Small Cap Value Report (Fri 10 May 2019) - CTO, PTSG

Sunday, May 12 2019 by

Good morning, it's Paul here.

The good news is that I'm finally starting to get over quite literally the worst flu/chest infection of my life. It's been absolutely horrendous - I've been bed-ridden for 22+ hours per day, for the last fortnight. It felt like I was almost suffocating some of the time.

Anyway, that's why my reports last week were so terrible. I got up at 7am each day, did a quick review of the RNS & wrote up some snippets. Then I felt so ill that I had to go back to bed, and nothing else happened for the rest of the day.

I'm only explaining this, because I don't want subscribers to think that poor quality reports are becoming the norm. Quite the opposite - I really want to boost the quality, now that the SCVRs are part of the Stockopedia subscription. You should see a marked improvement in the coming days/weeks, as I gradually get back on my feet again, health-wise. Thanks for bearing with me.

Also apologies to people who manage far worse health problems of their own. I'm lucky enough to have enjoyed good health for the last 50 years, but this last thing really did knock me for six. I did wonder if it was pneumonia actually. But anyway, it seems to be clearing up now.

T Clarke (LON:CTO)

Share price: 128p
No. shares: 43.0m
Market cap: £55.0m

AGM Trading update

... the Building Services Group, issues a Trading Update covering the period from 1st January 2019 to date.

This is a contractor for mainly complex electrical & IT fit-outs for office buildings. I visited one of their sites some time ago, and it was very interesting to see just how complex the work is for a major office block. The trouble is, that reinforced to me that the consequences of something going wrong, or being mis-priced and/or having cost over-runs, makes this quite a risky area to operate in. Especially as its profit margins are wafer thin.

This update is excellent, in its clarity, and providing hard figures, instead of waffle that we all too often get from other trading updates. So top marks to the company & its advisers;


The 17.5p EPS figure coincides with the Stockopedia forecasts. That…

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TClarke plc is a United Kingdom-based building services company, which delivers electrical, mechanical, and information and communications technology (ICT) services. The Company provides electrical and mechanical contracting and related services to the construction industry and end users. Its geographical segments include London and South East, Central and South West, the North and Scotland. The Company's businesses include Intelligent Buildings Green Technologies, Facilities Management, Transport, Mission Critical, Manufacturing Services, Residential & Hotels, M&E Contracting and Design & Build. The Company within its M&E contracting business has capabilities in sectors, including commercial offices, retail, education, healthcare, financial services and media. Its Manufacturing Services business includes in-house precision prefabrication and engineering services. Its projects include Beckley Court, Chiswick Park, Kettering Hospital, Project Nova, Mitie Care Home and Rathbone Square. more »

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Premier Technical Services Group plc (PTSG) is a United Kingdom-based company engaged in the maintenance, inspection, testing, repair and installation of permanent facade access equipment, fall arrest systems and lightning protection systems together with fixed wire and portable appliance testing and high level cleaning. The Company operates through three segments: Access and Safety, Electrical Services and High Level Cleaning. The Company's Access and Safety segment offers Safety Testing, Safety Installation, Cradle Maintenance and Cradle Installation. The Company's Electrical Services segment offers Lightning Protection, Fixed Wire Testing, Portable appliance testing (PAT) Testing, Fire Alarm and Extinguishers, and Steeplejack Services. The Company's High Level Cleaning segment offers Window Cleaning, Gutter Cleaning, Building Cleaning and Pressure Cleaning. The Company's Training Solutions division offers Training, Consultancy and Insurance Inspections. more »

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  Is LON:CTO fundamentally strong or weak? Find out More »

40 Comments on this Article show/hide all

bobsandy12 10th May 22 of 40

Welcome back to the world of the living is good

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cholertonandrew 10th May 23 of 40

Don’t worry Paul, everyone gets ill. I hope you’re on the mend. I wonder if Ed can arrange cover for if you or Graham are ill? I don’t think you should be left feeling you have to write when not well or feeling bad about it. Just an idea.


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davidjhill 10th May 24 of 40

In reply to post #475531

Andrews Sykes (LON:ASY) are they IHT qualifying as on AIM timarr? If so this might be a strong reason as to why they are listed as he would be able to pass his 90% share on to his sons at zero IHT. Not that I am any tax expert but just a thought.

