Tclarke Share Discussion Threads

[profdoc] 11/11/2015 15:30

I analysed the company for my subscribers last week (after buying myself)
My report ran to 2845 words so I cannot reproduce it all here, but these are opening few sentences:
TClarke – a share for my modified cyclically-adjusted price earnings ratio portfolio
TClarke installs the electric wires/equipment, mechanical items and ICT stuff in buildings. It suffered during the long recession as the building of office blocks, public sector infrastructure (e.g. railway stations) and shop refurbishments was curtailed.
Its profits fell year by year.
Now that its 1,200 staff have demonstrated their ability to deliver the most sophisticated electrical and mechanical workings of modern buildings, and survived the recession in fine fettle, it is set for a revival in fortunes.
During 2014 client attitudes switched from a focus of trying to push down tender prices from sub-contractors to an emphasis on gaining the cooperation of the most reliable high-expertise contractors to help finish off their building projects. This presents a great opportunity for TClarke to improve margins.
Being in property development myself I know the importance of having people you can trust doing the electrics etc., even if that means paying more.
Reliability and capability are important in both booms and busts. The only difference is that the best are in greater demand in booms – if you want them then, first you need good relationships built on long-tested trust (both ways); second, you’ll have to pay more. TClarke will benefit from this swing in the pendulum.
Price earnings ratio
I’m not interested in the PER used by most share buyers. It has been shown that using the average earnings per share over a 7 to 10 year period, rather than simply last year’s eps, leads to superior share selections (see Newsletters: 26th January, 4th February).
This is because this measure incorporates earnings figures from a number of different macroeconomic and industry conditions. This allows us to examine data that might shed light on the likely earnings power of the company in the long run. It moves us away from examining the company at singular points in the economic cycle.
In the case of TClarke we see a company that performed extraordinarily well in the period up to the financial crisis, but which then faded.
So long as the capabilities and market competitive advantages are still in place we have the distinct possibility of a reversion to the mean in earnings.
Mr Market puts little weight on the long term picture of a company like TClarke – he is currently depressed about TClarke, pushing the share from over £2.50 in 2006 to only 79.1p (MCap: £0.791 x 41.4m = £32.7m) today, as he focuses on the short term earnings numbers.
Last time I looked the average UK share had cyclically-adjusted price earnings ratio, CAPE, of around 13 or 14. So let’s compare that with TClarke’s earnings numbers:

[cc2014] 11/11/2015 13:29

It's interesting that people are buying before the interims next week. Usually means something

[ivancampo] 11/11/2015 08:48

Breaking out this morning, re-rating on!! Hopefully we'll see Directors buy on next statement to further underpin price.

[gargoyle2] 10/11/2015 17:23

I'd like to see some of the executive directors buying shares here. Other than a bunch of options, the CEO and FD have hardly ever dipped their hands into their pockets to buy shares. The only one with any skin in the game is Robson, the guy who was appointed at the start of the year, who has around 1.3 million shares.

[sspurt] 10/11/2015 16:10

Frankly I think this stock is a steal but it does need a catalyst to get going before 2016. Whether next weeks update can provide it remains to be seen but management have said the fireworks will not start until next year.
I like the long term market positioning and time horizon adopted by management and I also like the outlook for the next 24m which promises to bring a substantial margin uplift. The balance sheet is pretty strong and if they keep plugging away and don't get deflected by hair-brained schemes started by over-excited management teams with eyes only for their compensation packages we should do pretty well. And there aren't many punters interested...
I am happy to be patient.

[cc2014] 08/11/2015 16:46

Positives:
Sector improving
Order book at an all time high and rising
Legacy contract issues depressing the share price dealt with
Cash position fine with lots of headroom on bank facilities
Margins so low as the only way is up
Dividend 4%

Negatives
Up front costs on new large projects coming onstream may depress profit this year (depending on how they account for them)
Pension fund deficit unlikely to be any better given how much general markets have been under pressure
New large projects coming onstream likely to suck out cash


Our you could look at this way. In 2006 when the share price was 250p, turnover was £186m, profit was £7m and dividend was 11p.
Turnover likely to be £225m+ this year. Profits at say £2-3m this year then increasing rapidly. Balance sheet will repair itself as profits convert to cash in due course.

