Rtc Share Discussion Threads

[stemis] 07/8/2018 12:48

Certainly there'd be more synergy I agree from taking out the rather overpaid central management...

[edmundshaw] 07/8/2018 12:45

RTC is small, but seems to be more successful than Gattaca of late (perhaps easier being small). Someone might take them out as an extension or for synergies, or even simply to remove competition. It's definitely on the cards...

Meanwhile cheap as chips and with a good and sustainable yield...

[stemis] 07/8/2018 12:28

The bid for HVN values it's enterprise value at 9.0 x EBIT. Currently RTC is on about 8.6 x EBIT (based on rolling annual EBIT of £1.63m and debt of £6m). Obviously it's not just as straight forward as that (plus RTC also has significant dilution from the share option/LTIP which would up their multiple) but it doesn't suggest a huge under valuation.

GATC on the other hand is on about 6.5 x EBIT....(disclosure: I hold so I'll restrict my detailed comments to that board).

[davidosh] 07/8/2018 11:34

I presume you guys all saw the bid announcement this morning for Harvey Nash HVN. Gattaca has moved up nearly 10% and also looks in a weak position. I would like to see RTC trading much higher or we will be attracting attention here too....

[cwa1] 07/8/2018 11:19

Oh, go on then, put me down for a few. In the light of the(somewhat cheap) takeout of HVN, some sensible looking metrics and confident management speak I'm up for some skin in the game! Trade not printed yet, so assume delayed.

Good fortune all.

[cheshire man] 31/7/2018 08:28

Good to see you clear that up davidosh, thanks for the broker update rivaldo :-)

[davidosh] 30/7/2018 13:56

Schway.....The profits here are not illusory at all. The banks take a close look at credit lines for obvious reasons and are comfortable about increasing NOT decreasing the amount of available facility. There was a one off delay in collecting payment from Network Rail according to the broker and as we saw stated in the results this has now been paid so very little to worry about on that score.

[rivaldo] 30/7/2018 10:07

Whitman Howard have reiterated their 95p price target.

They've also kept their forecasts of:

this year: 10p EPS, 3.85p dividend
next year: 11.6p EPS, 4.24p dividend

They summarise - and note that 80% of profits are recurring with £125m of visible forward revenues:

"2018 interims | Upbeat interims confirm full year forecast

Adjusted PBT at the interim was £0.83m representing growth of 27% with management remaining confident of ‘continuing the performance in the second half’. Trading on a 2018 PE of 6x and offering a dividend yield of 7%, having increased the interim dividend by 8%, we maintain a buy recommendation and price target of 95p (72% upside). At this level, the 2018 PE rating and dividend yield is still only 9.5x and 4% respectively."

"RTC continues to be undervalued. RTC’s valuation/growth profile continues to compare favourably to its small cap recruitment peer group. This is despite the fact that c80% of gross profits (ex the Derby Conference Centre) are recurring and it has visible revenues of c£125m over the next three years. This confirms our belief that RTC is undervalued and that 95p reflects a fairer value."

Incidentally, Ganymede deal with customers like Network Rail and SSE - these are as creditworthy as you can get. And Whitman Howard confirm today that the increased debt was due to "an increase in receivables of £1.8m as RTC is winning more business with clients who request 60 days credit and a one off delay in receipts from Network Rail. We understand this has now been resolved such that net debt will return to more normalised levels by the year end".

[schway] 30/7/2018 09:48

Published profits could be illusory, as borrowings are rising inexorably due to extended credit being granted to some customers. As such does not say much about creditworthiness of said customers. As a result bad debt is a big risk for RTC and clearly this is not reflected in the interims.

[cheshire man] 30/7/2018 07:45

Happy to hold on this news and of course that yield is not to be sniffed at in choppy times :-)

[the big fella] 30/7/2018 07:40

Not forgetting a dividend yield of 6.5% as well.

[rivaldo] 30/7/2018 07:26

Good H1 results today, with 4.38p basic EPS up 22% and PBT up 31% (and I assume the adjusted EPS used by the analysts will be higher).

Forecasts from Whitman Howard are for 10p adjusted EPS this year, which looks pretty nailed on, given the extremely confident outlook:

"The optimism that we expressed earlier in the year has been justified by a highly satisfactory set of results. We remain confident of continued strong trading, in line with expectations, during the second half, and of delivering our ambitious growth plans across all our Group businesses "

ATA and GSS are going great guns. Ganymede has gone backwards - but imagine the upside in this H2 and going forward now that (1) Network Rail contract levels have returned to normality, and (2) when smart meter deliveries improve next year as outlined.

