After securing new projects, building services provider T Clarke (CTO) reveals its order book now exceeds £400m. That's a new record for the company's book of future work, revealed in an AGM statement. But the cherry on top of investors is news that T Clarke expects to beat market expectations for revenue, profit before tax and earnings per share.
The market is buoyed by the news, sending the share price soaring, up 12.3% to 88p. The company’s order book now stands at £402m after landing projects such as infrastructure upgrades with hospitals and schools. Its order book is 22% up from the beginning of the year.
Broker N+1 Singer has revised its forecasts higher for the current year to 31 December 2017. The broker now expects 2017 revenue to hit £310m, up £10m, while profit before tax estimates have been revised 7% higher to £6.5m. The broker anticipates 11.9p of earnings per share (EPS) rather than the 11.3p previous forecast.
Top Work
N+1 Singer believes that management’s focus on higher margin projects across a wide range of sectors is paying off. Some of the high profile recently secured projects include a new R&D campus for vacuum technology designer Dyson in Wiltshire. It also secured a mandate for an infrastructure upgrade for media giant Thomson Reuters.
James Tetley, deputy head of research at N+1 Singer, says ‘the share price fails to reflect the current performance’ and he believes the shares should trade ‘in excess’ of 100p. That implies 13.6% upside even after today's rally.
At that higher share price the price to earnings (PE) ratio would rise from 7.4 now to 8.4, based on Singer's 11.9p EPS forecast. The stock would also still offer an income yield of 3.5% at 100p.
