Tclarke Share Discussion Threads

[lasmo] 08/8/2018 13:26

Overall really pleased with the results. Margin improvement was what I was looking for. Good new on pension deficit reduction.Just a slight niggle that they aren’t picking up more prestigious contracts in Scotland. For example huge amount of building work taking place around Aberdeen airport including the new Exhibition centre.

[cc2014] 08/8/2018 08:51

Absolutely Rivaldo. Also, when you look at the make-up of the forward order book the growth in technologies where the high margin work is, is outstanding. Absolutely outstanding. A huge increase in the order book for technologies which is exactly the right direction of travel.

Here is a copy of page 6 from the investor pack




It is my view the MM are keeping the spread wide to discourage buyers as they are working orders for someone. Yesterday afternoon I could get a quote to sell 100k+ shares inside the spread at 85.625. It's the same this morning.

[rivaldo] 08/8/2018 08:19

Nice start - the mid-price is now up to 87.6p.

As regards the order book, N+1 Singer pointed out that at £370m it's "well above the long term average of £282m".

And we know that this is despite CTO's cutting out lower-margin and lower quality work.

The share price is ridiculous when you think that forecasts are for 13.2p EPS this year, rising to 14.1p EPS - and at this rate are likely to be beaten.

Plus CTO have a healthy cash pile.

Plus already fully secured revenues for this year and already 50% for NEXT year.

[igoe104] 07/8/2018 17:29

Overseas at the moment, so just popping in. Looks like we have the dark cloud of Milton hanging over us. It seems however good results are the share price won't crack 90p. PE of 6, nearly 5 million in the bank, what more can one do. Id love RNWH to take these over, so it's a win win for me. Unfortunately that's unlikely to happen, because of a recent acquisition.

[squarepeg86] 07/8/2018 17:16

Haven't had much chance to follow things today, but that was a bit of a disappointment. Read the RNS this morning and expected a decent jump up after seeing how positive it was...

[mfhmfh] 07/8/2018 16:47

generally positive write-up on stockopedia today.

[cc2014] 07/8/2018 15:29

It seems there is a large buyer. MM's happy to buy lots of stock at 85.6251

...

[cheshire man] 07/8/2018 13:44

Very pleasing HYR, a confident hold for me with a decent yield :-)

[dozey3] 07/8/2018 13:31

Post Brexit slump is being priced in, rightly or wrongly. 100% domestic market means high exposure to reduced confidence and investment. Reduced order book may be symptom of times to come, and not just attempt to increase margins.

[norbert colon] 07/8/2018 12:45

NG Bailey results also out:https://www.theconstructionindex.co.uk/news/view/ng-bailey-strategy-continues-to-deliver-profit-growth?utm_source=dlvr.it&utm_medium=twitterEqually doing well.

[cc2014] 07/8/2018 11:24

So, my thoughts on reflection. To cut to the chase I'm puzzled why the share price hasn't moved up faster this morning. Hopefully the institutions will digest them over the next 24 hours and place some orders.


Expectations are for underlying profit before tax of £7.0m. At half time they have done £3.7m. This is the first time in my memory I can remember them getting to more than 50% by half time and usually they have plenty to do in the second half.

I think it appropriate to safely assume the £7m is nailed on and it's not unreasonable to suggest it will be beaten. Hard to say by how much but £7.5m looks not unrealistic. Possibly more. Looking further forward whilst it's difficult to predict how fast they will get to 3% margin, the strategy is working and it seems likely it's not that far away. The order book is stable and I'm cool with that as they focus on improving margin. I'd like both increasing margin and turnover. It appears I may have to be a little patient for that. The broker forecasts appear to be £7m for this year and £7.5m for next year. £7.5m for next year looks under ambitious and beatable to me.

I was heartened by the improvement in pension deficit from £23.4m at year end to £18.9m, an improvement of £4.5m. The size of the deficit was starting to look a little onerous at £23.4m and it's good to see the deficit reduction plan has kicked in at last. The BOE put interest rates up in the first week of August so witherising bond yields this should further improve the situation by year end.

Perhaps a good way of looking at it is that overall net assets have risen by £8.4m in the last year, the company is turning a reasonable and improving profit whilst paying a decent enough dividend.

Rivaldo has kindly provided N+1’s note. If we take last night’s closing price of say 82.5 and remove the discount to peers this gives say 82.5/.64 = 129p a share. I guess it might be fair to knock something off for the pension deficit although I’m not sure entirely why as most companies have them. 104p looks a little low to me but then it always does when it comes to N+1 forecasts.

[battlebus2] 07/8/2018 11:00

Thanks Rivaldo seems a fair target price 👍

[rivaldo] 07/8/2018 10:55

Quite right NC - now amended :o))

[norbert colon] 07/8/2018 10:48

N+1 Singer....

