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REACT Group plc (GB:REAT)
:REAT

REACT Group plc (REAT) AI Stock Analysis

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GB

REACT Group plc

(LSE:REAT)

Rating:65Neutral
Price Target:
62.00p
▲(5.08%Upside)
The overall stock score reflects a strong financial performance overshadowed by weak technical indicators and valuation concerns. Notably, positive corporate events provide some support, but the bearish technical outlook and negative P/E ratio weigh heavily on the score.

REACT Group plc (REAT) vs. iShares MSCI United Kingdom ETF (EWC)

REACT Group plc Business Overview & Revenue Model

Company DescriptionREACT Group plc (REAT) is a specialist cleaning, hygiene, and decontamination company based in the United Kingdom. The company operates across various sectors, including healthcare, education, transport, retail, and infrastructure. REACT Group provides a wide range of services, including deep cleaning, specialist cleaning for hazardous environments, infection control, and emergency cleaning response, designed to maintain high standards of hygiene and safety.
How the Company Makes MoneyREACT Group plc generates revenue through a variety of cleaning and decontamination services offered to diverse sectors. The company's key revenue streams include contracted cleaning services, which provide regular income through long-term agreements with clients in healthcare, education, and other sectors. Additionally, REACT earns from ad-hoc and emergency response services, which are called upon during urgent situations requiring immediate intervention, such as contamination incidents or outbreak controls. The company may also engage in partnerships with facility management firms, enhancing its service offerings and client reach. Factors such as regulatory compliance requirements and heightened awareness of hygiene standards contribute significantly to its business growth and revenue potential.

REACT Group plc Financial Statement Overview

Summary
REACT Group plc displays strong financial performance with significant revenue growth and improved operational margins. The balance sheet is solid, with low leverage and strong equity support, while cash flows are robust, albeit with some volatility. Continued focus on improving net income and managing cash flow fluctuations will enhance financial stability and growth prospects.
Income Statement
85
Very Positive
REACT Group plc has demonstrated strong revenue growth, increasing from £3.1M in 2019 to £20.7M in 2024. Gross profit and net profit margins have improved significantly over time, with the latest figures at 27.6% and 0.1%, respectively. The company has turned around its EBIT from negative figures in 2022 to positive in 2024, indicating enhanced operational efficiency. However, net income remains low, which could be an area for improvement.
Balance Sheet
80
Positive
The balance sheet shows a healthy equity position with a debt-to-equity ratio of 0.09, indicating low leverage and strong equity funding. The equity ratio stands at 62.2%, reflecting a robust asset base funded by equity. Return on equity has improved, although net income remains marginal. The company's financial stability is commendable, though increasing profitability would strengthen the balance sheet further.
Cash Flow
78
Positive
The cash flow statement reflects positive operating cash flow and strong free cash flow, with free cash flow growing significantly over the years. The operating cash flow to net income ratio is high, indicating effective cash generation from operations. However, fluctuations in free cash flow due to varying capital expenditures suggest some volatility in cash management.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
20.83M20.75M19.58M13.67M7.70M4.36M
Gross Profit
4.72M5.72M5.24M3.26M2.37M1.45M
EBIT
667.00K287.00K251.00K-511.00K446.00K211.00K
EBITDA
2.43M2.07M2.06M410.00K394.00K261.00K
Net Income Common Stockholders
223.00K18.00K50.00K-701.00K389.00K188.00K
Balance SheetCash, Cash Equivalents and Short-Term Investments
400.10K1.78M2.12M979.00K633.00K1.78M
Total Assets
441.86K13.92M16.41M15.68M6.23M3.16M
Total Debt
0.00784.00K904.00K1.08M170.00K43.00K
Net Debt
-400.10K-994.00K-1.22M100.00K-463.00K-1.74M
Total Liabilities
91.88K5.26M7.91M7.34M3.44M967.00K
Stockholders Equity
349.98K8.66M8.49M8.34M2.79M2.19M
Cash FlowFree Cash Flow
2.43M2.38M2.33M-888.00K361.00K237.00K
Operating Cash Flow
2.63M2.79M2.44M-773.00K432.00K281.00K
Investing Cash Flow
-1.55M-2.42M-1.42M-8.41M-2.19M-42.00K
Financing Cash Flow
-237.00K-233.00K-360.00K7.00M228.00K1.10M

REACT Group plc Technical Analysis

Technical Analysis Sentiment
Negative
Last Price59.00
Price Trends
50DMA
64.42
Negative
100DMA
69.82
Negative
200DMA
76.99
Negative
Market Momentum
MACD
-1.99
Positive
RSI
36.39
Neutral
STOCH
31.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:REAT, the sentiment is Negative. The current price of 59 is below the 20-day moving average (MA) of 65.42, below the 50-day MA of 64.42, and below the 200-day MA of 76.99, indicating a bearish trend. The MACD of -1.99 indicates Positive momentum. The RSI at 36.39 is Neutral, neither overbought nor oversold. The STOCH value of 31.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:REAT.

