Share Name Share Symbol Market Type Share ISIN Share Description
Tclarke Plc LSE:CTO London Ordinary Share GB0002015021 ORD 10P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 98.75 0.00 01:00:00
Bid Price Offer Price High Price Low Price Open Price
98.00 99.50 0.00 0.00 0.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Construction & Materials 326.80 7.80 14.99 6.6 42
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 0.00 GBX

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DateSubject
15/9/2019
09:20
Tclarke Daily Update: Tclarke Plc is listed in the Construction & Materials sector of the London Stock Exchange with ticker CTO. The last closing price for Tclarke was 98.75p.
Tclarke Plc has a 4 week average price of 97p and a 12 week average price of 95p.
The 1 year high share price is 141p while the 1 year low share price is currently 78p.
There are currently 42,953,211 shares in issue and the average daily traded volume is 81,699 shares. The market capitalisation of Tclarke Plc is £42,416,295.86.
04/9/2019
12:14
lasmo: Sorry to see you go. My view is more optimistic. CTO is better protected in a down turn due to no debt, opportunities in Europe should counter balance project delays in the UK. Brexit doom and gloom is already baked into the share price. Hence assuming we come out of this mess, upside could be substantial. Finally, cheap pound may increase potential for CTO to be acquired by overseas company.
01/8/2019
12:16
cc2014: I had an incredibly informative results call with the directors of nationwide building services contractor T Clarke (CTO:105p). The company ended the half year with a bumper £370m order book, having won around £130m worth of tenders since the end of 2018 and delivered 12 per cent higher revenues of £171m in the six month trading period. It’s increasingly profitable work, as highlighted by the uptick in operating margin from 2.6 per cent to 2.9 per cent, which helped drive the 24 per cent increase in first half underlying pre-tax profit and earnings per share (EPS) to £4.6m and 8.67p, respectively. Finance director Trevor Mitchell confirmed to me that 96 per cent of house broker N+1 Singer’s full-year revenue estimate of £340m is covered by the contracted order book, and half of the broker’s 2020 revenue forecast of £360m, too. Both Mr Mitchell and chief executive Mark Lawrence reiterated their confidence in hitting the broker’s numbers which point to full-year adjusted pre-tax profit and EPS rising by 16 per cent to £9.3m and 17.5p in 2019, respectively. They are also confident of achieving N+1 Singer’s 2020 pre-tax profit and EPS estimates of £9.9m and 18.6p. But TClarke’s share price fell by 12 per cent post the results as investors focused on news that some of the company’s London clients were holding back starting their new developments given UK political uncertainty. Also, some less well funded rivals in the London market are desperate for work which has created pricing pressure. TClarke clearly isn’t and the board were well ahead of the game to mitigate any impact in London as they have already expanded into Europe to take advantage of high margin data centre work. This has led to some significant opportunities: TClarke already has tenders out on two major European projects (contract values of £30m to £40m) which if successful will start in March 2020. The company also has an impressive bid pipeline across the whole of the UK. In fact, Mr Mitchell says the business has £1bn of tenders out with clients including work at Manchester Airport, and the new Channel4 studios in Leeds (TClarke won the tender on the London studio, so looks well placed). Moreover, the corporate presentation accompanying the interims results is absolutely jammed pack full of tenders which, based on an historic win rate of between one-in-three to one-in-four, indicates a sizeable opportunity for the company to exploit. The point being that investors’ misperception over TClarke’s trading prospects has created an investment opportunity for investors to exploit. That’s because there is actually a high probability that TClarke will generate cumulative EPS of 36p over the 2019 and 2020 financial years, in-line with analyst estimates. That sum equates to a third of the share price. Also, as seasonal working capital build eases in the second half then TClarke’s half year cash pile of £4.7m should double to about £10m by the year-end, a sum worth 23p a share. In other words, the shares are effectively being priced on a cash-adjusted current year price/earnings (PE) ratio of 4.7. There is a progressive dividend, t00. The board lifted the interim payout per share by 14 per cent to 0.75p, and N+1 Singer predicts a 10 per cent hike to 4.4p for the full-year, implying the shares offer a prospective dividend yield of 4.3 per cent. True, the shares have pulled back since I last advised buying, at 128p, in mid-May (‘TClarke reports a robust start to 2019 financial year’, 16 May 2019), albeit they are still well ahead of my 90p entry point last December and the company has since paid out its 2018 final dividend of 3.34p (‘Profit from a buoyant earnings cycle’, 7 December 2018). However, I strongly feel this is a buying opportunity given that the current miserly rating is completely at odds with the trading prospects of the company and the strong likelihood that the directors will hit their 2019 and 2020 internal budgets. Indeed, during our results call, Mr Mitchell told me that the business “is trading ahead of internal budgets for turnover”. That’s well worth noting as is the ability of TClarke to convert what is undoubtedly a bumper pipeline of work into firm orders. Offering 43 per cent upside to my maintained 150p target price, I feel that the shares are well worth buying. The flow of trades this morning suggests to me there is one large institution selling. Probably Miton selling out their final shares?