[rivaldo] 07/8/2018 10:25

N+1 Singer are very positive, with a 104p share price target which they say could be exceeded.....

"Shares attractively valued

In our view, TClarke is overdue a re-rating. The shares trade at a substantial discount to peers (33%-35% on a P/E basis), despite maintaining earnings forecasts (9% and 7% EPS growth forecast), strong earnings visibility and an attractive yield at 4.4%. We believe a sector rating is justified - a blended average of peer group multiples implies a share price of 104p. We believe the shares could exceed this level as EPS and order book growth is delivered."

[edmundshaw] 07/8/2018 09:44

Chunky offload of 68,650. Someone selling into results...

[its the oxman] 07/8/2018 09:27

Should be up much more but what can you do. Surely becoming a very tempting target for somebody though.

[cc2014] 07/8/2018 08:15

Building services specialist T Clarke has returned to profit across all regions in the first half of the year as revenues rose 7% to £153.5m.


Pre-tax profit doubled to £4m in the period helped by the turnaround in the Central and South West regions.

This helped to lift underlying operating margin across the group to 2.6% (2017: 2.0%).

In London, where T Clarke has secured several major M&E related contracts for tower work, margins were held at 4%.

The capital accounts for 60% of total group revenue and delivered an underlying operating profit of £3.7m.

T Clarke’s London office has recently secured major work packages at Battersea Power Station, 1 Triton Square and Virtus Data Centre.


It is also on site at 22 Bishopsgate, 100 Bishopsgate, Bank underground station, the International Quarter London and South Bank Place.

Mark Lawrence, chief executive, said: “T Clarke has made a strong start to the year and, as announced previously, overall planned revenues are secured for 2018.

“Central and South West has returned to profitability and our core London & South East operation remains strong. We are pleased to report that we continue to expect revenues and profits for 2018 to be in line with current market expectations.

He added: “For 2019 we have already secured 50% of our planned revenues, and our market reputation for operational excellence and successful delivery of the most complex assignments underpins our optimism for the future. “

Central group costs rose to £1.6m(2017 £1.2m) and included the termination payment to the former finance director Martin Walton.

[cc2014] 07/8/2018 07:31

Bingo,

At half time EPS of 7.06p vs full year target of 13.2p.

Plus £4.5m improvement in pension deficit from year end.

Plus another £500k recovered from the fraud which is non-underlying

[rivaldo] 07/8/2018 07:28

Excellent H1 results, strong cash flow with the cash pile up to £4.7m, revenues already secured for this year and 50% for next year, strong order books, all regions now performing well....very good indeed.

And further confirmation that expectations will be met, being "revenues of £300 million, underlying operating profit £7.8 million, underlying profit after interest, but before tax of £7.0 million and underlying EPS of 13.2p".

With 7.06p EPS already achieved in H1, there must be a strong likelihood that forecasts will be beaten, perhaps even strongly.

[cwa1] 07/8/2018 07:19

Liking the look of those:-



Mark Lawrence, Chief Executive, commented



"The Board is extremely pleased with these results which demonstrate that TClarke is in excellent shape. The success of our strategy targeting repeat work for blue chip clients, sensible growth, focusing on improving margins and seeking new markets aligned to our core business, is beginning to be reflected in our results.

and

Summary and Outlook



On 31st July 2018 we confirmed the appointment of Trevor Mitchell as the Group's permanent Finance Director. In the short time since joining us, Trevor has demonstrated an excellent knowledge of the industry and its challenges and has made significant contributions to the Group.



TClarke has made a strong start to the year and, as announced previously, overall planned revenues are secured for 2018. Central and South West has returned to profitability and our core London & South East operation remains strong. 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 31st December 2018, these are forecast to be revenues of £300 million, underlying operating profit £7.8 million, underlying profit after interest, but before tax of £7.0 million and underlying EPS of 13.2p.



For 2019 we have already secured 50% of our planned revenues, and our market reputation for operational excellence and successful delivery of the most complex assignments underpins our optimism for the future.



In conclusion, the Board remains cautiously optimistic about the Group's future prospects and we look forward to updating shareholders on the progress that we make during the second half of the financial year.

[cc2014] 06/8/2018 14:56

Indeed. 85.0 to 85.2. Can quite happily sell 50k inside the spread.

[cc2014] 06/8/2018 13:33

I assume the MM's have a large buy order in as:

1. They will let me sell 125k shares at 83.0p on instant fill
2. Everything coming on the order book at 85.0 is ripped off instantly
3. Anyone buying even just 5k shares is being made to pay pretty much the full offer
4. They've opened up the spread and WINS have changed their spread this morning a couple of times. It's now 8 about 3 higher than usual

Or in my alternate universe the house broker N+1 Singer has some sense of the results and knows that whatever they can pick up today they can shift on tomorrow at a profit. These things don't happen do they?