Srt Marine Systems Share Discussion Threads

[lavalmy] 09/3/2024 07:32

A thing that struck me about the RNS was the detail about when they would be issuing statements in the future, particularly that the 15 months ending this June would be out in October as opposed to by December in years thereafter. I am certain that there is no legal requirement for this.

Whatever the financial ratios required to bid on these contracts are, they are based on the last published accounts and it seems to me that they want the June 2024 accounts out so as to be used for this. The contrast between March 2023 and the projected position June 2024 is stark, gross debt of £8mn supported by equity of £10.3mn compared to gross debt of £13.6mn with £31.6mn equity. Had they not shifted the accounting period, the 2024 ratios would be in the ballpark of 2023.

Most countries do have financial strength criteria for bidding, often including a haircut to equity for other projects being undertaked by the entity, but that has not hampered SRT to date despite the state of its balance sheet which might generously be described as parlous. So where is this 'one specific jurisdiction we must meet certain minimum financial ratio criteria related to the size of the target new project in order to bid and contract'? Indonesia dosn't seem to bother and any complaints by competitors about contract awards in the ME are likely to be counter-productive.

The one place where SRT is likely to come under scrutiny is the Philippines. The complaint to the Ombudsman about the BFAR contract does not seem to have reached any conclusion but a valid criticism of the award would have been the financial condition of the winning bidder. I assume that the adherence to the criteria is precisely to avoid any complaints by rivals which might gum up the smooth execution of these projects.

The broker's note is confusing about what is in the 2025 forecast, as they have not updated the narrative on the Fisheries 1 and CG3 contracts in the pipeline. Only £8mn is expected from the BFAR whereas £30mn is included from the PCG. Marcos has approved the revised AFP modernization programme called Re-Horizon 3 which is linked to the PCG modernization programme. I expect that these CG3 contracts are currently making their way through the budget process with publication of that in the summer and, assuming congressional approval in the autumn as usual, tendering can commence prior to the new financial year. That of course fits nicely with the publication of 2024 accounts. We should be able to see what is on the cards before the fourth Monday of July when the state of the nation address is due, as the draft budget has to be done by then, if not in press reports before then.

[extrader] 08/3/2024 23:59

Hi Countryman5

In your 0743 today you say, inter alia, .."A vast amount of kit is waiting at HQ to allow the speedy delivery of these first milestones...".

What is the basis for this statement, pls?

As Lenin is supposed to have said ' Trust is good, but checking is better' ;->

TIA

[countryman5] 08/3/2024 22:51

Lav is spot on by highlighting the ability of SRT to generate cash and pay down debt. The systems business generates about 25% pbt. The transceivers currently covers about 60% of the £9 million overheads. if Nexus and DAS deliver the profit from systems will go straight to the bottom line.
The brokers note mentions again the £1.4 billion validated sales pipeline and most people dismiss this as fantasy. The NOMAD would not be allowed to print this without seeing evidence of discussions supporting this figure. There is no certainty that these discussions will lead to contracts and there is no certainty that SRT will win these contracts. There is one coastguard contract where $1billion is mentioned over 10 years.
if only £1 billion of contracts are won in the next few years this represents a lot of reward for the company.
RE DJT above, Simon is merely stating the obvious,nothing is signed until it is signed.Read the last sentence.

[pinkfoot2] 08/3/2024 20:36

You can’t value FOMO mate

Today marked the day when contracts aren’t announced just before the year end anymore.It doesn’t wash after the latest cash raise-something I pointed to months ago.

To be honest, I’m surprised the market reacted the way it has-moving the year end to disguise a huge profit warning should be a reason to punish but that’s FOMO

I said earlier-it’s time to put the company up for sale as the public arena clearly offers very little anymore

[mjneish] 08/3/2024 17:23

Here's SRT's revenue and EPS progress since 2012. All figures are in millions of Pounds for 12 months to the 31st of March of the stated year. I defer to others for comment.

2012 6.2
2013 10 1.3p
2014 6.1 (1.3p)
2015 8.5 0.0p
2016 10.7 0.34p
2017 11 1.34p
2018 5.3 (4.09p)
2019 20.56 2.43p
2020 18.9 (3.93p)
2021 8.3 (3.13p)
2022 8.2 (3.53p)
2023 30.5 0.04p
Post edited to add EPS figures.

