T Clarke (CTO)

T Clarke CTO Logo

Building services group.

17-Nov-2017 – 73.13p – £30.6m – PER 5.05

Trading Update From 1-July-2017 To Date – Expecting 2017 to be in-line, PBT of £6.5m and Revenues in excess of £300m. This is a really nice update, both in its clarity and content.

Tempted here – 2 majors holding me back – The Pension Deficit of about £20m (over 60% of Mkt Cap) and the low Operating Margin (about 1.5%). I wonder where this company will be in 3 to 5 years time – Can it become a MGNS, COST, KIER? I am still on the fence.

1-Feb-2018 – 83.4p – £34.1m – PER 5.53

Trading Update For The 12 Months To End December 2017 And New FD – This is a very well presented update. in line with current market expectations expect Underlying PBT of circa £6.5m and Revenues in the region of £310m. Net cash improved by 27% to £11.7m, the strongest closing balance recorded since 2009 (31st December 2016: £9.2m). Order book as at 31st December 2017 has strengthened to £337m compared to £330m at 31st December 2016. There’s a new FD (no reason given but seems amicable).

Still 2 big factors holding me back here. There’s a Pension Deficit of about £20m (over 60% of Mkt Cap) and the Operating Margin is tiny (about 1.5%). Much as I am tempted, I am Neutral here.

18-May-2018 – 80.9p – £33.8m – PER 5.97

AGM Statement – Excellent start to the year, good order book – In-line.

This is tempting but I just don’t see real strong growth potential here at present, I remain Neutral.

7-Aug-2018 – 83.7p – £35.0m – PER 6.09

Interim Results For The 6 Months To End June 2018 – Revenues up 7%, EPS up 47%, Interim Dividend up 10% but the forward Order book is down -6%. Expects FY to be in-line with the Board’s expectations.

A lot to like here and although I don’t see the opportunity for real growth it’s tempting – Could well benefit from income seeker interest at 4%+ and well covered. On the Watchlist to research a little more.

31-Jan-2019 – 97p – £41.6m – PER 6

Trading Update For The 12 Months To End December 2018 – In-line, on track to hit 3% Operating Profit Margin with Net Cash up from £11.7m to £12.4m. The forward Order Book is up 22%.

This remains tempting although there is I believe a £20m Pension Deficit. Not a Buyer right now but will keep an eye out for any Broker updates here.

26-Mar-2019 – 108p – £46m – PER 6.6

Results For The 12 Months To End December 2018 – Revenue up 5%, Underlying PBT and Diluted EPS up 23%, Total Dividend up 14% and the forward Order Book is up 22%.

I did this update 2 days late, due to other commitments and actually bought in after seeing an updated and favourable Broker note.

10-May-2019 – 128.5p – £55.7m – PER 7.2

AGM Statement & Trading Update YTD – Expects Revenue and PBT to be in-line with previously upgraded market expectations, £340m and £9.3m respectively with EPS at 17.5p. Believes well placed for target of sustainable 3% Profit Margin. Order book at £403m (£368m this time last year).

I am Long here, I like this update so see no reason to change my position at present.

1-Aug-2019 – 117p – £50m – PER 6.5

Interim Results For The 6 Months To End June 2019 – Revenue up 12% to £171.3m, Underlying Operating Margin up 2.9% (2.6%), Cash at £3.6, the Interim Dividend is up 14%, Order Book at £370m (£370m). Confident of FY being in-line.

I recently sold out here with a view that 120p or so was fair value, being in-line would not change that view. Based on the latest Broker note this morning, in my opinion, this looks way undervalued on a 1 Year view and undervalued on a 2 Year view (at 100p (time of writing)) – Note the 4% Yield and Net Cash (but still Low margin, often large complex contracts which can go wrong!).

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