07/6/2019
09:49
cc2014: Bizarre. Kier up 8% today, rest of sector about as much up as it is down. A reminder from house broker: On on FYl9 P/E rating of 6.1x, TClarke trades at a substantial discount to peers (7.8x). We believe that earnings momentum and revenue visibility should support a higher share price. Whilst Brexit is likely to dictate near term sentiment, we see re-rating potential as uncertainty clears. We believe a P/E rating of 8.6x is justified, a l0% premium to the sector. This would imply a share price of 150p. IC also have a price target of 150p
29/5/2019
11:39
cc2014: I have been musing about this post for some time. Does anyone find the trade flow and price action a bit strange over the last couple of months? I've been investing and trading for very many years and the stock market has been very kind to me. After so many years I've got of got a sense for how share prices move and for when things look unusual. What I see here is that after a significant price correction, we continue to see a continuous flow of buys. Now the price correction was overdue (PER, net cash, assets etc. were all screaming this for some time) and as is usual price corrections do not go in straight lines and this one is not complete, but what I call the ebb and flow in the share price seems odd. I would have expected the pullbacks to be stronger, contain more volume and last longer, but that's not what's happening. It's like someone knows something and is not prepared to be patient as they know they are on a limited timeframe. Or there are multiple buyers all of whom know something and are having to compete for stock. In some ways I don't have to think about this much deeper as the P/E is still low compared with the sector average and in addition profits are rising at a sustainable impressive rate. Further the new stream of business within Eton provides a much better margin and opportunities for growth and the effects of that have yet to play out to any great extent. Maybe it's as simple as that and some fund managers see consistent long term growth with a low P/E and no debt. However, I keep looking at the trades and the buying pressure seems stronger than I would expect given the share price was 80p only 8 months ago. When the share price was 80p I was really worried someone would come along and make a bid at 120p which I felt would have been derisory but difficult for the Board to defend. Now any bid would have to be in the 200p area which I still wouldn't be happy with but at least is alot higher than 120p. I don't know, maybe I'm imagining things which aren't there in the trade flow and it is as simple as the shares remain "cheap" but it seems to be something more than that.
01/4/2019
17:02
tuscan4: Thanks CC2014, Comparisons with early 2000's can be misleading. CTO was a pure electrical contractor in those days, throwing off surplus cash which went to augment its nationwide collection of small electrical contractors, all bought ad-hoc, with little strategic focus. With minimal pension fund commitments and little need for working capital they were very generous with the dividend. Hence the share price spike. Everything changed with the 2008 recession. Legacy contracts maintained profits for a few years,then margins were decimated. CTO changed its business model to survive, the fruits of which are now emerging. Margins are rebuilding but will not go back to earlier levels. The pension fund deficit will, I believe, fall away over the next few years. CTo is moving up the value chain and is building a moat to differentiate itself from the competition. CTO directors are rewarding themselves, possibly excessively , for the change in the company's market position. Shareholders received the bulk of the fruits of the earlier prosperity. Now the Directors are in pole position. To me this is a very vulnerable company to a private equity offer.
