Building services firm T Clarke (CTO) has avoided the suicidal bidding that’s sent numerous rivals under, which is why it still made an underlying pre-tax profit of £2.4m in 2012. True, that was down 44 per cent on the year before, but it was better than anticipated and broker N+1 Singer now expects a similar outcome and underlying EPS of 4.3p in 2013. Strong cash generation underpins the dividend, too, and a record £230m order book certainly improves visibility.
There is, however, no end in sight to fierce competition and paper-thin operating margins, down from 2.6 per cent to just 1.5 per cent. T Clarke is hurting most in the south where underlying operating profit collapsed from £2.7m to £0.5m despite accounting for two-thirds of revenue. And with the big Olympics and Westfield contracts delivered, revenue at the core mechanical & electrical contracting business fell from £122m to £117m and the order book from £150m to £131m.
However, installing the electrical infrastructure in the City’s ‘Walkie Talkie’ skyscraper will keep the company busy all year and there’s £70m of work on the new Bloomberg HQ up for grabs. We expect news before the interim results. Business was better in the north where a slug of more lucrative facilities management contracts meant profit held up better dropping just 8 per cent to £2.1m, while work on residential housing made £0.1m for the previously loss-making Scottish division.
T CLARKE (CTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 55.5p | MARKET VALUE: | £23m | |
| TOUCH: | 55-56.5p | 12-MONTH HIGH: | 63p | LOW: 39p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 58p* | NET CASH: | £5.6m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 220 | 13.4 | 22.2 | 13.0 |
| 2009 | 176 | 7.28 | 10.0 | 13.0 |
| 2010 | 179 | 5.74 | 8.91 | 8.50 |
| 2011 | 184 | 4.90 | 9.69 | 3.00 |
| 2012 | 194 | 1.20 | 2.05 | 3.00 |
| % change | +5 | -76 | -79 | +14 |
Ex-div: 17 Apr Payment: 17 May *Includes intangible assets of £23.7m, or 57p per share | ||||
