Tclarke Share Discussion Threads

[rivaldo] 18/5/2018 15:52

Plenty of buying coming in, and the mid-price is up 4p today to 85p. This could be about to get interesting.

[mfhmfh] 18/5/2018 14:32

generally positive write up by Paul Scott on stockopedia.

PE ratio: 5.97
PEG: 0.45

Ranked as a 'Super stock' with a Stock Rank of 90.

GLA.

[ivancampo] 18/5/2018 13:49

Right on cue...

[ivancampo] 18/5/2018 13:48

Fascinating watching L2, lots of buys off Lse so volume about 100k more. We could be getting there. Price action has strengthened during day rather than the usual selling into a strong statement. No doubt my positivity will be dashed soon but just hoping to see that large block trade to signal the end.

[rivaldo] 18/5/2018 12:17

Last year's £11,7m cash and the £13.1m forecast cash is net after deducting the bank loan.

Fair point re the H1 cash low point - but even if you take the average of the two to be fair, the cash pile is still around £7m-£8m, which is pretty respectable against a £35m m/cap.

[gdjs100] 18/5/2018 12:07

Bear in mind cash is cyclical, with typically a much lower balance at H1 than at FY. They also have £5m of bank loans. I think the FY cash balance isn't representative of the cash balance over the year, and hence shouldn't be discounted from the price as it isn't genuine excess cash.

[edmundshaw] 18/5/2018 11:32

Good number-crunching rivaldo. Yes, on an Enterprise Value basis alone CTO is looking very tasty. Wonder what the plans are for that cash?...

[rivaldo] 18/5/2018 10:57

CTO are even more of a bargain now imo, especially as the price is from the look of it being artificially held down by a seller. Once he's out there could be a very quick rise.

CTO have now confirmed that revenues for this year are already secured. On forecast 13.2p EPS that's a P/E of only 6.4.

So presumably any new business won will further contribute to this year's outturn.

Plus N+1 Singer's forecasts are based upon 2.7% operating margins, whereas CTO have themselves confirmed they're targeting 3% margins.

Plus CTO have almost 40% of their £35m m/cap backed up by a £13.1m forecast cash pile.

[edmundshaw] 18/5/2018 09:39

Great stuff - added more today on this strong update.

[lasmo] 18/5/2018 09:19

Especially pleasing to see Battersea in the list of jobs. This is probably the biggest building project in Europe at the moment. Spread over a number of phases its forecast to run to 2026. Apple are one of the main tenants, for their European headquarters. Hence you can be sure they will demand a high spec and lots of technology, which will be right up ETON’s street. Well done CTO

[its the oxman] 18/5/2018 08:57

Been thinking that for ages. Shares should be up more today. Patience required I guess.

[ivancampo] 18/5/2018 08:53

As soon as seller clears we re-rate to £1.20 min.

[norbert colon] 18/5/2018 08:40

New N+1 Singer note this morning is very positive and cites that a rerating is long overdue. Sensible bidding plus higher margin ICT type work plus the strong order book into 2020 bodes well and I have added a few more this morning. EPS of 14.1p for 2019 gives a PE of 5.7 although this is a cyclical low margin business (albeit well managed)Looking forward to the AGM

[igoe104] 18/5/2018 08:19

These are looking extremely cheap, on a P/E of 6. its good to see the order book continue to keep growing.

[ntv] 18/5/2018 08:08

bought some today
good statement
hopefully a big increase in the dividend this year
nearly bought yesterday and now wish i had

[deanowls] 18/5/2018 07:54

Need to knock out whoever the seller is.

[cwa1] 18/5/2018 07:54

Solid if unspectacular.

[jaf111] 18/5/2018 07:10

Agreed rivaldo....

Hopefully the market will concur too!!!!

[rivaldo] 18/5/2018 07:06

Wow - what a terrific AGM statement!

Order books are up hugely since the year end. Trading is nicely in line for a miserly P/E given 13.2p EPS - and forecast revenues are already secured for this year and are going well for 2019 and 2020....



"We are pleased to report that we continue to expect revenues and profits for 2018 to be in line with current market expectations. To put those in context for the year ending 31 December 2018, these are forecast to be revenues of £300 million, underlying profit before tax of £7.0 million and underlying EPS of 13.2p. We also expect to maintain our trend of underlying positive movement in net cash year-on-year.

