Rtc Share Discussion Threads

[mr hangman] 22/1/2018 16:33

Let's not forget how our CEO & FD, disposed of quite a few shares at the start of June 16 only to issue
a profit warning in Oct the same year...

[shanklin] 22/1/2018 16:23

simso

From past experience, I would have thought zero cost share options are one of the primary reasons the share price is not stronger. It is an excellent way for the directors to appropriate cash from the company and reduce the effective PBT and EPS as experienced by other shareholders.

The other negative I experienced, when a shareholder for circa two years, was broker forecasts gradually being marked down with no associated trading statements, so that it was all rather on the sly.

Obviously all IMHO, but I would rather not be exposed to either of these situations.

Cheers, Martin

[simso] 22/1/2018 16:04

Clearly the Forecast P/e of 6* Whatman Howard's 2018 Forecast is a very cheap rating, especially for a company with significant Contracted Recurring revenues and achieving reasonable growth.

As a shareholder, if I was looking for reasons to justify such a lowly rating (and how that might be improved!), I could argue that the converstion of profit into truly free cash is pretty modest. In 2018 (for example), the £2.1m Forecast PBT is "spent" on £0.9m increase in Working Cap (mostly Debtors/Accounts Receievable), £0.3m of Tax, £0.3m on Capex (which I would assume is essential Maintenance Capex), £0.2m on "Other" (whatever that is), leaving £0.4m of truly Free Cash. The Dividend costs more than all of this at £0.5m, and external debt rises by £0.1m.

The area where I would assert there may be potential for improvement is the debtors/accounts receivable. While it is natural for this number to rise in line with the sales growth, I would also argue there may be opportunity to improve the overall debtors number to free up some more cash. Looking back to the last Annual Report from 2016, the Total Trade Receivables was £9.3m (and am sure is now higher). The issue within that number is that £1.1m was significantly "overdue" by more than a month, and a further £2.7m was overdue but by less than a month. While I accept it would be impractical to chase down all of that £3.8m overdue (which in total would be enough to all but eliminate the £4m External Debt), I would hope there is scope for some progress? I have sadly learned through bitter experience of chasing overdue payments through my career as a retail FD, that a constant chasing on an almost daily basis often had the effect of moving payments to my company to the front of the queue...as most people hate being cahsed and hassled constantly.

[rivaldo] 19/1/2018 15:28

Cheers davidosh. Hopefully the upward climb will continue into the Feb 26th prelims and beyond now that the market has certainty.

[cheshire man] 19/1/2018 14:33

Thanks for that dd,,,,,nothing not to like here :-0))

[davidosh] 19/1/2018 11:06

The latest update from the analyst at WH the broker...

RTC (RTC, MK CAP £10m) - In-line trading update/limited expsosure to Carillion - RTC has released an in-line trading update for the year to December 2017 implying PBT of £1.4m representing growth of 16% with all business units performing well. It has also taken the opportunity to state that its exposure to Carillion is limited to less than £100K which will be fully provided for.

Following the award of the SSE contract which commenced in November we expect PBT growth of 28% in 2018. The contract is to source, train and provide dual fuel installers for SSE’s smart meter roll-out programme and will provide excellent visibility to earnings and reduce their cyclicality. It also emphasises RTC’s ability to supply engineers on long-term contracts working in safety critical environments and compliments the existing Network Rail contract.

We estimate 76% of gross profits (ex DCC) can be viewed as recurring and confirms our argument that RTC deserves a higher rating as it should not be viewed as just a cyclical recruitment company as the SSE and Network Rail contract significantly de-risks earnings. RTC currently trades on a 2017 and 2018 PE rating of 8x and 6x respectively and offers an attractive dividend yield of 5.5% (DPS cover 2.2x). We reiterate our buy recommendation with a price target of 95p. The next update is on Feb 26th when the prelims will be released. Analyst Comment: Andy Smith

[wednesday6] 18/1/2018 12:49

I also emailed the company this morning to clarify the carillion situation.

[rivaldo] 18/1/2018 12:38

Great to see the CLLN hit is de minimis. I suspect it's included as a written off debt in PBT in the normal course of business, so expectations are after the write-off.

The last forecasts I saw from Whitman Howard were:

last year : 7.4p EPS, 3.3p dividend
this year : 9.8p EPS, 3.6p dividend

This puts RTC on a current year P/E of 5.7, let alone a 6.5% yield, which seems ridiculously cheap.

You'd be unlikely to ever see RTC trading on racy multiples. However, the SSE contract running until December 2020, plus the rail maintenance work, gives RTC an unusual degree of certainly for the sector, so could see a re-rating to a P/E of say 10 or 11 if things go smoothly.

Which would give a share price of say 100p-110p.

[cheshire man] 18/1/2018 12:34

I contacted the company yesterday asking for clarification regarding Carillion suggesting a reassuring RNS may be in order,,,,,,,thing a few more may have done the same,,,,,

well done RTC

[briangeeee] 18/1/2018 12:22

"Trading remains in line" because they can absorb the hit, or they'll treat it as an exceptional? This sort of thing isn't exceptional of course - customers going bust is normal business in staffing agencies, so IMO it shouldn't be excluded.

[gleach23] 18/1/2018 12:10

That's how I read it tiswas. Looks like they brought forward the TU from 'on or around' 29th Jan to clarify the Carillion situation then, which is good to see.

[tiswas] 18/1/2018 12:07

So does that mean they will meet expectations even after the Carillion write off?

[11023154] 18/1/2018 07:09

Yea fair point. Not why I'm invested long term though.

[brockwl2] 17/1/2018 10:50

Not sure how big but Carillion are definitely listed as a client on the Ganymead website. So will be some impact. I sold out this morning, and until I hear what the situation is, I'll stay on the sidelines. My gut feel is that if it had no effect they would have rushed out an RNS to say that. No news suggests to me there will be some effect.
I just didn't think it worth taking the risk.

[battlebus2] 17/1/2018 10:13

That’s what I was thinking 🤔 just how big is the link anyone know?

[brockwl2] 17/1/2018 10:08

Anyone concerned about the Carillion impact here? Likely the cause of this weeks weakness.

[gleach23] 15/1/2018 21:10

Very much hope you're right this time 110 ;)

[11023154] 15/1/2018 17:59

Haha. Gleachy go back a bit further and you'll see I was in at 25p...I also have a good network in the recruitment industry.This statement will be the statement we've been waiting for in last 2/3 years.

[simso] 09/1/2018 16:56

Yes daviddosh I actually have 4 of your stock challenge picks, and immediately from the first league table on 2 Jan was rooting for you more than I was for myself!

[cheshire man] 09/1/2018 16:29

I hold three of those davidosh,,,,lets hope we will be duly rewarded :-)

[davidosh] 09/1/2018 15:51

Hangers....Sorry just not feeling the sizzle in the award winning sausage ! My queuing and ticketing folk at ACSO are doing rather well though.

[mr hangman] 09/1/2018 15:18

No CRAW this year ?

[davidosh] 09/1/2018 15:08

Just for the record my five StockChallenge entries for the 2018 competition are..
1. ESG eServGlobal
2. OPM 1pm plc
3. NTBR Northern Bear
4. RTC RTC Group (#Mello2018 venue in April)
5. JLH John Lewis of Hungerford (positive results update today)
A mix of mainly tiddlers but scope to double on good news hopefully in 2018

[someuwin] 09/1/2018 14:06

Nice tick up.