Tclarke Share Discussion Threads

[norbert colon] 10/10/2018 07:22

SEE go into administration:https://www.constructionnews.co.uk/companies/administrations/me-firm-enters-administration-after-20m-growth/10036022.articleHopefully some of their work will come our way.

[cc2014] 09/10/2018 09:35

Looks like T Clarke head office will be moving at some point in the future. I assume they lease it.

[cc2014] 08/10/2018 11:55

Link here:

I think the opportunity to get in at these levels is now time limited and a jump in share price will be triggered by the Mello Event or the trading update on the 29th November. Maybe it will move before as investors do their research before the Mello event but I think it more likely that meeting and hearing the CEO and FD is likely to have far more of an impact.


The UK stock market is struggling at the moment, with FTSE down a bundle of points over the last couple of weeks. I have a number of stocks where good news has been released but the market response has been muted. The large buyers who use the order book seem able to sit on the bid and wait for the sellers to come to them. They therefore have little incentive to pay the offer price.

Today things seem different and the selling that went on and on last week has stopped. The algo bots seem to be slowly walking up the bid as the sellers aren't coming to them. Today is one day in history though and whether it's a permanent change in pattern has yet to be seen.

[igoe104] 06/10/2018 11:53

Good to see these on the mello list in London next month, With CTO low p/e and fairly large cash-pot, and decent Divi, a lot of those canny investors should be interested in these.

[cc2014] 28/9/2018 08:20

Miton are selling. RNS's as follows.

12/07/16 starting point 7,385,611 17.66%
11/01/18 7,166,611 17.13%
29/06/18 6,818,221 16.30% - selling really starts here
03/07/18 6,056,923 14.48%
05/07/18 5,790,137 13.84%
05/07/18 5,488,041 13.12%
23/07/18 5,090,660 12.17%
25/07/18 4,521,777 10.81%
26/07/18 4,178,775 9.99% - thought they might stop here. They did for a month
07/09/18 3,539,847 8.46%

Regent are buying. RNS's as follows.
03/07/18 1,440,000 3.44%
18/07/18 1,750,000 4.18%
25/07/18 2,585,000 6.18%
31/08/18 2,966,234 7.09%
31/08/18 3,466,234 8.29%
25/09/18 3,813,036 9.12%

[deanowls] 27/9/2018 18:25

Who is selling tho

[tuscan4] 27/9/2018 16:32

Interesting to speculate as to where the price would be if Regent was absent. In the 60's?

[cc2014] 27/9/2018 11:00

I really do shake my head at how easily Regent are able to buy this level of stock and how little attention is being paid by the rest of the market.

Their 25k iceberg order at 81.6 filled this morning so they moved to 81.0. Now they are at 81.2 as well.

Mostly the icebergs are 150k, sometimes 100k, sometimes 50k.

It looks like this at the moment:

[rivaldo] 26/9/2018 23:02

Worth noting that Regent Gas have again increased their stake - they now have 9.12%, or 3.813m shares:



That's around 350,000 shares more than just two weeks ago.

[cc2014] 26/9/2018 13:36

Thanks. I'm in agreement with you Tuscan about being too pessimistic about margin and dividend growth. I wanted to show in the modelling that even on a cautious basis the share price looks too low.

In relation to the deficit in the pension scheme I didn't go into details. We both know rising interest rates and bond yields will significantly pull back the deficit. Of course the faster this happens the lower the amount T Clarke will have to put in as additional contributions. There must even be a scenario where bond yields rise to such a rate that the with the additional contributions, the asset value overshoots that required to support the liabilities.

The latest inflation and retail sales figures have surprised the city last month and markets are now pricing in rates rising much faster than previously thought. The evidence of this can be seen in bond yields and savings rates which have moved already.


Lasmo - your comments about the "commodity contractor" to "quality engineering services provider" hit the nail on the head really. T Clarke have always tried to differentiate on the basis of employee skills but it's evident management are actively focusing their resources on higher margin business

I do think the things the management have put in place over the last 3-5 years are going to start showing through in the financials very shortly. Indeed with a £4m profit at half time vs expectations of £7m, I'm sure some of it is going to show through this year. The trading update on 15th November should give us a clue.

[lasmo] 25/9/2018 17:16

CC2014 Thanks for your assessment.
I don't think the Miton selling is the full picture. I think the share price is being held back for a number of reasons:-
1) Brexit uncertainty
2) Currently, a low margin business
3) The pension deficit
I believe that CTO is transforming itself from a "commodity" contractor into a quality engineering & services provider. The strategy the management have put in place will deliver this. This will completely change the way the business is valued.

I bought these shares as a long term income provider. I'm not interested in what the share price does in the short term, only to say that my fear is that CTO may become an acquisition target, before the market realises its true valve. Hence Miton selling out should be seen as a positive. They would surely give their support to an undervalued offer should a Buyer appear.

