens to be the beginning of lockdown, so the numbers should reflect the effectiveness of the new management rather than more work due to the pandemic. They will no doubt choose to indicate how business is doing since the lockdown, so we can extrapolate from the interims. Losses in 2018 were substantial, so they will be able to offset corporation tax against that, so won't lose that 19% of profits made this and next year. If they've turned the boat round, as suggested, I'd expect to see the half year revenue at least 2m (last year 1.5m) and finals (in 6 months time) of at least 5m (last year 3.1m), and profits of 250k (assuming 5% margin, still poor IMO). At at PER of 20, that gives a valuation of £5m, there are 415m shares, giving a price of 1.2p - rather lower that where we are now. Let's run those figures with optimistic but not impossible inputs to get a ceiling: interims revenue of 2.5m and full year of 7m, profits 7% giving 490k, PER higher as market more excited, say 30x, gives a valuation of 14m and a share price of 3.5p Markets tend to over-react, so if the figures are very good at the end of June, we might see a spike approaching 3p, which I'd put as a short term target. Longer term, I see them reaching 4p and then 5p, with possible sale of the company at these levels, having proved themselves.
effortless cool: Based on currently available information, I reckon that revenues of £4.1m should be achievable in 2020. I am assuming this increases to £4.2m in 2021, with the COVID-19 boost falling away but leaving some level of accretive benefit over and above the longer-term underlying upwards trend. The operating profit in each year would be c.£85k. On these assumptions, and assuming gross margin and operating costs continue in line with current trends, I get a valuation of 0.4p per share. Hardy inspiring, versus a price of 1.55p per share at present. To justify the current share price, I think we need to be looking at revenues of c.£6m per annum and operating profits of c.£600k. My valuation under these conditions assumes the growth required justifies a higher multiple and takes credit for the existing £0.4m of off balance sheet deferred tax assets. With current conditions as favourable for a cleaning business as they are ever likely to be, this level of growth is not implausible, although it would be a step change from anything they have delivered in the past. If they are not able to deliver these sorts of revenues within the next 18 months, then I don't think that REAT has a viable future as a quoted company, and it should put itself up for sale. All in all, if I had done this analysis before buying a stake, I would likely not have bothered; however, there is enough potential here for me not feel compelled to sell. I will not be looking to add until and unless I see announcements indicating that revenues in excess of £6m per annum will be achievable soonish.
rivaldo: Indeed eeza - with the lockdown now steadily easing the demand for initial decontaminations, followed by periodic deep cleans afterwards, should be huge. With 5.7m shares and good volumes traded again today, it wouldn't surprise me if Helium or Octopus - which own 42.3% of the company between them - had been taking a little profit into recent liquidity given the rise in the share price.
rivaldo: The 2019 option/warrant exercise price was of course set in relation to the share price at the time, and reduces the dilution since the company would receive almost £200,000 on full exercise. Many PLCs make these nil cost, i.e the receiver doesn't have to pay anything to exercise, so this is quite praiseworthy. Plus 60% of the options/warrants can't be exercised unless the share price stays above 2p (and 2.4p and 2.8p). So for any sort of meaningful gain between the various holders the share price would have to be at least 3.5p and rising.
yump: If I had hats, I would eat more than one if they went from a small profit at half-year, to £500K for the full year. We will see, but I reckon £200K is pushing it for this year. I think it might go something like £50K half year, £100K full year. Its not a business that is geared to increasing revenue, with a load of fixed costs, it has a large variable cost. I also think its risky to assume that costs per £ of revenue will not rise. However, if the revenue rises are exciting, the share price may bear no relation to profits. Although it will be making profits and therefore can be measured. We all know what happens to share prices, when profit can't be measured and rosy futures are anticipated ! It can go off into the stratosphere. Maybe the profit figure won't matter, because the % increase will be superficially impressive - companies are always quoting that, even if its from a previous year of making £1. There isn't really a 'safe' investment price a lot of the time. It would help to know what 'management expectations' are, but that hardly ever happens.
cooltools: On the other hand, the profit could be several times that, we simply don't know - have to hold breath for a few weeks. So if 500k profit and a p/e of 20, the price would be 2.5p A worry for me is the lack of director's "skin in the game" - currently M. Joyce has 1.2% which means the directors won't be focused on improving the share price. They may well get decent remuneration (it's been low in the past) - we shall see. Their website and twitter posts are about what they can do, drumming up business - all excellent stuff, but sorely lacking in contracts, new work, new staff, and cashflow. Looking forward to results in June, not long to go! Interim results were on 28th June last year. The interim results will be to 31st March 2020, so will only cover a small part of the pandemic, but should give a clear indication of future expectations.
yump: If you’re a longer term investor just work out what earnings they need to give reasonable value at a share price of x pence. Assuming growth over next year or so, buy shares at what you think is a fair price and sit on them.
rivaldo: This financial journalist has written a couple of excellent recent articles about REAT, including an interview with the CEO - it's partly what got me interested here. The full narrative is a must-read for those who haven't seen it, but here's just the intro and conclusion from the first article - I'm also going to put them into the thread header: Https:// Https:// "React cleans up after Covid-19 Posted on 8th April 2020 In an exclusive interview with Safestocks, Shaun Doak CEO of AIM minnow React (AIM:REAT) reveals that this specialist cleaning and decontamination company has benefitted from the high demand for its decontamination and infection control services to eliminate the virus responsible for the coronavirus. Currently, React is carrying out Covid-19 decontamination clean-ups from everything from police vehicles to offices to manufacturing plants. “I can’t give you much detail, because it’s commercially sensitive IP, however the way we carry out our decontaminations is lot more thorough than many of our competitors, that is for sure. We do ‘before’ and ‘after’ testing to ensure we have decontaminated property to a high standard and certify swabbed areas are clear from traces of the virus. We use the correct chemicals and equip our operators beyond the standards required to ensure their health & safety. We set ourselves apart by doing things the right way.” He continues: “Just to give you a little flavour of that, we do a lot of Covid-19 decontaminations that have already been decontaminated, allegedly, 2-3 days before. But they haven’t been done properly. The ATP-testing we apply hasn’t been done, which we do in order to certify the property as clear.” Not only have its 90 staff been working flat out to meet demand for its specialist decontamination services but he also foresees that this pandemic may alter the mindset of people as to the importance of regular deep cleaning. “We’ve all worked in offices that have never experienced a deep clean but I think that moving forwards things may be very different. I think it has to be.” "In summary, React is much more than a Covid-19 play and I believe the business will continue to grow profitably. As it does, the share price should appreciate substantially. Indeed, in time, I’d hope to see a dividend."
React share price data is direct from the London Stock Exchange
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