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timarr 10th May 25 of 40

In reply to post #475576

Hi David

Exactly the suggestion I made on the other thread - but I was wrong. I'd forgotten that BPR for IHT purposes applies to all unlisted companies - for historical reasons AIM listed companies are counted as unlisted. So if they take Andrews Sykes (LON:ASY) private they can still benefit from the IHT relief.

Exactly the same situation applies at London Security (LON:LSC) where Tony Murray owns 99%. I can't think of a single reason why he'd do this, but he's a decorated WW2 pilot and he's nigh on 100, so I suppose he can do whatever he feels like.


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garbetklb 10th May 26 of 40

EU Supply (LON:EUSP) - agreed bid announced this afternoon at 40%ish premium. I have a v small holding.

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davidjhill 10th May 27 of 40

In reply to post #475586

lol, yes I suppose you're right. Not obvious !!

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Jonathan C 10th May 28 of 40

In reply to post #475476

It does sound like proper flu, in which case Paul take it easy as it will probably take at least a further two weeks for you to feel half-normal. If you push yourself too hard, you will set yourself back. It's a nasty nasty disease.


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jonno 10th May 29 of 40

In reply to post #475526

Hi Rhomboid
Great up date on Airea (LON:AIEA), just shows the benefit of going to AGMs. It sounds as if the company is really starting to benefit from the closure of the Rylux factory and despite the rise in the share price since last year still looks like a promising investment.

Your post prompted me to read the recent prelims according to which basic EPS were 8.21p however I struggle to reconcile this with Group basic EPS of 4.86p. I suspect I am missing the obvious, perhaps you can help. I initially thought that it may be due to exceptionals but there are none for the year to Dec 2018.

All the best

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rhomboid1 11th May 30 of 40

In reply to post #475616

Hi Jonno

P16 has the details...basically there’s a loss from discontinued activities at Ryalux 

I’d post a picture but the the tech doesn’t seem to work for me..

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jonno 11th May 31 of 40

Many thanks Rhomboid, penny dropped so to speak.

All being well will look to make an initial purchase next week.

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bestace 11th May 32 of 40

In reply to post #475531


You're not the only person to have raised the issue of Mr Murray's age and majority ownership of Andrews Sykes (LON:ASY). The point seems to come up as a negative whenever the company is discussed and as a shareholder of around 3 years' standing that's a risk I've been prepared to accept for now.

However your post has prompted me to look back at the ownership history and I don't think the situation is as everyone (including myself) seems to think.

This is what the latest annual report says about the controlling parties, which is consistent with the 'significant shareholders' section of the website:


That should be read in conjunction with two RNSs released over 10 years ago, firstly this one from 4/11/2008...

The Company has been notified today that on 26 October 2008, the Chairman, Mr Jacques-Gaston Murray, transferred his controlling interest in the Tristar Corporation in equal proportion to two trusts; the Jean-Jacques Murray Trust and the Jean-Pierre Murray Trust.  Accordingly these two trusts are now the ultimate controlling parties of the Tristar Corporation and subsequently the ultimate controlling parties of the Company. 

and secondly this one issued by London Security (LON:LSC) on 5/12/2008:

Further to the directors dealings announcement made on 5 November 2008 the Jean-Jacques Murray Trust has changed its name to the Ariane Trustee Company and the Jean-Pierre Murray Trust has changed its name to the Eden Trustee Company. These two trusts are now the ultimate controlling parties of the Tristar Corporation and subsequently the ultimate controlling parties of the Company. 

So it looks to me like Mr Murray senior has already passed on his majority interest to his sons, although he retains a direct ownership of 1.25m shares, which is just under 3% of the company.

After a bit of googling, The Ariane and Eden trusts both appear to be Panama-registered but Murray senior is not listed as a trustee of either. The two sons JJ Murray and JP Murray are both trustees of their respective trusts, and in addition Xavier Mignolet and Marie-Claire Leon (both NEDs of Andrews Sykes (LON:ASY) and London Security (LON:LSC) ) are trustees of both trusts.

