Tclarke Share Discussion Threads

[eagle eye] 12/2/2020 12:39

Yesterday I questioned the FD at length about pension liabilities.
Currently it stands at £26m, and apparently the company contributed £1.5m towards the fund last year.
The PER based on earnings does look cheap, but the pension liability needs to be included in calculations.

[f15jcm] 12/2/2020 11:51

Many thanks for the update. Any comment about wage inflation as a result of Brexit(fewer migrant workers)? Will be the same for all players so it's not of massive concern to me but it is a consideration.

Agree with your investment perspective. Given the valuation and cash position, the only real downside comes from them screwing up a project but that's the nature of the sector and these guys seem to have a good track record (unlike some).

[tuscan4] 12/2/2020 11:01

Thanks CC2014. Very helpful comments.
Was anything said about the Data Centre hoped for contracts?

[cc2014] 12/2/2020 10:32

f25jcm.

I had a very enjoyable day yesterday and remain confident about my position with T.Clarke. You ask a very broad question and I would recommend you find an opportunity to talk to the directors yourself, perhaps at the AGM or I'm sure they will be available at another event.

Where to start. Well, you will already know the forecasts in the public domain which are for a 2021 P/E of below 7, a dividend yield of 3.9% and net cash by then higher than it's current value of £12.4m. This matched with the near record order book gives confidence this will be delivered.

These forecasts were made before the Gooee investment, the uptick in construction PMI's and yesterday's HS2 announcement. So, P/E of less than 7 along with net cash looks cheap to me before we consider our new opportunities.


So, what of Gooee. Strategic part first. All my own thoughts. T Clarke has been in business 130 years and during that time has done some memorabale projects, Olympics in 1948 and 2012 and the O2 to name a few. To stay the leader in your field you have to be the first (or nearly the first if you prefer) to innovate, because otherwise someone else will come and take away your lead and your market share.

About 10 years ago T Clarke bought a Mechanical contractor and now many (most?) of their large projects are joing M&E.
About 3 years ago T Clarke set up an offsite manufacturing facility
About 18 months ago T Clarke bought Eton
Now we have Gooee.

Each time it gives T Clarke an added value propostion to their Clients, enables them to stay as the innovator in their field and take market share off others. Clients are prepared to pay extra for the most up to date installation, built to a better quality with a lower on-going running cost.

So, it's my view we should perhaps view Gooee in the same way. It's going to enable a building manager to see exactly where they are using their resources (and who is using them) over time in one interface. It will know for example an air conditioning system isn't operating as efficiently as it used to and that action is required before it fails. It will also know where and the flow of people in the building and therefore to adjust heat and light. It's going to drive carbon reduction, leisure and working environments. It will enable building managers to put forward better evidenced business cases for investment in far less time than it does currently.

One the one hand Gooee is an added value propostion to T. Clarke's existing client base, but it's also enabler to broaden the client base. It's not clear to me which is greater of these two, but to end on a rather flippant note, on a prospective P/E of less than 7 I don't need to think that deeply as the existing business looks "inexpesive" at a share price of 130p, and any additional sales/margin improvement from Gooee which could be very substantial seem to be "for free"

Recommendation: Double up!

[stevesham] 12/2/2020 04:45

abarclay post 3530

Old news from 3 years ago, solid growth company with excellent management and fantastic forward order book, this event has gone, monies (at least £1.43m recovered)

[abarclay] 11/2/2020 20:00

I am very disappointed we had to report the discovery during the year of a significant fraud at one of our subsidiary companies. The management response on discovery of the fraud was swift, decisive and appropriate. An independent and comprehensive review of our internal controls and procedures was commissioned immediately. As a result of the review, a number of recommendations were made which will further strengthen our controls and are in the process of being implemented. The Board is satisfied that the fraud was limited to the subsidiary company in question and that the full extent of the fraud has been identified. Legal proceedings are ongoing.



did they recover anything

[f15jcm] 11/2/2020 19:14

Anything to report from the event CC?

[edmundshaw] 08/2/2020 10:32

Good news, Cheshire Man, and thanks!

[cheshire man] 06/2/2020 10:49

Builders’ Conference reports 33% rise in monthly orders

[cc2014] 05/2/2020 14:37

The directors have done a really good job of increasing awareness of this stock and thus the liquidity and spread is good for a market cap this size.