REACT Group plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
66
Neutral
$4.51B12.295.40%248.53%4.14%-12.41%
65
Neutral
£21.46M22.023.70%1.42%10.91%1300.00%
65
Neutral
£13.95M900.00-3.75%6.90%-242.86%
GBDSW
61
Neutral
£14.32M49.143.34%3.07%-0.95%
GBCPP
49
Neutral
£7.45M-177.83%-18.97%
48
Neutral
£17.04M-2.79%-10.05%96.65%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:REAT
REACT Group plc
59.00
-15.00
-20.27%
GB:VNET
Vianet Group plc
74.00
-31.99
-30.18%
GB:CPP
CPP Group plc
81.25
-90.75
-52.76%
GB:MIND
Mind Gym
17.00
-21.50
-55.84%
GB:DSW
DSW Capital Plc
57.00
11.28
24.67%

REACT Group plc Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
REACT Group Reports Strong First-Half Performance Amid Market Challenges
Positive
May 27, 2025

REACT Group plc reported a strong first-half performance for FY 2025, with a 14% increase in revenue to £12.1 million, driven by the acquisition of 24hr Aquaflow Services. The acquisition contributed significantly to both revenue and EBITDA, with a 35% rise in gross profit and a 12% increase in adjusted EBITDA. Despite market challenges, the integration of 24hr Aquaflow Services has opened new revenue streams and cross-selling opportunities, helping to mitigate pressures in specialist cleaning services. The company remains focused on mid-market opportunities and operational efficiencies through initiatives like Project Sparkle, while adopting a cautious approach to new business conversion due to economic pressures.

Business Operations and Strategy
REACT Group PLC Sees Change in Major Holdings
Neutral
May 19, 2025

REACT Group PLC has announced a change in its major holdings, with Dowgate Group Limited increasing its voting rights to 12.08% from a previous 11.87%. This acquisition of voting rights by Dowgate Group Limited, through entities like the Bank of New York Mellon and Royal Bank of Canada, signifies a strategic move that could impact the company’s governance and stakeholder dynamics.

Other
REACT Group PLC Announces Change in Shareholder Voting Rights
Neutral
Apr 29, 2025

REACT Group PLC has announced a change in its shareholder voting rights, with Dowgate Group Limited reducing its stake from 12.16% to 11.87%. This adjustment in voting rights reflects a minor shift in the company’s ownership structure, which may influence future shareholder decisions and company governance.

Business Operations and Strategy
REACT Group PLC Announces Change in Major Holdings
Neutral
Apr 25, 2025

REACT Group PLC announced a change in its major holdings, with Dowgate Group Limited increasing its voting rights to 12.16% from a previous 11.95%. This acquisition of voting rights by Dowgate Group Limited, through entities like the Bank of New York Mellon and Royal Bank of Canada, signifies a strategic move that could impact the company’s governance and stakeholder dynamics.

Shareholder MeetingsBusiness Operations and Strategy
REACT Group plc Successfully Passes All AGM Resolutions
Positive
Mar 27, 2025

REACT Group plc announced that all resolutions proposed at their Annual General Meeting were successfully passed. This outcome reflects strong shareholder support and may positively impact the company’s strategic direction and operational stability, reinforcing its position in the facility management industry.

Shareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
REACT Group Reports Strong Performance Amid Market Challenges
Positive
Mar 27, 2025

REACT Group plc held its Annual General Meeting, highlighting its strong performance despite challenging market conditions. The company has seen positive returns from sales and marketing initiatives, with a robust pipeline of new business. The integration of 24hr Aquaflow Services has been successful, evidenced by a new contract for commercial drainage services. The development of Project ‘Sparkle’, a digital platform for scaling the window cleaning business, is progressing well. Despite market headwinds, REACT remains confident in its divisions and is focusing on mid-market opportunities to expand its market share.

Business Operations and Strategy
REACT Group Director Increases Shareholding, Signaling Confidence
Positive
Mar 19, 2025

REACT Group plc announced that Robert Gilbert, a Non-Executive Director, has purchased 15,281 ordinary shares at 65.60 pence per share, increasing his total shareholding to 19,584 shares, which represents 0.08% of the company’s total issued share capital. This transaction reflects confidence in the company’s market position and could potentially influence stakeholder perceptions positively, highlighting the company’s ongoing commitment to strengthening its leadership and market presence.

Business Operations and StrategyRegulatory Filings and Compliance
REACT Group PLC Announces Change in Voting Rights
Neutral
Mar 19, 2025

REACT Group PLC, a UK-based company, has announced a change in its voting rights structure due to an acquisition or disposal of shares by Dowgate Group Limited. As of March 19, 2025, Dowgate Group Limited holds 11.95% of the voting rights in REACT Group PLC, a slight decrease from their previous position of 12.03%. This change in voting rights could influence the company’s decision-making processes and impact its strategic direction.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.