31/1/2019
13:54
rivaldo: Here's the main thrust of Singer's note FYI: "Strategy delivering with record order book TClarke continues to deliver on its strategy, with strong momentum in earnings and the order book, whilst maintaining a healthy balance sheet (the Group carries no debt). Both revenue and operating profit are expected to be in line with expectations after the upgrades in November (EPS estimates increased 12%/15% in FY18/19). The order book hit another record high at £411m in December 2018. This is a 22% increase year on year and a 2% increase on the figure reported in November. The Technologies sector, a key growth area for the Group, has been the main driver of this increase. Our FY19 revenue forecast is now 88% covered by the order book. The outlook statement is confident and we believe that positive earnings momentum will continue to drive the share price. We also see the rating as undemanding, with the shares trading on a substantial discount to peers." "Shares attractively valued On an FY19 P/E rating of 6.6x, TClarke trades at a substantial discount to peers (8.2x). We believe that earnings momentum and revenue visibility should support a higher share price. Whilst Brexit is likely to dictate near term sentiment, we see re-rating potential as uncertainty clears. We believe a sector P/E rating is justified – this would imply a share price of 134p. We believe the shares could exceed this level as continued growth is delivered."
31/1/2019
11:13
cc2014: Good morning all. I'm pleased to see the hard work of the directors is now beginning to be reflected in the share price. I found the update interesting. Headline " TCLARKE REPORTS SUSTAINED GROWTH IN ORDER BOOK AND PROFITABILITY AND IS DEBT FREE" And is debt free gets it's own sentence and is in bold at the top. Clearly the directors wish to point out the strength of the balance sheet. And rightly so. The construction sector has been hit with warning after warning over cash and many investors won't touch it any longer because of this. Carillion goes bust, IRV on it's last legs even after cash injection a year ago, Laing O'Rourke filing accounts late as they can't get them signed off until they have reached agreement with their banks, Galliford rights issue a year ago, Kier rights issue a few weeks ago. Any number of smaller competitors going bust. So, how many listed construction companies out there can claim to be debt free and have £12m in the bank? only two I think, CTO and NMNC (and go look at their share price over the last 3 years and see what it did for them). Rightly they should shout loud about this, to investors, clients and suppliers. It makes me sleep easy at night. And then this from the CEO: The Board continues to look forward with optimism and we remain focussed on delivering an improving financial performance as we move through the year." I grinned from ear to ear when I read this. What I believe it says is "things are going pretty well, we're almost sure we're going to upgrade the numbers later in the year but it would not be prudent to do so only one month into the year no matter how confident we are" I can't get my head round N+1. Where does that dividend forecast come from? Profits up 18.6% in the year, yet dividends only up 5.7%. What are they on? Did they not notice the interim was up 10% and by implication surely the final will be up at least 10%. And as for 3.9p in 2019. That makes no sense either. If £8.6m=14.7p EPS, then 16.3p=£9.5m. They forecast profits up 11% but dividends up only 5.4%. They are forecasting a company with £12m in the bank and no debt is going to only pay out 24% as dividends and as the profits get bigger they will pay out less and less and dividends on a proportional basis! If that's true, the dividend bill will be £1.6m, the corporation tax bill will be £1.6m and all other things be equal with working capital CTO will end 2019 with £18m in their bank account. Not that I would object to £18m in the bank account but I think it more likely N+! don't have a scooby and that's part of the reason the share price is so low. Anyways all good from where I'm sitting. I particularly like the progress on intelligent buildings with Eton. Got to be good for margins. Hurrah
28/11/2018
13:54
rivaldo: I too thought CTO's presentation was extremely encouraging and impressive. Great to see the share price finally responding to the terrific trading update. Still lots to go for imho. Apparently Miton needed cash for another investment, and took the opportunity to top-slice given that Regent Gas were in the market for shares. Incidentally, CTO had no prior connection or contact with Regent Gas, who apparently are friendly stakeholders looking for a home for the excess cash they're throwing off (they've also taken a large stake in INSE). The cash pile is large - which is great - but is necessary. For example, CTO are going to make a large downpayment at some point soon (can't remember what for, but I seem to remember this would be £9m). So the cash pile can be volatile. With 14.7p EPS now forecast for the year about to end, and 16.3p EPS for 2019, a minimum share price of say 110p-120p should be quickly achievable in decent markets. If the perception of CTO continues to improve - and/or there's finally a lack of sellers - then perhaps a P/E of 8 or 9 and a share price of 130p-150p is achievable.