The advertised spread averages around 2-3p and is usualy no worse than 4p and sometimes as tight at 1p. The real spread is always tighter than that. Today it's advertised as 130-134 but trades are 131.1-133.4


I guess Mr. Market is looking for some new news on T Clarke now before the next rise. Not sure why. The trading update showed an order book at £403m vs an all time high of £411m which means the next 18 months of work has been secured against a backdrop of a very passive construction market the last 6 months. Construction PMI and market is picking up now so directors will now have a choice as to whether to drive turnover or margins. Knowing their conservative nature I think it's likely to be some of both.

And then there's the tie up with Gooee which is very difficult to value from a distance. Eton which they invested in 18 months ago has gone well so I'm expecting mroe of the same.

I'm at the Shares/Cenkos Growth and Innovation Forum next Tuesday. Hopefully I'll have a chance to find out a little more about how the directors see the growth potential with Gooee.

[f15jcm] 04/2/2020 15:39

Bought another 10k shares. Surprisingly easy to come by.

[f15jcm] 31/1/2020 20:13

Possibly but I believe KIE, GFRD & COST have exposure to HS2 which is now looking likely. I used to hold COST but sold out on the last profit warning. It has recovered well.

[cc2014] 31/1/2020 15:39

hmm. Kier up 5% today. Galliford up 5% too.

131.7 to sell and 134.0 to buy.

A bit hard to say but given the volume of sells that the MM have absorbed looks like they are accumulating stock for someone to me.

[mfhmfh] 30/1/2020 14:08

A not too demanding PE of 10 would be a share price of 175p.

[f15jcm] 30/1/2020 13:38

The only thing I could find not to like here was the pension deficit but it wasn't enough to put me off. The valuation for a net cash business with everything heading the right direction is very attractive. An eye on industry drivers (carbon reduction) is a sign of astute management. No exposure to highways which is a blessing. I'm in!

[podgyted] 30/1/2020 13:07

Cenkos says it was £2m.

[cc2014] 30/1/2020 11:22

Hi Graham.

"The Group's cash position remains robust, with the year-end cash position at GBP12.4m (2018 cash GBP12.4m).

The deal will have been signed in the last day or so as T Clarke has a duty to inform the market with reasonable speed.


I would have thought the Gooee have asked for the value and percentage not to be disclosed. In the meantime I assume "small" to mean "nothing that significantly affects the on-going cash position of T Clarke". Perhaps a million or two. Perhaps not even that.

The Eton investment 18 months ago which was disclosed was £1.5m plus earnout if that puts things in context

[texaspete2] 30/1/2020 09:05

Great update today. Net of cash in bank the mkt cap is 45m. Annual profits of 10m this is incredibly cheap. I'd snap this up if I had the cash :)

[cc2014] 30/1/2020 08:17

Some really good stuff on Gooee on T Clarke website




And a video explaining what Gooee do

[effortless cool] 30/1/2020 07:57

A slight miss against broker consensus of £340m revenue and 17.7p EPS. Revenue was also below my own forecasts, but EPS and net cash were marginally ahead.

Outlook statement very positive but 2020 currently looks likely to be similar to 2019, rather than materially better.

I don't expect this announcement to do much for the price, but it does set a solid foundation for the next leg up.

[santangello] 30/1/2020 07:54

Cheers CC2014....

[cc2014] 30/1/2020 07:52

Profit beats by £0.2m (which is quite a bit when expectations were a rise in profits of £1.2m and you deliver £1.4m)

Cash beats by £2.4m (which is massive)

Order book up £42m (which is 11.6% in 2 months which is massive)


A strategic investment and partnership right in the sweet spot of what needs to be done for climate change


And you guys want to talk about whether Miton have any shares left to sell? For info Miton starting selling in Jan 18 when they had 17.7% of T Clarke. By Mar 19 they went below 5% so it's no longer notifyable. I know they are lower than that now and possibly zero but market opens in 10 minutes and don't have time to get my notes out. I doubt they have any left, maybe a few hundred thousand.

[santangello] 30/1/2020 07:45

Looks like Miton currently hold 4.94%.