Tclarke Share Discussion Threads

[cc2014] 29/1/2018 14:54

Further to my previous post the bid has crept up to 83 and is holding (for the moment) on what appears to be more sells than buys today and yesterday supporting the view that someone is hunting around for stock (cheap).

Let's see what happens next. Will it move higher or will someone come along and dump another 5k shares, shut it up for the day and send it back to 80ish where it will start the process all over again.

[cc2014] 29/1/2018 11:45

It will end when we least expect it, for no apparent reason.

tbh I'm not sure there is one seller one but instead just a drip of PI's selling out in smallish quantities.

The first sale of the day at 08:00:36 I'm sure is a PI who wanted out. Maybe they wanted the cash to invest in something else. I kind of get that.

The 4012 sale at 10:18:38 again looks like a PI to me and who knows why they want to sell but it happens. Maybe they think the update will be poor. As I said who knows.


Not that it makes much difference but it looks to me like a fund/institution is running a small buy program over the last few weeks looking for a few thousand shares each day. You can see the bid keeps popping up to 82.x every so often as it's looking for volume. The thing is some sell volume always seems to appear within a couple of hours so we never get to find out whether it will go to 84 or 85 or 87 or 90 or whatever if it gets no fills.

Only people making any money here are the MM's. What a wonderful job. Buy the stock at 80.9 or 81.3 or even 81.9 and sell it on at 83.9.

[ivancampo] 29/1/2018 10:58

Danger is this seller uses any good news this week to sell into strength, when will it end!

[cc2014] 28/1/2018 19:02

An extract below. A really good read.

Why all the excitement in the market now about ‘Intelligent buildings’ ?

In simple terms, if you can learn in real time from the data coming to you from millions of sensors in every item on a building control network, then you can only heat or light the areas people need right at that moment, you can learn from patterns of behaviour, you can give people the services they want - be that data, wifi coverage, heating, security or whatever - and so you can get the most value financially from owning that buildling and create the best possible experience for the end user.

To do those things, you need to have all the building’s systems integrated in one system and accessible through what we call ‘one pane of glass’ so you’ve got a dashboard to control and understand the whole thing.

I recently saw the global CEO of a major organisation calling for a worldwide decrease in energy costs across that company’s estate. For them, a 1% decrease in those costs would amount to savings of millions. Intelligent buildings will make these and many other aspirations possible now.

[effortless cool] 26/1/2018 16:01

Thanks, rivaldo. That's certainly a bit more involved than just putting in the electrical circuits.

[rivaldo] 26/1/2018 11:41

Really interesting article about CTO's Intelligent Buildings division and its work with the likes of Cisco at the revolutionary development at 22 Bishopsgate:



I'm sure the market hasn't yet fully cottoned on to CTO's transformation.

[cc2014] 25/1/2018 20:28

Looks to me like buyers and sellers have mostly positioned themselves before the update next week as volume has fallen off.

Buyers still interested when they can get 83-84. I suppose no reason for them to go any higher when the spread keeps closing to the downside

[ivancampo] 25/1/2018 15:04

Bought 4k more, not convinced the seller is finished as what else can be holding this back?

[cc2014] 25/1/2018 12:03

Well, Kier up 18% today and I'm surprised we haven't seen any reaction in the rest of the sector. Shows me just how irrational the market has gone at the moment.

I can see why no-one would want to buy CTO today with a massive 10% spread but I'm surprised there aren't a few buy bots out there searching for volume and slowly closing the spread.

[rivaldo] 23/1/2018 14:19

Bouncing today, with an 85.3p mid-price now.

Nice story about CTO's work in Cambridge's science hubs - should be lots more work from that area over the next few years:

[rivaldo] 22/1/2018 12:10

Expansion to Birmingham:



"TClarke Birmingham Office up and running with Blue chip FM client list
Posted: 22nd January 2018

Operations Director Stuart Clarke introduces the new Birmingham office, which gives the company the presence in the city which we’ve been seeking as a platform for growth.

