HOPE FOR 2012

web: www.tclarke.co.uk
Company was preferred bidder on the London Olympic Stadium

And up it goes again today. Some trades going through at 90.0 and not that many sellers around. Someone clearly wants in before the interim statement. I hope it does not disappoint

CTO 87.25p ahead 3.25%

TClarke trading in line
TClarke's trading for the year to date is in line with the board's expectations, with revenues to the 30 April up at GBP78 million from GBP72 million a year ago

An update issued ahead of the annual general meeting says: "The targeted tender process that we have implemented across our businesses has been successful. This has meant that the value of our replenished forward order book remains strong and it has now reached a new record level, increasing 10% to £330 million compared to £300 million at the same time last year.

"The board believes that our expectations for the Group's annual revenues will be met for the current year. The majority of the Group's businesses have secured revenues in excess of 85% of their targets. Looking forward, 45% of forecast revenues have been secured for 2017 and a further £38 million for 2018 and beyond.

"We remain confident about the progress we are making. We are seeing margin improvements across the Group and we will continue to target opportunities to match our planned capacity and resources with a focus on projects which will further improve the margin profile of the business."

Looking ahead, the group says: "Overall the trading environment continues to improve and the Board remains confident for future prospects."
The next update is scheduled for 2 August with the release of the group's interim results.



edit - I have asked to fix the chart data

I am still in this in a big way and picked a few up over the last couple of days as it fell prior to the trading update.

I'm assuming it fell in line with the "leaked" IRV situation although that's just a guess.

Very low volume today, with SNGR and WNTS slowly moving up on L2 as if they are searching for sellers. I will be interested to see if it continues up to resistance at recent resistance at 90 as the day goes by.

I guess price has pulled back as Robson offloads his stock. I've added a few.

CC - you appear to believe in this Stock, LT, - so can you explain most-recentRNS re funds recovery - Is this still the Co.Acquisition that went wrong....or something else.
In May16 you bought more, yet sp is lower now...could there be more bad news?...e.g Not just "like losing this Cash-Recovery", I'm guessing the sp is depressed for other reasons: despite Order Book looking healthy....
BTW, did you attend their "site-tour-plus" yesterday? regardsH (+EDIT-) ThanksCC

The most recent RNS refers to a £2.8m fraud against the company from one of the companies that was acquired.

According to company statements the fraud will have no impact on this years profit so it seems reasonable to assume this is invoice fraud and accounted for in the books. (fake invoices with no supply of goods)

The sales price is depressed due to:
1. General construction sector Brexit
2. No evidence of margin improvements (although I believe this is happening but the wider market await firm evidence through the P&L)
2. Pension deficit due to low interest rates. (This isn't a long term problem but the size of the pension deficit is annoying rather than uncomfortably large. Scheme is closed to new entrants and would look very different if interest rates went up a couple of percent).

I am a little frustrated with this trade at the moment. We will see what happens after the budget statement but I expect the whole sector is stuck where it is until we have more clarity around the long term future of the UK post Brexit.

In the meantime I'll collect my dividends as I am on PSN and TW. and wait things out a bit.

Interim statement today. Shares currently up 20%. Getting there...

Up 9.5% again today. Finally JPM may have finished selling. Maybe they have a few left. They've spent the last year selling nearly 10% of the share capital for what reasons I don't know and don't care.

90p recent top which I trust will be achieved in the next 3-6 months. I'll post a long term chart when I have a few minutes. Share price used to be 300 a few years ago.
Need the pension deficit to improve through through macroeconomic factors ideally

The green line is about to cross the black one. Share price heading back to the recent 90p high where I expect some resistance. After that who knows. Price used to be 300 (without the pension deficit issues) and this sector appears to be heading in the right direction.

CC - it looks bullish - although starting to look a tad over bought.

Thank you Skinny. I am expecting it to pause at 90 which is the pre-Brexit high.

Profits and cash are good but pension deficit remains a considerable issue. Maybe inflation will help fix that

Can it, will it get through 90p and will I get a smooth ride to day 150p?

It's pulled back from 90 to 80 and I'm wondering if that's far enough. Could be PI's taking profits before tax deadline given the rise or could just be someone wanting out.

Whoosh - once again moving up 10%+, this time as a result of the AGM trading statement.

It's had another bash at resistance at 90 but inevitably we still have a few sellers to shift around this area.

Why I like CTO

Financial year end Dec 2016
Cash £12.3m, revolving credit facility drawn £3.0m = Net Cash £9.3m
Interest paid in year £0.1m, in-line with revolving credit facility suggesting debt does not exceed £3.0m at any point in year
Underlying profit £6.2m, Reported £3.7m. Difference due to £2.7m fraud
EPS underlying 11.7p, reported 6.9p

Current dividend 3.2p. Yield 3.7%. In order triple the dividend to 10p, if 30% of pre-tax profits distributed (50% retained, 30% dividends, 20% corporation tax), pre-tax profit of £14m is required.
As company has nearly no debt, pre-tax profits service pension deficit, acquisition and shareholders. Pension deficit is £20m but agreement with pension trustees in place to fix by 2029 and payment profile similar to recovery payment in 2016.
Order book up 22% compared with this time last year. Margins improving driven by market recovery but more importantly by improving product mix and vertical integration.
In February company stated would beat analysts expectations for year and re-affirmed same in May. Not unreasonable to suggest an underlying profit of £9m for 2017.
£9m profit this year = £6.5m free cash flow assuming only minimal rise in dividend in 2017 as strengthening balance sheet and building cash for acquisition more important in short term than dividends. Would give £15.8m net cash by end of year.
By this time next year net cash will be £20m and what are they going to do with it? CTO used to pay dividend of 13p back in 2008. By 2020 if they get to £14m profit by then, if they don’t increase the dividend net cash will be £32.5m or 95p per share (recognizing that pension fund deficit will still exist, although I expect annuity rates to recover in this timeframe)
Downside Brexit apparently. Upside is government get hold of PSBR and are able to fund increased capital spend.

