Analyst Research : “TClarke Plc Still Sparking and Sparkling”
14/7/22 : Brokership Cenkos have released their latest detailed research paper on TClarke, alongside a ‘Buy’ Rating.
“Investors should not underestimate the transformation in this business over the past three years, not one driven by acquisition or new equity or even particularly favourable markets, but by dedication to a strategy that is now delivering benefits across the group. This is now a very investable proposition in the sub-sector; it is a better focussed and managed business, with an improved balance sheet and cash performance and a very sustainable model for continued growth. The stock has outperformed its peers’ growth over the past 12-18 months but the rating remains very undemanding indeed; on our conservatively estimated FY23E an EV/EBITDA of 3.5x, a PE of 6.5x, yield 3.5% (over 4x covered), FCF yield over 10% and a net ROIC of 16.5% with zero debt/gearing. We have modestly increased our model ‘Fair Value’ to 185p off the back of higher DPS forecasts and allowing for the sector’s de-rating. This leaves TClarke on a similar rating to peers’ overall but at a phase where we would be arguing for a justifiable premium.”