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Bonitabeach 11th May 33 of 40

In reply to post #475526


Thank you rhomboid1 for an illuminating report on the AIERA (LON: AIEA) AGM. How refreshing to read from a clearly focused management lacking in waffle and excuses about it was too hot or too cold, there was not enough/too much football..... Plain speaking in Yorkshire is not always a myth.

Their website, AIREA PLC, confirms the favourable first impression. I find a lot to like in this business:

  • Focused management
  • Emphasis on selling the product
  • Geographic spread of customers
  • Underlying profitability - with free cash flow
  • Room to expand
  • Recognising value of good employees
  • Cheap valuation and decent dividend

Worthy of some investment I think.


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mammyoko 12th May 34 of 40

In reply to post #475676

Thanks very much for sharing this important information bestace

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Gromley 13th May 35 of 40

No real knowledge or insight on Premier Technical Services (LON:PTSG) but I am struck by one thing in Paul's commentary.

There was an interesting bear dossier released a little while ago, raising some pertinent questions about PTSG's accounts. A contact sent me a copy of this, which I read with interest. It came with a "do not forward to anyone" caveat, so my apologies to the people who have asked me to forward it to them - I'm not allowed to.

Together with Paul's analysis that :

I don't think there was any particular smoking gun in the dossier,

Whilst I can absolutely understand that, if one has some specific insight or analysis that gives one an edge, then on would wish to limit the number of people that know it (at least while one builds one's position).

This sounds to me more like  whisper campaign; publicise the fact there is a "bear dossier" and that there are question marks about the company which are not known to us the great unwashed.

For the avoidance of doubt, I am not suggesting that Paul is in anyway involved in this. Paul has laid out clearly and publicly the potential bear points as he sees them. If I were a shareholder then I would definitely be looking to kick the tyres on those points.

On the other hand if the 'dossier' comes from where I suspect, I would expect to see a drip feed of innuendo over the coming months that would be likely to at least hold back the share price. This in turn might present a good buying opportunity in the future.

Premier Technical Services (LON:PTSG) is therefore one that I am tempted to look at in more detail if and when I have the time.

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Graham Fraser 13th May 36 of 40

In reply to post #475586

Hi timarr,
Are you sure ? I understood that unlisted companies traded on Britdaq , for example, did not qualify for IHT relief.
Though, I am not certain, it is a while since I checked.

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tony akram 13th May 37 of 40

In reply to post #475676

I am holder here ,thanks for the info Bestace ....appreciated

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tony akram 13th May 37 of 40

In reply to post #475676

I am holder here ,thanks for the info Bestace ....appreciated

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jonno 13th May 38 of 40

As a follow to my earlier post, I bought an opening position in Airea (LON:AIEA) today at 72p. All being well the interims, which look like being in late August will vindicate the purchase.

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Richard Goodwin 13th May 39 of 40

In reply to post #475676

Great research Bestace!

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timarr 13th May 40 of 40

In reply to post #475866

Hi Graham

No I'm not 100% sure - the rules in this area are incredibly complicated. However, this is taken from the LSE guide to tax benefits, in the section on IHT relief:

The full 100 per cent exemption for a shareholding is only applicable to certain unquoted companies (see page 07). For these purposes, shares admitted to AIM are regarded as unquoted. The investment must be held for at least two years before a chargeable transfer for IHT purposes


But the rules may have changed, I'm not sure when that was written.


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About Paul Scott

Paul Scott

I trained as an accountant with a Top 5 firm, but that was so boring that I spent too much time in the 1990s being a disco bunny, and busting moves on the dancefloor, and chilling out with mates back at either my house or theirs, and having a lot of fun!Then spent 8 years as FD for a ladieswear retail chain called "Pilot", leaving on great terms in 2002 - having been a key player in growing the business 10 fold. If the truth be told, I partied pretty hard at the weekends too, so bank reconciliations on Monday mornings were more luck than judgement!! But they were always correct.I got bored with that and decided to become a professional small caps investor in 2002. I made millions, but got too cocky, and lost the lot in 2008, due to excessive gearing. A miserable, wilderness period occurred from 2008-2012.Since then, the sun has begun to shine again! I am now utterly briliant again, and immerse myself in small caps, and am a walking encyclopedia on the subject. I love writing a daily report for on most weekday mornings, constantly researching daily results & trading updates for small caps. Cheese! more »


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