Think within 3 years worst case scenario is 50% upside, best case a multi-bagger.

Half year results will be interesting but we will have to wait until year end until we see the full picture. The management team imho are excessively cautious at half year to give themselves some slack in case the second half does not go well

Still can't get through 90p, possibly because in-house broker target is 100p.

A very frustrating share this. Picked some more up recently. It seems to be under the radar and no-one is interested.

N.G. Bailey - one of the few M&E contractors and competitors who aren't part of a larger group. Results out yesterday. No market reaction in share price on CTO at all.

https://www.constructionnews.co.uk/companies/financial/ng-bailey-doubles-profit-and-grows-revenue/10021372.article?blocktitle=More-news&contentID=7121

Doubles profit to £12m on a turnover of £500m. It's all about the margin.

Which is where I think this stock is going and why not only have I filled my boots but also my wheelbarrow.

I'm hoping it's going to do a NMD

Continuing to hold. Interims next Tuesday. Hoping for it to break over 90. thought it might do it today but construction PMI seems to spoilt that plan.

Acquisition

Acquisition of Eton Associates

TClarke plc ("TClarke" or "the Group"), the building services group, is pleased to announce the acquisition of Eton Associates Limited ("ETON") a London based privately owned control systems specialist offering a variety of Building Management Systems.

ETON is well known to TClarke and the Group has worked alongside them on a number of high profile projects in our core markets in London. It specialises in installing and maintaining sophisticated building controls systems on complex office buildings. Recent projects ETON has been involved with include, 20 Fenchurch Street, Chiswick Park, One Canada Square, Bloomberg London, Lacon House and Angel Court.

Under the terms of the acquisition agreement, TClarke has paid an initial cash consideration of £1.5 million, and a further £0.5 million is due to be released to the vendors following agreement of the final completion accounts. Further consideration of up to £0.6 million, will become payable to the vendors, subject to certain earnings targets being met in the two years to 4th August 2019.

For the year ended 31 May 2016 (the latest financial period for which audited results are available), ETON reported revenues of £9.5 million and a pre-tax profit of £0.3 million. As at 31 May 2016 it had gross assets of £3.2 million and net assets of £0.7 million.

After integration costs are taken into account, the acquisition is expected to be earnings enhancing in 2018.

With regards to the two principal directors and owners of the business, Jamie Ward will be remaining with the business for a minimum of two years following the acquisition and Graham Millward will remain available as a consultant to the business for a two-year period.

Acquisition Rationale

The acquisition of ETON is part of TClarke's stated strategy to grow and develop its range of services in the area of Intelligent Buildings, providing our customers a comprehensive offering and supporting our core M&E contracting business.

About ETON

ETON employs around 80 people and is currently based in London Docklands with a manufacturing plant in Essex. The intention is to co-locate the operations of ETON at our London Head Office at Moorgate and at our recently opened purpose built prefabrication facility at Stansted.

All of ETON's engineers are trained in Cylon, Honeywell, Trend & Tridium Building Control Systems which are the most utilised systems throughout the world, these engineers are supported by dedicated in House Software Design Engineers.

ETON's current client relationships include:

· Canary Wharf Management and Contractors
· CBRE Maintenance
· Lend Lease
· Sir Robert McAlpine
· Stanhope Plc

Interim Results for the six months ended 30 June 2017

TClarke plc ("the Group" or "TClarke"), the Building Services Group, announces its interim results for the six months ended 30th June 2017.

Business Highlights:

· £392 million forward order book (30th June 2016: £320m).
· 17% increase in revenues to £142.8 million
· Year on year net cash improved from £1.3 million to £2.4 million.
· 20% increase in interim dividend to 0.6p per share (30th June 2016: 0.5p per share)
· New 26,000 Sq Ft prefabrication facility at Stansted, Essex now operational
· Acquisition of control systems specialist Eton Associates Limited
· Investing in our future workforce, 70 new apprentices begin training across the UK from September.


more.....

Market hates the numbers as I write. Perhaps it would have been helpful it they had included a 17% increase in profit before tax in their business highlights but they obviously didn't feel it was an achievement.

My analysis suggest they will still beat market expectations for the year but now only by a small amount rather than now with ease.

IMHO interim profits depressed by FD continuing to clean up the balance sheet. Market appears suspicious that there is more to come. I think it's now the other way around and FD is now hiding money for a rainy day.

When the FD has finished hiding money for a rainy day I still remain of the view that this stock will fly.

In the meantime it looks like I will be continuing to collect my dividend which at around 4.1% is ok but I'm more interested in the capital appreciation which isn't going to plan at present.

I think it will claw it's way back to 90 now, once the analysts have worked out the underlying position, where once again I expect the sellers to come out at resistance.