An under-rated microcap on a bargain-basement rating

REACT (REAT:77p) has reported its fifth year of organic growth even though the UK specialist cleaning and soft facilities management services group was up against strong comparatives. It was achieved by retaining customers, successfully leveraging cross-selling and upselling opportunities and driving operational efficiencies, alongside a steady stream of new customer wins.

For instance, the renewal and expansion of a maintenance, cleaning and hygiene services contract with a major university, valued at £3.8mn over three years, represented a near-doubling in value of the original contract. REACT also expanded a facilities management (FM) services agreement with an NHS trust in the Midlands (contract value of £0.8mn over three years), and upsold an incremental new contract with a large FM customer, where it provides emergency specialist services to a large public sector ministry spending £0.5mn per year.