REACT Group plc (REAT) AI Stock Analysis

• Market Cap: £13.95M
• Dividend Yield: N/A
• Average Volume (3M): 56.21K
• Price to Earnings (P/E): 900.0
• Beta (1Y): 0.53
• Revenue Growth: 6.90%
• EPS Growth: -242.86%
• Country: UK
• Employees: 372
• Sector: Industrials
• Sector Strength: 90
• Industry: Specialty Business Services
• EPS (TTM): -0.01
• Shares Outstanding: 23,636,610
• 10 Day Avg. Volume: 103,556
• 30 Day Avg. Volume: 56,214
• PEG Ratio: 2.43
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 65 Neutral
• 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 Business Overview & Revenue Model

Company Description

REACT 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 Money

REACT 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

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

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

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
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
20.83M	20.75M	19.58M	13.67M	7.70M	4.36M
	Gross Profit
4.72M	5.72M	5.24M	3.26M	2.37M	1.45M
	EBIT
667.00K	287.00K	251.00K	-511.00K	446.00K	211.00K
	EBITDA
2.43M	2.07M	2.06M	410.00K	394.00K	261.00K
	Net Income Common Stockholders
223.00K	18.00K	50.00K	-701.00K	389.00K	188.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
400.10K	1.78M	2.12M	979.00K	633.00K	1.78M
	Total Assets
441.86K	13.92M	16.41M	15.68M	6.23M	3.16M
	Total Debt
0.00	784.00K	904.00K	1.08M	170.00K	43.00K
	Net Debt
-400.10K	-994.00K	-1.22M	100.00K	-463.00K	-1.74M
	Total Liabilities
91.88K	5.26M	7.91M	7.34M	3.44M	967.00K
	Stockholders Equity
349.98K	8.66M	8.49M	8.34M	2.79M	2.19M
Cash Flow		Free Cash Flow
2.43M	2.38M	2.33M	-888.00K	361.00K	237.00K
	Operating Cash Flow
2.63M	2.79M	2.44M	-773.00K	432.00K	281.00K
	Investing Cash Flow
-1.55M	-2.42M	-1.42M	-8.41M	-2.19M	-42.00K
	Financing Cash Flow
-237.00K	-233.00K	-360.00K	7.00M	228.00K	1.10M

REACT Group plc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 59.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 64.53, below the 50-day MA of 63.98, and below the 200-day MA of 76.81, indicating a bearish trend. The MACD of -2.08 indicates Positive momentum. The RSI at 36.39 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.49B	12.34	5.40%	248.65%	4.13%	-12.33%
VNET	65 Neutral	£21.46M	22.02	3.70%	1.41%	10.91%	1300.00%
REAT	65 Neutral	£13.95M	900.00	-3.75%	―	6.90%	-242.86%
DSW	61 Neutral	£14.32M	49.14	3.34%	3.07%	-0.95%	―
CPP	49 Neutral	£7.45M	―	-177.83%	―	-18.97%	―
MIND	48 Neutral	£17.04M	―	-2.79%	―	-10.05%	96.65%

REACT Group plc Corporate Events

REACT Group Reports Strong First-Half Performance Amid Market Challenges

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.

REACT Group PLC Sees Change in Major Holdings

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.

REACT Group PLC Announces Change in Shareholder Voting Rights

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.

REACT Group PLC Announces Change in Major Holdings

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.

REACT Group plc Successfully Passes All AGM Resolutions

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.

REACT Group Reports Strong Performance Amid Market Challenges

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.

REACT Group Director Increases Shareholding, Signaling Confidence

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.

REACT Group PLC Announces Change in Voting Rights

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.