Tclarke Share Discussion Threads

[middlesboroughfc] 13/9/2021 14:28

Investors Chronicle

Trevor Mitchell adds that TClarke’s “long pipeline of data centre projects is worth billions and the company is actively bidding for £300m of contracts for delivery in 2022/23.”

[zingerburger] 13/9/2021 13:55

This one wants to kiss 200p methinks, before too long i suspect

[zingerburger] 13/9/2021 09:52

On way now

[zingerburger] 13/9/2021 09:34

Going up. Chart not updated on ADVFN weirdly

[nw99] 13/9/2021 08:54

The next Volex here

[onjohn] 10/9/2021 16:30

Nice tick up

[edmundshaw] 08/9/2021 14:12

Thanks zb, great reading! :))

[zingerburger] 08/9/2021 08:55

id love a fancy breakfast lol

see VLX going nuts

[santangello] 08/9/2021 08:43

Does make lovely reading over my eggs benedict this morning, even though I have been referencing it since it was published a few days ago.Very comfortable holder here :)

[zingerburger] 08/9/2021 08:34

Building services contractor TClarke (CTO:133p) is primed to not only deliver a bumper second-half trading performance, but the group is converting its pipeline at such a rate that the earnings risk looks heavily skewed to the upside for next year, and beyond.

Buoyed by a record order book of £503m, of which £200m is for delivery in the second half with a further £250m slated for 2022, and a bid pipeline exceeding £1bn, chief executive Mark Lawrence sees potential for TClarke to exit this year at a revenue run-rate of £450m. Moreover, he also revealed during our results call that one of the group’s three large data centre projects (aggregate value of £110m) could bring in an extra £30-40m of revenue by the time it completes in the first half of next year. Finance director Trevor Mitchell adds that TClarke’s “long pipeline of data centre projects is worth billions and the company is actively bidding for £300m of contracts for delivery in 2022/23.”

TClarke’s environmental credentials are serving it well as property developers look to install smart technology into their buildings that can connect a building’s control systems via a ‘single pane’ to reduce energy consumption, cut operational costs, lower carbon footprint, and improve return on investment. The group has 18 such projects in its burgeoning order book. The uptick in demand for its specialist services is also being seen country wide. Lawrence highlights infrastructure (schools and hospitals), engineering services, offices and hotels as the sectors driving demand.

Factoring in a second half weighting, analysts at house broker Cenkos Securities expect full-year pre-tax profit to rise from £5.1m to £8m on 46 per cent higher revenue of £340m, and are pencilling in a step change in profits to £11m on revenue of £380m in 2022, a forecast that is increasingly looking conservative.

On this basis, expect earnings per share (EPS) to rise by 50 per cent to 15.5p this year, and increase by almost 40 per cent to 21.2p in 2022. Shareholders can also bank on pay-outs of 4.4p and 4.7p, respectively, implying the shares are priced on a forward price/earnings (PE) ratio of 6.3 for 2022 and offer a prospective dividend yield of 3.5 per cent. That’s an attractive rating for a well-funded business that is riding a UK investment boom and one that has substance. To put the undervaluation into perspective, the average PE ratio for peers is 9.7 based on 2022 forecasts.


Strong buy.

[squarepeg86] 07/9/2021 13:29

It's certainly been a long time coming. Happy to continue to hold here, hopefully this is just the beginning.

[nw99] 07/9/2021 13:03

Chart breakout

[santangello] 07/9/2021 11:40

Well said, and nice reward for the patient long term holders (like me) and exciting times for those entering since Monday....the future looks very interesting here indeed.

[edmundshaw] 07/9/2021 11:30

Rerating has been overdue for some time. We are finally being rated on future prospects in a quality tech service business not just on an historic earnings ratio for a random business in the cyclical construction sector.

[santangello] 07/9/2021 11:13

Many thanks Zinger.The more I read into the CTO business model, the more I can accept the rerating here.....

[iandippie] 07/9/2021 10:58

I generally stick to whatever scsw put in their virtual portfolio. Although cto is not in there yet, they have suggested they will be adding cto and also xar. Can't argue with 500% gain in 6 years. :-)

[dr biotech] 07/9/2021 10:29

FWIW I'm also in from yesterday at 147. I bought solely on the back of the tip - I was a bit unsure whether to pay the "tip premium" but generall for me its been worthwhile. Having said that I'm down a few pence on one of the other tips, and down more significantly on a couple of others that I bought on the first day after previous editions (but up on more).

Sometimes the rise can give a bit of momentum to the share price and trigger a wider rerating, though ultimately the company has to prove its worth it.

[thorpematt] 07/9/2021 08:28

simmsc,
Fair point, well made. Ordinarily I'd apply lower PERs to contractor stocks. This is due to volatility of revenues and low op. margins.

I think historically CTO is just any other contractor. More recentlyit hasa made transitions to become a company with greater barrier to entry, and therefore a moat, this not only enables growth opportunities but allows a greater margin and a much lower probability of a loss making contract hitting the bottom line.

For me it therefore warrants much higher PER

I haven't read any of those tips articles so I apologose if my pst re-iterates anything to anyone who has (It may not of course) but that's the way I see this stock.

normalised fPER for 2022 I have at 21p...so a fPER abut 7 for a company in a growing market!

DYOR but for me that's tidy and a mid term hold.

[johnrxx99] 07/9/2021 07:13

Picked this up from the TMI tip. Took a while and nice to see it happen.

[dougmachin] 06/9/2021 23:23

johnv 6 Sep '21 - 17:40 - 4025 of 4027

It is same editor for both tipsheets!

- Nope.

[simmsc] 06/9/2021 21:06

It did indeed pop today! Historic low PE ratio (due to low operating margin mainly) will be hard to break out of. Average PE since 2015 is about 7.5. Only a few times did it very briefly manage to pop above PE of 10 and then came straight back down again. I hope for those that have bought that it can break out of this narrow\low PE ratio range and rerate.