Tclarke Share Discussion Threads

[kneecaps2] 26/11/2020 07:11

They all got it wrong yesterday poor bears. Tommy has a bright future.

[jaf111] 26/11/2020 07:07

Excellent update.....certainly should see price moving back up!
No explanation re late sell-off yesterday

[jaf111] 25/11/2020 16:42

yes, late selloff not a great omen.....

[cwa1] 25/11/2020 16:36

Well the share price performance today is certainly not suggesting good news!

[jaf111] 25/11/2020 09:59

Looking forward to it, although they did an update not so long ago (1 October)!!

[effortless cool] 25/11/2020 09:45

Trading update due tomorrow.

[cheshire man] 19/11/2020 11:17

Nice jump there :-)

[cwa1] 19/11/2020 11:11

LOL, if only :-)

[effortless cool] 19/11/2020 11:06

Judging by what that has done to the share price, CWA1, you have big hands.

[cwa1] 19/11/2020 11:03

Just taken a handful more. Fingers crossed and all that stuff...

[janekane] 19/11/2020 10:33

Thanks very good informative post

[janekane] 18/11/2020 17:06

Sphere explain please

[sphere25] 18/11/2020 14:55

On breakout watch.

Price currently 89p

[cwa1] 13/11/2020 12:46

Modest but welcome dividend today

[jeff h] 13/11/2020 11:14

The company seems to be very busy winning jobs in the north as well as London:-

[jeff h] 30/10/2020 10:53

Hi Santa good to hear from you and trust that all is hunky dory with you, here is another contract Clarke's involved in:-

[santangello] 26/10/2020 13:19

Continuing great news for this gem of a company.Many thanks Jeff my good friend.I trust you are well and navigating life nicely.

[jeff h] 26/10/2020 10:44

Contract wins keep coming in:-

[owenski] 03/10/2020 09:20

Excellent cogent post CC

[cc2014] 03/10/2020 09:01

I'm not getting this folks mostly on the basis of comparative value.

My observation here is what is the opportunity cost of owning CTO? Which is more likely out of the following choice? BP. rising to 420p in 3 years time or CTO doubling to 180p? Or perhaps a large number of REITS if you don't like BP or perhaps Llodys at 27p. Or Aviva. I could go on.



Anyways here's my view on the update.

1. I'm kind of with Investors Champion on what is the profit, because what I care about is how much profit a company makes after everything. Construction companies have a habit of producing exceptional costs all for different valid reasons and a spin back through CTO's annual accounts will show they are no different.

What strikes me most though is that if the company has made a significant number of people redundant then it has already positioned itself for lower turnover or at best it contrains it's capacity to grow.

Also, why was it that in the May trading update CTO was able to tell us this years benefit and the full year benefit of the restructing but was not able to also tell us the cost of the restructing programme? Perhaps just a simple ommission... or perhaps not... Regardless we must appluad them for the speed of response to Covid and £4m of on-going cost savings per annum is a large number.


2. I'm definetly with Tuscan on the order book. CTO turnover last year was £334m so say £167m for a half year. This year first half £106m and around £134m for the second half. They are doing around £22m of work a month and replacing it with £22m of orders, which results in long term a fall in turnover to around the £250m level

3. They can't afford for turnover to fall to £250m because there are too many employees to pay. CTO's high level of employed staff is their strength when there is a shortage of labour but it's going to work the opposite way in difficult times. Other contractors will shed their subcontract labour first but CTO will is faced with a choice of either very low productivity or having to get sufficient work to keep the labour force busy. Inevitably placing pressure on margins

4. Cash. Hmm. No update on that so I assume that cash is no longer net positive

5. Nothing to do with the update but credit risk is a concern. CTO are ruthless at trying to avoid credit risk but margins are so thin...


In the end it always comes down to the order book and margins. That's 95% of what you need to know about CTO, the other 5% being the pension scheme and justification for the goodwill.

[tuscan4] 02/10/2020 17:58

The order book has already collapsed by £90m this year. As they work through these deferred orders next year, , say turnover is £330m in 2021 and new orders are £200m end 2021 order book will fall to £270m. In 2022 £300m of turnover (still working off the previously won orders) with a further depressed order intake of £200m ends with £190m order book going into 2023. I know these new orders may seem too harsh,but in the absence of one or two chunky Data Centre contracts, they will be unable to be quite so choosy..........margins will not be at 3% in these circumstances.

[edmundshaw] 02/10/2020 16:46

So you don't expect other firms will bounce back and assume that orders are permanently down?

Given that CTO are choosy in their contracts, I suspect the order book will be fine. I do not see any reason the order book should collapse by £140m over the next 12 months. Even if it did drop sharply it would surely be a one-off year.

[tuscan4] 02/10/2020 16:01

Order Book at £410m is misleading. They have "lost " £90m plus of output in 2020. If they had delivered £330m turnover the order book would have fallen to c £320m. I suspect that 2021 will end with an order book of c£270m with 2022 being a very difficult year, unless they win decent Data Centre contracts.

[fredfishcake] 02/10/2020 15:27

Edmundshaw - I agree with you in that it's a typical bit of financial journalism, where they just give a potted summary. I suspect we know more about this company than they do....but for someone who knows nothing about CTO, it's reasonable to point out that they (like most building services cos) work on a very thin margin. To their credit, CTO are trying to improve this. It's not like they tried to hide the restructuring costs either, so the implication that they did is wrong - but they need a headline! As for "set their sites" I'm hoping that's an attempt at a pun....