Rtc Share Discussion Threads

[3800] 14/3/2018 17:47

where has you seen that NTV?

[ntv] 14/3/2018 16:31

another deep discounted placing for the few leaving ordinary punters asking why they bothered?

[value hound] 13/3/2018 11:39

EPS of 10p acc to Whitman Howard - 11.7p for 2019 (from 26 Feb)

[stemis] 13/3/2018 11:29

Anyone know what the forecast is for 2018?

[glawsiain] 27/2/2018 11:23

Cheers Rivaldo. Some of that information would be handy in the header. Is Davydoo still about?

[rivaldo] 27/2/2018 10:37

Whitman Howard's note with a 95p target price is worth a read as it outlines exactly why RTC deserve a higher rating than their sector comparators - and certainly higher than the current P/E of 6:

"2017 Prelims | Adjusted PBT ahead of expectations

Adjusted PBT at £1.5m for the 12 months ended December 2017 represented growth of 22% and was ahead of our expectation of £1.4m. In turn, this supported dividend growth of 13% against an expected 6%. Net debt was £4.4m though allowing for an unwind in receivables of £1.5m in January 2018, the underlying net debt position represents a significant improvement on the December 2016 position. Looking forward, we are leaving our adjusted 2018 PBT forecast unchanged representing adjusted PBT growth of 25% but note RTC’s commentary of ‘pursuing acquisitions’.

Our 2018 forecast is underpinned by the material contributions expected from the SSE contract which becomes fully operational in 2018. We also introduce a 2020 PBT forecast implying a 3yr CAGR in PBT of 18%.

Trading on a 2018 PE of 6x and offering a dividend yield of 6%, we maintain our buy recommendation and price target of 95p. At this level, the PE rating of 9x is in-line with peers.

Benefit of having a diversified stream of income was demonstrated in 2017. ATA, GSS and the Derby Conference Centre (DCC) all reported increased operating profits which was able to offset the decline at Ganymede. ATA benefited from higher contract numbers and better cost control (the conversion rate was 25% vs 22.9%) which more than offset a decline in permanent gross profit. GSS was able to arrest its previous decline in earnings as a major client expanded its workload and GSS was able to win a new client – this allowed the divisional operating profit to increase to £0.5m against an expected decline to £0.2m. The DCC benefited from being fully let following refurbishment in 2016, while the decline in operating profits at Ganymede from £2.3m to £2.1m was attributable to less demand on its Network Rail CP5 framework.

Dividend is sustainable. The dividend remains an attractive feature with RTC now yielding 6%. We believe this to be sustainable with the dividend cover being 2.4x and the actual expense being met from free cash flow.

RTC deserves a higher rating. c80% 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 valued as a cyclical recruitment company e.g. visible revenues exceed £125m over the next three years. Its valuation/growth profile compares favourably to its peer group (Empresaria, Gattaca, Parity and Servoca), all of whom offer lower earnings growth in 2018 and a lower dividend yield, yet all trade on higher PE ratings. This confirms our belief that RTC is undervalued and that 95p reflects a fairer value for a company with its superior growth outlook."

Incidentally, a number of my best companies have done very well via acquisitions - KWS, IDEA. ACSO and many others. RTC's management are pretty conservative, so I'm pretty sure any acquisitions will be small in relative terms.

[ntv] 27/2/2018 09:25

just not a placing like they had at PCIP please
75 to 45p just a rip off to smaller investors like me

[ntv] 27/2/2018 09:23

i never understand why companies want to build by acquisition and share dilution
so many companies f^^^ up when they do this instead of doing small bolt-ons
would have preferred slower growth on the dividend and paying down of debt but it does make it attractive at well over 5%

[rivaldo] 26/2/2018 23:06

Good to see a late tick up at the close. Looks like there was a seller out there today keeping the price down, selling in 5k/10k chunks, so hopefully the tick up is a sign that his stock has run out.

Thanks for the reminder davidosh, must get my diary sorted out for Mello.

Which is of course another reason why RTC should have a good H1 this year given the additional revenue coming in to the DCC.

[davidosh] 26/2/2018 22:18

I guess that the management feel that deals can be done with minimal amounts of dilution as it is not in their interests to issue stock whilst at a low rating.

As previously mentioned RTC will have a stand and be presenting at our huge Mello2018 event in Derby on 26th April and all shareholders and potential investors are welcome to attend and it will be an ideal opportunity to meet the management and hear about their strategy for growth by acquisition as outlined today..