And finally I like the way it's slowly diversifying away from pure construction to add some multi-year maintenance contracts to its portfolio. I hope they do alot more of this as it's creates long term shareholder wealth


This is the biggest shareholding in my portfolio by a long way.

[ivancampo] 06/11/2015 22:59

Miton seems key to add though, they've been increasing in weakness. Anyone else expecting a re-rating? Company website latest news continues recent positive vibe.

[cc2014] 06/11/2015 19:42

The buys over the last few days suggest people want in before the interims and they couldn't get the stock at a lower price.

Someone has been selling (Henderson through Winterfloods???) for months until about 10 days ago and holding the price back.

We now seem to have buyers over 77p and the bid is creeping up slowly.

[ivancampo] 06/11/2015 15:02

Update 19th Nov, hoping for more positive news to take this up a level.

[spooky] 10/9/2015 10:53

There has been a reasonable stream of sellers, the shares are going up IMO.

[gargoyle2] 10/9/2015 09:45

Looking firm today, despite going ex the 0.5p dividend. If we can crack that 80p resistance, we could be away

[nehpets81] 11/8/2015 12:05

Looking at the cash flow statement, I would say all the spare cash is being used in the ramp-up stage for the new big contracts om London. A dividend hike would be a bit reckless at this stage imv.

[ivancampo] 04/8/2015 11:54

Will be in the 80's by close of play

[cc2014] 04/8/2015 10:46

I would suggest no hike in the dividend is pretty disappointing

[spooky] 04/8/2015 10:33

Everything that i am hearing from the construction industry is very positive, in my opinion i would focus on the margin expansion.

[wjccghcc] 04/8/2015 10:08

You can look at it as glass half full or glass half empty.

Negatives: Scotland slower than expected, problem contract in SW division, large cash outflow

Positives: London growth, order book, margin improvement from 2016

[sspurt] 04/8/2015 09:59

Nothing in the figs to get too excited about. Margin improvement is happening but looks like it won't really kick in until 2016/17 when the old low margin contracts have expired. Need a little more patience on this one but happy with the direction and confident it will get there.

[ivancampo] 04/8/2015 09:40

I agree, expecting a turnaround and a positive next few days.

[spooky] 04/8/2015 09:29

Well i have obviously missed something when looking at this mornings figures. They were probably better than my expectations, with a positive outlook, but there has been a constant flow of small sellers. Would someone like to tell me what i should have seen.

[sspurt] 20/7/2015 15:24

Figs due 4th Aug :)

[sspurt] 19/5/2015 10:05

I suspect Gervais Williams is trying to invest some of his money from the recent launch of the Miton UK Microcap

[cc2014] 18/5/2015 19:19

I can do boring every day of the week if the price goes up. In fact I like it as it gives me time to reflect and think. I have plenty from lower down (43-53p).

For once I am so comfortable with the future of this company I'm not inclined to trade in and out on the spikes. I think 250p may even be pessimistic given the current turnover.

Edit: wonder whether the rise is poorly executed dividend reinvestment?

[ridicule] 18/5/2015 15:48

cc2014 This fell heavily, as you know,when the contract issues arose and I picked up a lot around the 50-55p. Then they stagnated for months until the trading statement took them back up to the 70s. I bought some more then but it has been a pretty boring share since, until the last few days. There are punters who have sharescope who set alarms on any stock with potential that starts to move. I suspect this brought a number of PIs in. I am holding for £2.50 but it could go higher because they now have a National footprint and are winning much larger contracts than a few years ago.

[battlebus2] 18/5/2015 13:14

Could we have got a mention in any weekend press ?