TClarke has been looking to expand into the Birmingham market for some time. We see substantial opportunities in both M&E contracting - our core business - and also in Facilities Management.

The Office is set up to deliver the full range of TClarke building services and put us in a strong position to bring our targeted tendering approach to construction projects in this area. We have a purpose built project office on the ground floor of our new premises to support this.

One of our specialities lies in facilities management where we deliver the TClarke promise of quality, safety and real client understanding. In 2017 that combination has allowed us, largely through recommendation, to gain a strong list of blue chip clients including CBRE, Pepsico International, Warwick University and Keele University.

TClarke Central Region’s MD Kevin Bones sets out the strategic picture behind the move:

“We see plenty of potential in the Birmingham market for TClarke and as a Group we’ve proven ourselves capable in 2017 of setting up a new office efficiently and very rapidly developing client relationships and project work. So we’re looking for a strong and steady return on investment here too.”

[edmundshaw] 19/1/2018 15:02

With a larger order book there may be the need for higher working capital at some point. I am not sure a revovling facility of £3m bothers me very much, particularly if margins are maintained or improved ...

[cc2014] 19/1/2018 09:50

Initially after the CLLN liquidator was appointed on Monday construction stocks responded on the basis of statements made by the individual companies.

Kier had no liability - it went up
Balfour Beatty and Galliford were in for about £40m each and they went down


Since them the market seems to have decided that other construction companies balance sheets must be guilty by association or given the lousy job the auditors undertook maybe there are other problems. The best example of this is IRV where it fell nearly 20% intraday before recovering everything and is not higher than where it started.


So, I took a closer look at CTO and it's actual cash position. This is what is says in it's latest published 2006 accounts

"The Group’s net cash balances improved to £9.3m at 31st December 2016 (2015: £6.7m) after deducting the £3.0m (2015: £5.0m) outstanding under the revolving credit facility. This reflects the improved underlying performance of the Group and improved management of working capital.
During the year the Group renegotiated its banking facilities and now has in place a £10.0m revolving credit facility, which is committed until 31st March 2020 and a
£5.0m overdraft facility, renewable annually. Interest on overdrawn balances is charged at 2.25% above base rate, and interest on balances drawn down under the revolving credit facility is charged at 2.25% above LIBOR, fixed for the duration of each drawdown (typically three to six months).

In addition the interest payment in note 6 to the accounts is £0.1m


So, what's their average bank balance as opposed to the year end position as with net cash of £9m one wonders why they have a drawn revolving credit facility. In common with every other quoted company we must draw the conclusion that they pay December bills a day late to make the accounts look good. Standard practice.

However, we can reassure ourselves that it is nothing more than that going on by reference to the interest payments. £3m drawn revolving credit facility at LIBOR +2.25% gives an interest payment of £82k matching the £0.1m in the accounts.

Interest has to be paid on the drawn RCF whether it's used or not but we see CTO are not using the overdraft or exceeding the £3m RCF.


I would like to hope that in the 2017 accounts the RCF is no longer required and the company is cash positive for 12 months of the year.

Given £6.5m profits, less £1.3m corporation tax, £1.4 dividends, £1.5m for Eton, £1.1m for the pre-fab facility, plus amortisation of £0.3m and one off £1.4m from fraud recovery, I get a cash inflow of £2.9m, just about enough depending on the flows of debtors and creditors to get them to a position of no bank loans at any point in the year. I'm not sure how many quoted companies can say that - very few I would guess.

[cc2014] 18/1/2018 10:52

It seems we have found support at 83. Surprised it dropped so low given the statement said the financial impact was less than £100k, which is a rounding on £6.5m profit.

I guess the MM's have shaken out some sells down near 80 for whatever reason.

It's very difficult to read L2 right now and I'm not sure the MM's now what's going on with the trade flow either. WINS have increased their spread since the 9k buy at 10:36. It's very very rare to see them do that intra-day.

Hoping it means they've pushed the price down for their friends and we will see it return straight to the 90 area. Fingers crossed.

