HOPE FOR 2012

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

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.

TClarke plc ("TClarke" or the "Group"), the Building Services Group, today issues a trading update for the period from 1 July 2017 to date.

We entered 2017 in an optimistic mood. Our trading performance during the period has continued to justify that optimism and the Board is pleased to report that the results for the year ending 31 December 2017 are expected to be in line with current market expectations, which are an underlying profit before taxation of £6.5m and revenues in excess of £300m.

In August we announced the acquisition of ETON Associates Limited ("ETON"), a London based privately owned control systems specialist offering a variety of Building Management Systems. The acquisition, together with investment in our new off-site, prefabrication manufacturing facility at Stansted, has entailed aggregate cash expenditure of approximately £3.0m in the current financial year. However, the Group's cash position remains strong with the year-end net cash position, which can be affected by timings of our stage payments, expected to be in the region of £9.0m.

We continue to target projects that we believe will add value and help to improve the margin profile of the Group and the Board is encouraged that, whilst maintaining our selective approach to bidding, our forward order book now stands at £380m against £320m at the same time last year and a record £392m at the interim stage.

Some examples of recent project wins include;

· Our Transport Division has been awarded a place on the MAG (Manchester Airports Group) EMA Small & Medium Works Framework covering M&E projects up to £3.0m at East Midlands, Manchester and Stansted Airports. The Framework will run for an initial period of three years.

· In Vauxhall, London we have secured the Electrical Shell & Core Package at One Nine Elms. The two towers on the One Nine Elms project rise to 58 storeys (City Tower) and 43 storeys (River Tower) respectively, accommodating 487 new homes. At the base of the towers, opening onto a new piazza, will be a 187-room Dalian Wanda luxury brand 5-star hotel, the first of its kind in Europe.

· The London region has been awarded the Shell & Core package for building S9 at The International Quarter London, Stratford development. This 10 storey, 26,000m² office building represents the next phase of the 22 acre overall development by Lendlease (following on from the successful S5 & S6 projects). We have secured both the M&E works on this phase.

Also, our team in the North West is in final client negotiations to secure an extension to the current BAE Systems contract at Samlesbury and Warton for a further three years.

In addition, we have handed over two significant schemes in the period, Bloomberg's New European Headquarters in the City of London and Rathbone Square on Oxford Street, the new home to Facebook's London Headquarters.

We are pleased with the progress of integrating ETON into the Group and the positive reception in the market place for the acquisition along with early feedback from clients to our strategy of jointly targeting bidding opportunities.

There remains a clear demand for our specialist services in the markets in which TClarke operates. We have already secured £190m and £100m of our planned revenues for 2018 and 2019 and beyond, respectively, and we are encouraged by the number and quality of the opportunities that continue to be available both within our established M&E markets and from the new opportunities that we are pursuing, driven by sustained investment at national level in both technology and infrastructure. The future for the Group remains encouraging.

Moving up nicely today after appearing to have cleared a seller. WJG would have been a better bet though even after the last weeks fall.

Finally starting to move. Tipped by Naked Trader this time.

Over the last 3-4 months selling appears to have gone on and on. Today it's finally broken the downtrend line, although it seems to have got stuck at 80 for the moment as someone offloads.

Fingers crossed.

Well it was going so well until along came Carillion. At the end of last week significant volume was going through at 90 (resistance) and someone was throwing around 25k trades like they were confetti. About 1% of the total share capital exchanged hands up there.

And then Carillion. Market has reacted by a bit of sell-off like the rest of the sector. I assume due to nervousness around the balance sheet.

All unwarranted imho. CTO had £9m net cash at last year end and will deliver £6.5m profit this year. The £9m is after their drawn £3m revolving credit facility which they pay for whether they use it or not. I assume they are using it most months of the year as that would fit with their annual interest payments in note 6 to the accounts of £0.1m. So, a bit of window dressing on the accounts at year end, just as everyone else does.

So, no concerns over cash here. With a years profits they probably don't use the RCF most months of the year. Possibly it won't be drawn at year end.

I'm not sure what the market wants to see but you won't find many quoted construction companies with no debt.

Oh and they issued a statement saying CLLN would cost them less than £100k so that's a rounding on £6.5m profits and probably covered by the bad debt provision anyway.


So, I'm left with a sell off for no reason based on market sentiment.

Of course we have the sizeable pension deficit (£22m), but there we have a 10 year recovery plan which is now a 9 year one and the additional contributions are already in the run rate and profit of £6.5m.

So, I'm a little frustrated. Carillion impact should be positive for CTO as this should ease pressures on margins in the industry and Carillion's work will now flow to respectable contractors who CTO are willing to work for.

Perhaps the pension deficit looks scary, but it shouldn't look any more scary than it did a week ago. Unlike Carillion, the balance sheet makes sense. Profits are flowing to the bank balance and the interest on the bank balance confirms that day to day they are borrowing very little and possibly in the 2017 accounts when they are published zero

This stock appears to require endless levels of patience. Market cap of £35m. This years profits £6.5m underlying (£7.9m non-underlying). No debt. Improving margins in sector. Business growing. Pension deficit decreasing as interest and annuity rates rise.

http://www.tclarke.co.uk/news/an-interview-with-eton-associates-director-jamie-ward

An interesting and educational article.

Why all the excitement in the market now about ‘Intelligent buildings’ ?

In simple terms, if you can learn in real time from the data coming to you from millions of sensors in every item on a building control network, then you can only heat or light the areas people need right at that moment, you can learn from patterns of behaviour, you can give people the services they want - be that data, wifi coverage, heating, security or whatever - and so you can get the most value financially from owning that buildling and create the best possible experience for the end user.

To do those things, you need to have all the building’s systems integrated in one system and accessible through what we call ‘one pane of glass’ so you’ve got a dashboard to control and understand the whole thing.

I recently saw the global CEO of a major organisation calling for a worldwide decrease in energy costs across that company’s estate. For them, a 1% decrease in those costs would amount to savings of millions. Intelligent buildings will make these and many other aspirations possible now.