28/11/2018
09:21
cc2014: A few thoughts. N+1 the house broker suggest CTO should have a rating similar to their peer group. Now, I'm not entirely sure agree with this as CTO are more specialist, have more stable profits and considerably less debt and in my mind should be at a premium to the peer group. However, let's run with it. The peer group have a average P/E of 8.8 for 2019. That however, includes Interserve, so I'm going to strip them out (because 75% of their business isn't construction, they have loans totalling £800m+ and under any normal measure would be breaching their banking covenants). Therefore the sector average based on the top 7 excluding Interserve is a P/E of 10.47. Make of it what you will but with a forecast P/E for 2019 of 5.3, N+1 are suggesting the share price should be 50-100% higher. So, why isn't it? Some have suggested the Carillion affect. I reject this as this is in BBY, GRFD, KIE share price as well and we are only comparing on the basis of the peer groups P/E's It is my view that the share price is depressed due to MIFID II, which has meant some funds have been selling down their holdings in small caps on a significant scale. The scale has been dependent on their investment mandate and as a generalisation the shares have been soaked up by private investors. If you look across the spectrum of small caps, for some this process ended 9-12 months ago, for some it's still going on. In relation to CTO I perceive it is complete apart from Miton. Miton were selling down their holding aggressively until about 4 weeks ago. Since them we can't say anything apart from it's either stopped or it's slowed down to a treacle. I don't really care as I'm here for the long term. Miton have no more than 3.5m shares left or £3.2m. Even if Miton continue to sell they will get soaked up over time. Of course if this were VRS or TERN they would get soaked up in a day by PI's, but there again those sort of buyers aren't investors and would do nothing for the share price in the long term. The share price is now bashing it's head at 90 resistance on the chart. I guess it is inevitable it was going to stop there for a while until such time as those inclined to sell on the basis of a wiggly line have all done so. What's more interesting is what happens once the chart resistance high point is breached. In our case once the sellers at 90 have got exhausted, there is no chart point or other psychology to stop the price rising and in this case stocks tend to accelerate away at speed once the 90 psychological barrier is breached. Or put another way having waiting for all the sellers to sell at 90 why would you sell at 92 or 94 or 96. Psychologically even the most eager person ready to sell is going to be thinking about 100. You can read about this sort of trading psychology, in a book by the greatest trader of all time, Jesse Livermore. http://www.r-5.org/files/books/trading/speculation/Edwin_LeFevre-Reminiscences_of_a_Stock_Operator-EN.pdf
11/4/2018
09:53
cc2014: Good morning. The bid concept is something I have mixed feelings about. At the current share price the P/E and cashflow is going to make CTO look very cheap to anyone who wants to acquire a building services company in the UK. NG Bailey, CTO's main competitor and the biggest in the UK certainly have the clout. Their accounts show that at the end of Feb 17 they have cash and liquid investments of £84m. NG Bailey are privately owned and have been around for decades. Interestingly the type of work they do is sufficiently differentiated from CTO that it would make a good fit. NG Bailey of course do the commercial office blocks and infrastructure but not on the same scale as CTO. NG Bailey do far more term maintenance, facilities maintenance and some of the really big stuff like Hinkley point nuclear power station. I'm pretty sure NG Bailey will pick up HS2 which CTO wouldn't be interested in. I don't think any takeover is on the cards though. What's more interesting is showing where CTO could go given time. At the moment CTO are focused on technical innovation (better margins) and spreading geographically in markets they have a great reputation in. A good strategy and one I support. Lots of opportunities related to diversification though at the right time which I don't think is now. Best to continue to do what you do well rather than overstretching. Actually I would cry if there were a takeover bid at 110p. 150p I could cope with I guess but I'd much rather the share price moved to 100p by the end of the month so that the P/E only looked "stupidly low" rather than "bizarrely low". That doesn't seem too likely though. lol. Finally I do agree there is someone out there collecting stock. They were collecting in the run up to results at 78p and now I think they are prepared to pay about 83p. I say this as the trade flow suggest more sells than buys yet the share price is stable. Whoever it is, I consider them professional. They are extremely patient and are clearly trying to get the stock as cheap as possible rather than embarking on a smash and grab raid by pushing the price up. This strategy will work for them as long as a second buyer doesn't come along.
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