[edmundshaw] 16/1/2018 23:31

I noticed the jacket in the link CC. MVS (then in small letters) "working in partnership with Carillion". Hmm...

I agree it could have a good effect on margins medium term; and sadly some exposed subcontractors at least in the private sector, or those owed a lot of money, will be in trouble.

On the back of this, I have put some money today where my mouth - and fingers - is/are...

[junior21] 16/1/2018 13:17

In a trading update from CMS today, their pension deficit decreased from £55m to £38m. Hopefully CTO will shortly be able show a similar improvement which would be a positive.

[tuscan4] 16/1/2018 11:48

All very sad for all those involved with CLLN, but this could be a very positive event for the industry and particularly CTO. The demise of such a large player is just what supporters of capitalism have been waiting for ie Creative Destruction, which will eliminate weaker players, and undermine the CLLN business model which relied on taking on low margin contracts and squeezing the sub-contractors/suppliers.

It will also free up the labour market reducing the bargaining power of workers,possibly throw open new contracts to CTO which now urgently need completion,help enhance margins on new work now being negotiated, and if capacity in the industry is going to fall, sadly for those involved, CTO's overall bargaining position will be enhanced.

[rivaldo] 16/1/2018 11:00

Very reassuring news re the lack of exposure to CLLN.

I'm looking forward to the trading update on 1st February, especially given the "encouraging" outlook in the November update:

"There remains a clear demand for our specialist services in the markets in which TClarke operates. We have already secured £190m and £100m of our planned revenues for 2018 and 2019 and beyond, respectively, and we are encouraged by the number and quality of the opportunities that continue to be available both within our established M&E markets and from the new opportunities that we are pursuing, driven by sustained investment at national level in both technology and infrastructure. The future for the Group remains encouraging."

[typo56] 15/1/2018 11:36

RNS

TClarke is engaged as a Sub Contactor on a Carillion joint venture project with KBR as part of the Aspire Defence Contract at Tidworth, Bulford and Perham Down. We have been advised by the joint venture partner that there will be a transition for this contract and that we can expect "business as usual".

Other areas of activity have aggregate exposures of less than GBP100,000 in total.

We do not expect there to be any adverse financial impact on the Group arising from any direct exposure to Carillion.

[cc2014] 15/1/2018 11:11

hmm.

On 15/04/16 Diverse increased their holding from 8.62% to 9.xx% and from the transactions paid 90p.

It appears on Friday they sold almost exactly the same amount reducing their holding back to 8.6% and got very nearly 90p for them.

[cc2014] 15/1/2018 08:59

Whilst incredibly sad for employees and pensioners, CLLN going bust will be good news for the industry and CTO.

CLLN have been keeping margins low for years by bidding for projects at stupidly low prices and abusing the supply chain for the last 30 years.

I think it no co-incidence CTO have little to no exposure but now this work will instead go to respectable main contractors.

I expect CTO to benefit from CLLN going into liquidation. Even if there is a small hit to the profit and loss this year, long term it will help turnover and margins.

[cc2014] 15/1/2018 08:33

As best as I can tell no or little exposure.

Evidence in half year presentation where they list turnover by client and construction company.

List goes down to £1m, so assume it's between zero and £1m.


I suspect it's small if not zero and covered by bad debt provision.


I am guessing CTO had a policy of not working for them as did others in the M&E supply chain. Apparently one of the reasons Midland Metropolitan is 6 months behind is due to "designing the services". I take this as code to mean "no-one would do the design as they wouldn't get paid". NG Bailey and MVS have some involvement on this project anyway. MVS went into administration about 2 weeks ago, probably because CLLN didn't pay.

[muckshifter] 15/1/2018 08:27

I would think any exposure to CLLN is minimal. From memory, clln were not in the top 10 clients list for the last two years at least, and the number ten client was down to something like £2m turnover value to Clarke, so from £0 to a £0.5m perhaps?

[typo56] 15/1/2018 08:17

Any exposure to CLLN? SDY being hit.