Tribal Share Discussion Threads

[mick33] 03/11/2009 15:59

Clearly one of the directors is very confident of the companys outlook ,one has just purchased a mammoth 5,000 ...

[ards] 03/11/2009 10:15

she ra

you clearly dont understand what rights issues are for. there is no chance of a rights issue for tribal given robust balance book. the only time they would consider one is for an acquistion. getting rid of low margin businesses is par for the course.

[she-ra] 02/11/2009 19:19

Let's hope they dont have a rights issue if they cant sell it.

[pinkkasti] 02/11/2009 17:42

this could come up soon and may give it a boost (imho)

(Sunday Times 1.11.09 business news in brief)


Tribal eyes disposal

The support services company Tribal Group is believed to be considering plans to sell its architectural practice Nightingale Associates.

The company has held talks with potential advisers, though no final decision on a sale has been taken. Analysts consider the business is worth up to £10m.

Tribal provides a range of specialist consultancy services to many public- sector bodies, including schools, hospitals and housing associations

[jgoold] 29/10/2009 06:56

With:
- operating cash flow last year of 22 mm on operating profits of 17.8 mm and projected to meet the same PBT in 2009 with much of the 2009 profits hit being non-cash;
- net debt of 20 mm against facilities of 46 mm;
- order book of 210 mm against 211 mm at the end of June but sales pipeline increasing from 258 mm to 266 mm in the same period;
- an easily maintainable dividend costing 4 mm in 2008 against cash flow of 22 mm; and,
- a projected 2009 EPS of around 4.6.

On the negative side:
- Margins are under pressure and will continue to be; and,
- Profit warnings seldom come in 1's!

I can't help but feel the sell off has been substatntially overdone.

[ards] 28/10/2009 12:38

I also make a pe of 5. with manageable debt and juicy divi. not bad for a punt.

[wcjan26] 28/10/2009 12:38

interesting that when hedra sold, it was at just over 1 * revenues (£50m for £47.5m revenue and £4m profits)

admittedly that was at top of the market, but arguably trb is better placed than hedra across more of the public sector, and you'd have to think that someone like mouchel could also squeeze out a lot of synergy savings

even if you discount that multiple a bit, you'd have to conclude that trb at this price is a takeover candidate?

anyone know if they have any poison pills?

[deanroberthunt] 28/10/2009 12:32

well its hardly returned anything to investors, capitalwise since IPO in 2001....save the dividend.

to be fair though, she's had to contend with the DOTCOM and CREDIT CRUNCH bear markets in that period....didn't really make hay in the 5 year bull market though :(

[ards] 28/10/2009 12:28

looks pretty sad at minute poor little thing. unwanted and unloved. lets find it a good home!

[deanroberthunt] 28/10/2009 12:02

I think we'll see new lows here.....the squeeze on public spending will hurt the sales and earnings for the next 2-3 years imo.....however, if they can maintain the dividend it will be worth squirreling a few away after the next downleg is complete on the main markets....

looking to get in between 50-60p as a first long term hold tranche in my SIPP.

Everything has cycles and public spending will come back with a vengence, but it could be a few years away, if the Blues get in then she's in for a hard run.

[jgoold] 28/10/2009 08:17

Ards, largely agree. I'm looking to make profit long term from a mix of good divis and some growth. Most of my holdings at the moment are large cap, boring divi paying cos that I believe can survive a longer term downturn and continue to meet or grow their divis (pharma, utilities etc) plus a group of the less racy prefs. I'm a lot less greedy than I used to be and if I can make 7-12% every year (incl divis) I will be very happy.

Tribal is one of the few small cap stocks that I own. Having had another look I still think the company should be valued north of where it is but will need some time to demonstrate the stability of its core business (or not!) and so will mark time for a while.

[simon gordon] 27/10/2009 22:00

The only potential catalyst until the election is consumated and budgeting is finalised is a takeover. This could well be dead money for most of 2010.

[glasshalfull] 27/10/2009 19:50

ards - Thanks for the response.

I did mention Education had performed well. Most important as they enjoy operating margins in the teens.
Yep, more cost savings is a plus and will hopefully help them protect margins in the other sectors which are coming under pressure. Possibly lead to exceptional charges as they rationalise though.

I acknowledged that they were reasonably well placed to ride out the deteriorating Market conditions but I'm afraid the question I always ask is whether or not I would invest in a company if I had just happened across it. That has served me well in 20 years of investing in small caps.
I agree that the Market Cap is low but given economic outlook and sectors in which TRB operate I only see more pain, hence will not invest until the situation stabilises, which may be a few years down the line.

As I said, best wishes and good luck with your investment. I'll still be monitoring.

Regards,
GHF

[ards] 27/10/2009 19:29

jgoold

your caution is admirable but you are also thinking like a fund manager. the questions for retail are only:

how much bad news in the price-yes, imho
how much of the sentiment is grounded in fact-no, there is view that the country is going bust and that every service company is doomed
what is the operational cash flow-fab

going with momentum in my view gets you stuffed. I only buy trb under 80 and it has served me well so far.

[ards] 27/10/2009 19:23

GHF

Like all investments the question is not whether the is bad or good new but whether it is in the price. the half year report did already flag up the challenging market and also problems with regeneration. However the company is still very cash generative and debt as you correctly say is very managable. I suspose I am so used to seeing companies break convenants that I said no debt, rather than manageable debt.

I personally think that hitting 22m profit in this enviroment for a 70m cap company was always unrealistic but the fact remains that the company is still very profitable, pays a nice divi and yet market cap is even lower today. You also fail to mention that education very positive and 5m cost reductions which are also positive.

In summary I think that this company is worth a lot more than current price and unless bottom completely falls out should emerge as winner or at least be a target given strong cash generation.

[jgoold] 27/10/2009 19:20

Company has net debt of £19 mm but still fairly low gearing. I added to my holding first thing this am and feel fairly stupid! Will have a good look tomorrow and see if I should take my lumps or if this is a bump in the road. Need to balance the low forward PE, even on reduced EPS expectations, and an ability to comfortably maintain the dividend with this lack of visibility on earnings.

[she-ra] 27/10/2009 18:52

ards - Which management statement were you reading?

[ards] 27/10/2009 16:35

pretty mild profit warning. an oversold stock now becomes even more oversold. no debt, profit as per last. oh well, probably less than optimistic tone spooked the herd. still good punt on 3-6 months basis.

[wcjan26] 27/10/2009 15:45

looks out of date

reckon trb could be in play soon though

[dbrckll] 27/10/2009 15:15

Good TRB writeup here:
Seems like a fair summary to me - thoughts?

[ards] 22/10/2009 12:24

looks like another good entry point coming up once green bar in place. oversold at minute with 120 3 month target if you believe that change of trend in place and higher low on cards.

[wcjan26] 22/10/2009 11:59

this company looks to me to be a fairly unique proposition for an acquirer wishing to buy into UK consulting sector. not many pure plays of this scale.
it seems strange to me that this is not reflected in a premium valuation