Do come and join us at this quality two day event and there will be at least 35 other companies to meet each day plus some fabulous keynote speakers.

[the big fella] 26/2/2018 21:00

Lowly valuation, decent growth and approaching 6% yield. Looks good to me

[the big fella] 26/2/2018 21:00

Lowly valuation, decent growth and approaching 6% yield. Looks good to me

[lanzarote666] 26/2/2018 19:19

I agree with the comments above that see the positives in the trading results and believe that there is still good value at these levels. Hopefully in time others will see the same and we can move up from here.

As with Arthur, the muted response leads me to question why and within the CEO’s notes he suggests that ‘the time is right for RTC to pursue a transformational acquisition plan.’ I expect further news soon.

So how would they fund any acquisition? They have £4.0m headroom in the finance facility, but otherwise it would mean an all share purchase or raising funds via a placing. Perhaps that is why the price fell back after being marked up today.

Regardless, I am happy to hold. It seems well managed, is performing well and has opportunities to grow significantly from a very modest market cap.

GLA.

[arthur_lame_stocks] 26/2/2018 18:47

I am a bit disappointed with such a muted response to some excellent figures today.

Oh well looks like i'll be holding on a while longer and collecting the dividend.

[ntv] 26/2/2018 17:04

bought a few despite concerns about cashflow and debt levels
hopefully this will improve within the next 6 months
it is a good dividend for a small company
got to be careful what they because a lot of managements are ok with bolt on deals but they often go a step to far

[speedsgh] 26/2/2018 15:40

Interesting write up today by Graham Neary in Stocko's SCVR...



... Bluntly, I would never expect this stock to re-rate much higher. As you can see, its peers are all trading at weak earnings multiples too.

On the other hand, it does have an attractive yield and the acquisition strategy has a good chance of succeeding, based on management's track record. So I can see some reasons why this might be of interest to micro-cap hunters.

There is plenty of micro-cap value to be had...

[fozzie] 26/2/2018 09:10

Thanks Riv. I am in at 69p so will be buying if this falls much further today. Agreed, good results and an upbeat statement.

[rivaldo] 26/2/2018 08:38

Whitman Howard today reiterate their 95p target price.

They've increased their EPS and dividend forecasts for this year to 10p EPS (from 9.8p EPS) and a 3.85p dividend.

This increases to 11.7p EPS next year and 13.3p EPS the year after, with 4.24p and 4.66p dividends.

The July divi payment date is as per usual for RTC fozzie.

OT : glawsiain, bleeding predictive text! Now amended to confident....

[fozzie] 26/2/2018 08:00

is it odd to have to wait till July for the divi?

[cheshire man] 26/2/2018 07:51

Very pleased with these results and happy I topped up on the lows :-)

[glawsiain] 26/2/2018 07:41

I agree Rivaldo (except the bit about condiment). From the chief exec's statement "since our return to profitability in 2012 we have increased our revenues by over 65%, our operating profit by over 136% and our basic earnings per share by over 87%"

On a forward 2018 PER of 6.6, with a decent dividend (probably 3.6p this year).

[rivaldo] 26/2/2018 07:28

Great results today, with 8.06p EPS beating forecasts of 7.4p EPS and a very confident outlook for this year:



- GSS has won a new contract and is thriving
- Ganymede's new SSE contract is doing really well, and it has significant long-term recurring income
- ATA is also performing well in temp work

Plus RTC are promising a more aggressive growth strategy, with potentially acquisitions to come.

EPS is well up on last year, helped by a smaller tax charge. It would have been even better but for a small provision re Carillion, but it seems that Ganymede may well benefit in bigger style from Carillion's collapse.

RTC are looking pretty cheap at this price, particularly with such high guaranteed income.

With over 9p EPS forecast this year, things are looking good.

[davidosh] 15/2/2018 20:52

The conference Centre in Derby where RTC are based has important news if you are looking to get married

[glasshalfull] 06/2/2018 17:51

Drew up a wish list last night to target shares in companies that I felt already good value and perhaps better value at open today.

One of those was RTC. I took advantage of the 9% markdown to buy...wait for it...a whole 5k shares as this was the only amount available c.55p. Moved the price higher.

Still look good value IMHO on PER 6 with 5% div yield.

Kind regards,
GHF

[davidosh] 23/1/2018 01:28

The #Mello2018 website is now up and running & available to book your tickets for the best investor event of the year to be held at the RTC run conference centre in Derby on 26/27th April All the information you need is there