[squarepeg86] 25/9/2018 12:50

There's nothing I can add to that but thanks for sharing CC2014.

[cc2014] 25/9/2018 09:47

Post #2769 highlighted to me just how inefficient the stock market has become. In any normal environment the recent success at Kier and Galliford would have had a positive impact on the share prices of the rest of the sector. Clearly that isn’t the case here. Miton selling out is clearly holding the share price back.

It motivated me enough to write my thoughts up. Link below:


Comments appreciated.

[cc2014] 20/9/2018 12:43

The share price on this appears to have hit a new level in the value for money stakes.
Kier up 20% in about 10 days, GFRD up 12% and CTO if anything has gone in the opposite direction.

Pretty clear evidence this is completely off the radar and the big funds aren't scooping up the shares on the basis of T Clarke's peer group. I guess we will have to wait for the profit figures to flow through as they can't be ignored forever.

[igoe104] 17/9/2018 07:28

Another Project announcement on Friday.

Chris Harris
@tc_scotland

Another great project win for our Residential Plumbing and Electrical teams - and another great site for Robertson Homes in Auchterarder

[cc2014] 11/9/2018 12:19

Thanks for that Tuscan. I must buy a copy.


Miton at the peak held 17.6% of the shares. Too many imho as this was always going to cause them liquidity issues if they wanted to exit their position.

I can therefore see the rationale for them reducing this to 10%. From memory they acquired about 3% of their holding at around 53p so they've made a decent profit on those. I don't know what they paid for the rest.


We can see from the trades the prices they have disposed of these shares. The first 7.14% of their holding they sold at various prices between 80.5 and 82p. This took place between 29th June and 26th July, so over the course of a month. Then nothing until Friday last week when they sold at 83.5p. This kind of suggests that it's not about selling their holding at any price but they've got a price they want and if they don't get it they are prepared to wait. The wait of a month and the rising price may suggest they will let the next lot go for 85p or whatever. That's conjecture though.

I think regrettably it looks like they are going to continue to sell. They retain 8.46% at the moment split between two funds. The one fund holds 6.19% and hasn't sold any so far. The other fund holds 2.27% now and held 9.12% before the selling started. Whether there are different fund managers for each fund and the selling stops at 6.19% remains to be seen.



So, why are they selling? Since the start of the year the FTSE has fallen from 7800 to 7240, a reduction of 7.2%. In the same time CTO has risen from 78.75p to 82.2 today. We also had a 2.9p dividend and another declared at 0.66p which is more than the FTSE100 average of around 4% per annum.

Ignoring the dividend to make the maths easy. CTO up 4.4%, FTSE down 7.2%. Miton may perceive there is better value elsewhere.

I don't agree of course, I think CTO will outperform the FTSE for a number of years to come but I could understand this train of thought. Best to run you winners and not keep switching as that chews up trading costs.


Finally I don't think CTO's in-house broker is doing much to help. That's another debate.

[tuscan4] 11/9/2018 11:16

Very interesting Investor Chronicle article last week , highlighting F -Scores. CTO made the list of 40 candidates, listed by market cap.
In my opinion if they had been listed in order of cheapness CTO would have been in the top 5, or even at the top.
There were 6 valuation measures of which CTO scored 4 (there was one other with a score of 5)

One measure it failed on was Price/Book Value, perhaps understandably since there are few fixed assets in the company, and Dividend Yield which apparently required 4.8% or above to qualify. CTO should be at this level for 2018. So in reality CTO scored at the 5 level equal top.

It showed cash of £5m which may understate the true position.
This reinforces my view that CTO is fundamentally a VERY cheap equity. Why then has Miton ,for long a patient value investor inexplicably reducing its holding. What do they know that we don't?

[norbert colon] 10/9/2018 15:59

Regent Gas up to 8.3% now.

[cc2014] 07/9/2018 15:42

2 x 500k trades. Matched I assume.

Regent & Miton at it again?

[igoe104] 06/9/2018 08:13

Ex Divi today.

[cc2014] 05/9/2018 08:42

At the same time, Procure North West also launched a services framework; this M&E and building services works across the same five regions with jobs ranging between £50,000 and £10m. The winners for this framework are:

Dodd Group
Interserve Engineering
James Mercer Group
Logic Electrical
NG Bailey
Proline Group
Seddon
T Clarke

Of the £400m the second lot for M&E and building services is the larger so say £300m of work for the 6 contractors over 4 years.


Another link here

[cheshire man] 03/9/2018 16:34

Regent Gas Holdings increases stake :-)

[igoe104] 01/9/2018 09:03

More work won.

Chris Harris
@tc_scotland

Good news for our M&E team, who have secured M&E works packages at the new £78 million Forth Valley College Falkirk Campus