Cash/working capital could be better, but are due to good reasons as explained (ATA contracts and a specific customer now resolved).

Overall RTC are looking very cheap on a current year P/E of just 5.5....

[shanklin] 30/7/2018 07:26

"Long term incentives. For some years prior to 2018, very few share options were granted to senior and top management. The Remuneration Committee is keenly aware of the need to ensure that key staff are suitably incentivised both in the short and long-term. The responsibility to secure, motivate and retain top quality talent at Group Board level falls to the Group Chairman, assisted by the Remuneration Committee on rewards matters. The short term is accomplished by heavily weighted Profit Related Pay and the long-term is secured by the long-term incentives. Earlier this year an award of LTIP options was made to Group Executive Directors to restore an appropriate level of options to vest only on achievement of three-year performance objectives. That process is now complete."

Some might argue that management have done very well out of incentive schemes in the past few years.

[simso] 30/7/2018 07:16

Very good half year results this morning



Sales growth in H1 of £6m (+17%) appears to be in line with what Whitman Howard were forecasting as growth for THE FULL YEAR. At first scan this is better than I was expecting.

[rivaldo] 18/7/2018 11:19

The increase is sizeable - to 1,100 from 660 per the article.

Next month's interims should have a confident tone given both this news and the AGM statement:

"I am pleased to report that the Group has traded well since the publication of the 2017 results in February and we continue to experience a strong demand from both new and existing customers.

The Board is confident of the trading prospects of the Company in the current financial year."

[arthur_lame_stocks] 18/7/2018 10:14

From 5 to 10?

[rivaldo] 18/7/2018 09:25

The UK is to almost double its troops in Afghanistan. This has to be good news for RTC:

[stemis] 30/6/2018 15:26

I don't disagree. If the option issue was addressed and the acquisition funding resolved I would be interested. Until then...

[wednesday6] 30/6/2018 13:47

I get all that steMIS even to the point that a 7,8 or 9% dividend is little cosolation if capital is being eroded however and i'm not condoning the continuel granting of options but shareholder have been rewarded to a degree through the progressive dividend,
maybe it is the uncertainties of aquisition funding which hopefully will be addressed in augusts interims? The managements past aquisitions have been relatively successfull with ganymede and the sse contract if not yet shown in the share price.i'm hoping that if the granting of options are addressed,aquisitions are a success and dividend is maintained/improved then we can at last see the share price perform to mirror that,
Thats not to much to ask is it?
Patience required by the bucket load.

[stemis] 30/6/2018 12:58

What might be overhanging the shares is the risk of a discounted placing to fund the 'transformational' acquisition plan they keep talking about. 7% yield is not much consolation if they drop the share price 10% on a placing...

Plus (to which Shanklin alludes) they've recently given away rights to 13% of the company to 3 execs which is in addition to the 7% they were already entitled to on exercise of their nil cost options. So that means, if they meet the performance criteria, they will end up with around 17% of the company for free. That's assuming they don't issue anymore nil cost options. Since performance criteria is annual EPS of 10% that means pretty much the majority of any growth will end up in the hands of the executives...

[wednesday6] 29/6/2018 22:30

I work for liberty steel (former tata, corus,ues and bsc)and the way they now recruit has changed massively over the last few yrs with a third of the workforce now being agency workers(adecco) so the days of big redundancy payments during a downturn are over it's hire and fire through feast and famine, recruiting company's have a lot to offer during 21st century uncertainties imo.

[wednesday6] 29/6/2018 22:19

In their finals
"Whilst we continue to grow through investing in our existing business and, as the opportunity arises, through carefully selected acquisitions, rewarding our shareholders for their loyalty and their confidence in our business model and management is very important to us. Accordingly, our progressive dividend policy remains a central part of our investment proposition. As a sign of our confidence in the Group's future performance,"

So yes I hope they can be taken at their word to share the success of the business, the recent share holders vote against article 2 ought to show directors that shareholders have had enough of excessive granted options,

If not then maybe a takeover bid in a fractured sector will come?

[shanklin] 29/6/2018 21:53

The question to be addressed is whether, should the business do well, shareholders can reasonably expect to participate in the upside or whether most of this will accrue to the directors.

[wednesday6] 29/6/2018 21:48

With an very attractive dividend of around 7% and all parts of the business allegedly doing well it difficult to understand why the rtc share price has not done better,I won't sell and will continue to collect the progressive divi which surely one day the share price will catch up With?
P/e 6.2

Buy order in for 47.5