Tclarke Share Discussion Threads

[rimau1] 13/7/2023 09:49

Dunns - the order book needs significant working capital and equity is now cheaper than debt financing. I’m ok with this looking at the bigger picture. I also suspect behind the scenes potentially some of the new orders stipulated that TClarke strengthens its balance sheet. Bottom line is if TClarke executes and becomes a £600m business it is very cheap. Add on any dips maybe?

[dunns_river_falls] 13/7/2023 09:23

Seems a bit daft to issue shares at a discount to raise funds, then announce a dividend the next week.

[igoe104] 13/7/2023 07:23

I'm alittle bit underwhelmed with H1 numbers, looks like everything is geared for H2.

[edmundshaw] 08/7/2023 16:02

Rights issues are expensive, so for smaller sums placings like this are normal and sensible. But the discount does seem a bit steep for such a quality company. On the other hand taking on more debt at current interest rates would also not be that cheap if the business growth means that Wip grows and the debt cannot be paid down in a year or so...

[tomv33] 06/7/2023 20:42

Why did the directors raise 11milliom ... they should of stopped paying dividence to raise cash!

[rivaldo] 06/7/2023 11:45

The core business is going great guns and needs funding to finance the growth. Fine. But the discount to the share price is too great to stomach easily. Let's hope those who didn't get enough stock due to the oversubscription come into the market to buy up stock.

Prospects look terrific with, as Cenkos state, "government backed investment in infrastructure, the move to net zero and the significant expansion in the Data Centre market)" plus healthcare and the move to smart buildings generally.

Cenkos conclude:

"View and current trading:

Alongside today’s placing announcement, the group has confirmed that trading since the last update (10 May 2023) has continued to be strong, with the order book increasing to £781m, a sharp uplift to the FY22A position of £585m. It is also £4.5m cash positive as at 30 June 2023. There has been a step change in the growth of this business in recent years (with a record year of growth delivered in FY22) it has deep relationships with its client base (90% of its contracts are with repeat clients and (or) principal contractors) and the order book provides the group with excellent visibility. BUY"

[igoe104] 06/7/2023 10:08

Broker summary. CENKOS.

TClarke has announced an oversubscribed placing to raise £10.7m (gross) at an issue price of 122p. The funds will be deployed to capture and deliver identified contract opportunities in the London region, alongside strengthening the balance sheet. These new contract opportunities are expected to materially enhance profitability, with higher operating margins reflecting the benefits from enhanced economies of scale. On our revised forecasts, the group is trading on a FY24E PE of 6

[johndoe23] 06/7/2023 09:21

This was clearly going to drop today. Good chance 122p will be possible in open market anyway

[pugugly] 06/7/2023 09:18

All depends on inflation clauses in the contracts already won. If not strong enough can see possibility nay probability of major reduction in profits in next year or so - Remember construction trade currently in midst of major supply inflation.

[edmundshaw] 06/7/2023 09:08

Well, if the share price carries on like this, I will get my 122p myself. This happens quite often, but only after a sizeable discount on the placing. TBH I agree that longer term it is probably no big deal.

[volsung] 06/7/2023 09:08

Sneaky placing. I’m out. Dilution. Its not value anymore

[igoe104] 06/7/2023 09:00

Group CEO Mark Lawrence confirms successful placing of shares to fund ongoing strong growth story.

Funding immediate opportunities for controlled growth and increased profitability

Hard work has presented us with very significant and valuable contract opportunities in our target growth sectors that we expect will materially enhance Group profitability, with higher operating margins reflecting the benefits from enhanced economies of scale.

☆ Too much short term thinking in markets today, folks need to look at the bigger picture...

[owenski] 06/7/2023 08:54

They've added 10m to the market cap which looks like balance sheet funding for a rapidly increasing project work load and future order book. Looks like a positive to me and quickly done and dusted, most shares going to one institution.

Shame about the discount, but there it is.

Likely to do well when the dust settles IMO

[igoe104] 06/7/2023 08:35

Your loss. They have picked up alot of smart hospital contacts, and data centre work in the last few months. Over the next few years the figures are going to look very rosy.

Too many investors think to short term..

I suppose its difficult to raise single digit figures in this higher interest rate environment..

[edmundshaw] 06/7/2023 08:34

Understand the need for cash, but a the discount seems high. I have seen this kind of cash raise for a good company at almost no discount at all. 14% seems pretty poor. Is it really so hard to attract more investment from shareholders? I would have gone for an 8% discount if they had asked me...

[tiswas] 06/7/2023 08:30

But why the big discount if it was oversubscribed?

Why are retail shareholders ignored and diluted?

Are directors taking part, don't think they own a lot of shares from memory?

They may do very well but I no longer have confidence in management to look after my interests so sold out at 137p.

[igoe104] 06/7/2023 08:30

This day of an age, investors only think short term. They have won loads of contacts recently, so obviously need more working capital. And this environment you not going to raise cash in single digits.

[simski99] 06/7/2023 07:54

Yes, but when you are working on big projects with an expanding order book, you need more cash resources to be able to fund the business. There will be some very lumpy payments that CTO would have to manage, in and out. This gives them the flexibility to manage that more easily.

[dr biotech] 06/7/2023 07:50

Gross proceeds 10.6m, net proceeds 10.1m. So 500k for Cenkos who didn’t even underwrite it.

[tiswas] 06/7/2023 07:47

Simski.

Not sure about taking on “ more expensive debt”. They had £7.5m net cash at the last results.

[tiswas] 06/7/2023 07:42

And the largest shareholder is increasing their holding by more than 50% at a 14% discount, something is not right.

[dr biotech] 06/7/2023 07:41

Nice gift of 700k from all of us to Regent Gas then. How much was the broker paid to arrange these? Did a rubbish job if they needed to give such a big discount.

Disappointing to say the least.

[simski99] 06/7/2023 07:39

To get any fundraising done in this market is impressive. What was the alternative? Take on more expensive debt at a rising interest rate of 10%+?? This will allow the group to continue its growth, so all shareholders can benefit. Its a good move in my view.

[janeann] 06/7/2023 07:39

Igoe - i do and their bigger shareholder hasjust made a quick paper profit of c £800000