T Clarke PLC

Last modified by Wilton Risenhoover on 2022/07/01 19:36

Contents

History
Strategy
Strength
Business segment
Outlook
Resent development
References

History

T Clarke PLC (LSE:CTO) started in 1889, the company were pioneers in the most advanced technology of the age. Tommy Clarke founded this company in the same year Edison was finally commercialising his lightbulbs patents. From the offices pictured above, on Sloane Street in Knightsbridge, the company electrified Royal Palaces, stately homes and government offices.¹

In the following 130 years, it retained a reputation for quality, based on the work its people do. We’ve stayed independent throughout that time and built a culture that the market has placed its trust in.

TClarke is constantly changing and evolving its skill base to stay at the edge of technology and technical skills. But the emphasis on quality jobs for quality people has never changed.

Strategy

The company's market is rationalising and transforming. As major projects become increasingly complex, principal contractors and developers need programme certainty to achieve their financial and business objectives²

By offering complete, integrated building services, covering mechanical, electrical and digital elements, with consistent quality and scale, the company provide one of the most effective ways for them to manage and control these increased risks.

This offer further differentiates TClarke in the market and increases the value the company provide and receive in return.

With landmark London projects at the core of its order book

There is a substantial premium market of major London projects and their complexity and programme challenge means that very few can compete with it to deliver the required quality and scale of resource. The company will continue to focus on this work and increase the strength of its market position.

Balanced with strong infrastructure, residential and maintenance businesses

Infrastructure projects grow at times when London commercial markets contract. FM markets increasingly require the expertise the company offer. The company's residential business is best in class. So the company can balance its orderbook by further developing its presence in these markets.

Pushing out to support principal contractors across its regions

The company will continue to grow, supporting principal contractors working on major projects across the UK, leveraging the quality and range of its regional resource.

Differentiating itself on its quality and scale

In every sector in which the company operate, its key differentiator will be the quality and scale which the company can offer – and the programme certainty which that delivers.

Taking the substantial growth opportunities which new technologies present

Digital, data and the trend towards offsite manufacture all offer substantial ongoing growth opportunities as its sector transforms and as designs and installations themselves become more complex.

Steadily targetting improved margin growth

The company's business will focus on steady improvement of its operating margin, through targeted tendering and operational efficiency.

And growing the topline of the business too

Based on the increased value to its market place that its integrated offering presents, the company will also have the ability to grow group turnover in the medium term, while retaining its focus on margin.

Strength

The company's investor case shows a strong, balanced business, funding its own growth and focused on new technologies.³

Positive cash position and debt free

Cash generation is strong, planned investments from growth are funded from internal resources.

Sustainable balanced business

Sustained revenue across its five target markets. The company's integrated offering and technological expertise sets it apart from its competitors and makes it the contractor of choice for all projects.

Improving margin profile and profitability

T Clarke is focused on growing profits ahead of revenues. T Clarke has a differentiated service offering that commands higher margins. T Clarke has a clear medium term target to increase the underlying operating margin to a sustainable 3%.

Strong EPS growth and progressive dividend policy

T Clarke is committed to a progressive dividend policy, whilst balancing the rewards of shareholders with the interests of other stakeholders.

Forward revenue visibility

The company's forward order book at 31stDecember 2018 stood at £411m, with £118m revenue booked for 2020 and beyond.

Management discipline and robust risk management approach

The company operate a highly effective and selective approach to tendering and potential customer risk assessment. The company also operate a prudent profit recognition policy.

Business segment

Infrastructure

Work on major transport, healthcare, education, prison and defence projects across the country, ensures balance in its order book, as the company achieve its strategic goals.⁴

TClarke has a proven in-house infrastructure team and over the years T Clarke has also developed additional services and capabilities. For example, for healthcare clients T Clarke has a turnkey design and build service for scanning suites, supported by a healthcare controls manufacturing operation and partnerships with world-leading healthcare equipment manufacturers.

Residential & Accommodation

Across the UK, T Clarke is active in the residential, hotel and student accommodation marketplace. In Scotland, the company lead as a ‘one-stop shop’, partnering quality homebuilders.

There is strong market appetite for its expertise in this sector. As part of its margin-targeting strategy, the company operate a consistently selective approach to residential projects, showing more caution in respect of high-end, luxury residential fit outs and focusing more often on the shell and core aspects of these projects, where the company prefer the risk-profile.

At the same time, the company also favour the development of effective long-term partnerships and so take on growth opportunities with confidence. The company's partnership with the Berkeley Homes Group in North London, leading to potential new opportunities in other geographic areas, was a strong example of this in 2018.

M&E Contracting

M&E Contracting is its core market nationwide. The company focus on landmark projects, working for long-term partners and principal contractors who value the advantages the company bring.

As a specialist building services contractor, its core offer is the design and installation of all the power, water, waste and climate control services that a building needs. The company offer those services nationwide and, in line with its margin focus, T Clarke is selective in the projects for which the company tender and the principal contractors with whom the company work.

The company's integrated services offer gives it a strong market position and the company win and deliver more than its share of major projects. This, in turn, builds its skillbase and helps it to achieve very strong staff retention rates and the scale of resource its clients want.

Technologies

The company's technologies offer also includes its offsite manufacturing facility at Stansted where vast 6-10 metre prefabricated modules containing mechanical and electrical services and pre-wired and pre-plumbed equipment can be precision manufactured in safe, clean conditions and brought together onsite. This dedicated capability has been key to winning and delivering various landmark projects during the year

Facilities Management

T Clarke is specialists in Facilities Management, targeting long-term relationships and major framework agreements.

T Clarke is proud to enjoy a number of key long-term FM relationships. These include Springfield Nuclear Fuels, BAE Systems, EDF at Dungeness and Sizewell and across US airbases in East Anglia. Across its regions the company also deliver regular FM services where these meet its value model and its Birmingham office is a centre of excellence in FM for a variety of commercial and industrial clients.

The company also target major framework agreements in both public and private sectors. The company's position on the Manchester Airport Group, NHS Procure 22 and ESFA Schools Framework are all strategically significant for its business.

Outlook

Order book has been maintained at £370 million.⁵

London market, is frustrated by the ongoing political uncertainty – T Clarke is seeing some future opportunities delayed

Investing in new geographical regions in the UK – Manchester and Liverpool.

Entering European Data Centre markets.

Resent development

30 January 2020 the company has signed a 5 year UK exclusive agreement with Gooee to sell, install and maintain the revolutionary Gooee suite of smart building products. As part of this agreement, TClarke has made a small but strategic investment in Gooee.⁶