Our forward order book has been replenished and as at 30th April 2018 stood at £368 million, increasing from £337 million as at 31st December 2017. Encouragingly, we are seeing no lack of opportunities, but we maintain a strict policy only to bid for projects that meet our internal risk analysis and where we are comfortable with the covenant and market reputation of the contractual counterparty.

Overall, the planned Group revenues for 2018 have now been secured with some capacity in the North West and Newcastle businesses to address. Future secured revenues are £145 million for financial year 2019 and £40 million for years 2020 and beyond.....

.....Once again, TClarke has made an excellent start to the year and the Board looks to the future with continued confidence."

[ivancampo] 16/5/2018 15:49

Get ready to repeat....

[cc2014] 14/5/2018 14:46

Large institutions like the share buybacks as there is a buyer to sell their stock into should they wish to exit. I guess we are coming from different points. Whilst the buy-back is going on, there is increased daily stock volume. Long term the liquidity will decrease once the buy-back ceases.

Lloyds are buying back about £1b shares a year. Their market cap is about £50b so in 50 years if I don't sell I will own LLOY and be the only one receiving dividends. OK, not really.

From another point of view, CTO are paying about 4.4% cost of capital to the shareholders. This is much more expensive than bank debt as they don't have any (on average) but has the benefit of being long term funding.

[dozey3] 14/5/2018 14:17

Buying back shares does not increase liquidity, quite the reverse. It reduces the number in issue and increases eps. That may increase directors bonuses but does nothing directly for shareholders unlike, say, a special dividend - so you can rule that out.

[cc2014] 14/5/2018 11:23

I agree with your point Tuscan. The question is what CTO are going to do with the cash pile because it would not be good stewardship of the company to do nothing.

£13m net cash from memory rising by about £5m.

Speaking personally I'd like to see them invest it high margin profit streams and raise the dividends significantly. I wouldn't be adverse to a small buy back scheme of say 250-500k shares a year which would provide some extra liquidity but anything larger than this I'm not really in favour of as my tax situation means I'd rather dividends than capital gains.

Last years underlying EPS were 13.44p of which they paid out 3.5p in dividends or 26%. Pretty low.

This year forecast EPS is 14.1p. I think it not unreasonably to expect a payout of 33% at this point in business cycle given the cash pile, which would be dividend of 4.65p. This would give a prospective yield of 5.8% at 80p.


As an aside I believe the share price is bumbling long not doing very much due to the 14.1p forecast EPS. That's implies a 5% increase on last year. Given the problems in the SW, CTO had last year they should be raising the profits by more than that through the corrective actions they tell us have already been completed. The rest of the story we've been though a million times.

So, I will remain patient and wait to see what they do with the cash pile

[cc2014] 14/5/2018 10:28

L2 isn't telling me very much today other than someone came out and bought 30k shares this morning at 79.8. Since most of the trades were AT I suggest this means the MM's were simply squaring their position from last week fro the sells than went through around 78.x rather than the sells this morning being new sells apart from the 3000 and 6000.

AGM on Friday so whatever happens for the first four days this week will be irrelevant once we get to Friday morning.

I would anticipate the AGM announcement to be enough to ensure we go up but by how much I wouldn't like to guess. We know from past experience they will announce financials at least in line with market expectations, we also know they like to announce something else so it creates a good feeling at the meeting.

Anything positive of Friday will be enough to see us safely back to 90p but will it be enough to bust through 90p I don't know.

[tuscan4] 14/5/2018 10:18

Noticed that Servoca has elected to leave the market citing little or no interest in their company. Valued at £10m but making c £2.9m pre tax ( I have done no analysis apart from reading today's announcement) the shares are very tightly held with 80% in firm hands.
Apart from the liquidity problem this appears to be a problem afflicting many small quoted companies, particularly CTO. The only reason to hold undervalued companies(if they are never going to be properly valued by the market) is for the yield or for takeover. CTO has a decent but not exciting yield , but is clearly vulnerable to an approach.
Servoca has had to continually buy up all the stock hitting the market. Could CTO do the same? It is liquid after all.
Perhaps if any of you are attending the AGM this could be suggested publicly.