[yumyum] 08/3/2024 13:46

amt, you made me smile and I fully agree. Yes I can't understand why I keep dabbling here. Its hopeless. Ten years on and still only promises to show for it

[leighford] 08/3/2024 13:26

Yump
Not in the least frustrated, SRT have a long track record and it’s clear how they operate. I can sympathise with Tucker.
Re my ‘pointlessR17; post, that takes the biscuit with your stupid assumptions post.
You might try sticking to the subject, SRT, instead of making wild assumptions about posters. Try it.

[yump] 08/3/2024 13:04

Leighford
Yes you and 2 others. Its your first post. Perhaps you’ve been here all along and have just got so frustrated you just had to post.

Why not enter the “discussion221; before you come out with a pointless post.

[lavalmy] 08/3/2024 11:52

I found the new broker's note more interesting than usual.

Firstly, they say about Bakamla

'SRT is ready to deliver equipment once the agreement has been finalised and – importantly – the time to revenue recognition is expected to be short (ie not several weeks).'

We know that the ME equipment has been ready for quite some time.

Accordingly,

'By 15m FY24E to June, we do not expect any further drawdown of debt within the three months to June. Instead, the company is expected to have paid back £1m of the Barclays loan and a portion of the supplier loan.'

And as a result of SRT being at peak working capital requirement right now,

'In FY25E, the cash position is expected to unwind significantly. We expect positive working capital of £18.2m and £29.4m FCF, which will enable the company to repay c. £10.2m in bank debt and loan notes, leaving forecast net cash position of £18.8m equivalent to £22.1m gross cash and £3.4m gross debt.'

Sounds very promising.

I expect that they left the decision on extending the year-end until the last possible moment and events could move very fast here. Extrader was probably prudent in getting his extra shares now.

[philburt] 08/3/2024 11:13

Yump, maybe these guys are just here to soften up long term holders for a buy out? Just saying…㊂0;

[leighford] 08/3/2024 11:02

If you were referring to me Yump my comment falls under the category of ‘fair comment’.
This is a discussion board, not a ‘supporters217; board.
Then you gone into assume any ‘non supporter’ must be an unsuccessful investor sitting on big losses!
That is one big stretch. Certainly investors won’t have got rich here over the last 10 years or so. Tucker is an amiable chap and he’s done a good job building the company. But it’s not been great for investors. Can’t help but think this company would be better off under the wings of a larger enterprise.
It’s a cash guzzler and the aims of ensuring sufficient cash and keeping investors happy with extended procurement time lines has been a hard one to satisfy.
Please desist from further stupid assumptions.

[amt] 08/3/2024 10:53

Yes I can't understand why I keep dabbling here. Its hopeless. Ten years on and still only promises to show for it. Much better opportunities elsewhere such as Bango

[pinkfoot2] 08/3/2024 10:41

As I keep saying this company cannot trade properly as an independent-cash, working capital, deadlines.All troublesome.

I would be putting it up for sale and testing the market.

Cavendish note is out-a lot of moving parts in the numbers.Has to be the most creative way of actually saying ‘warning’; without saying it so that’s a plus!

[yump] 08/3/2024 10:18

There must be a sad little group of first poster RNS chasers on advfn.

That’s 2 more. 3 this morning by the look of it.

I guess it could also be a group of particularly unsuccessful AIM investors who now have no stocks they can contribute anything positive to, as they’re all sitting on big losses.

I certainly can’t find any stocks they support.

[eagle eye] 08/3/2024 10:11

Posted last week:

'In an investors eyes, SRT's biggest problem is delivering on forecasts and generate cash flow.
Operationally behind the scenes I think things are shaping up pretty well.
The business model is the problem and management have little control over that'.

[leighford] 08/3/2024 09:49

Might as well extend the reporting period out till say 2030, or why not abolish the listing and just go private?
SRT just can’t get a handle on these time lines can they, despite what they say are close relationships with the customer.
The latest swerve is inventive, but they can only pull this stunt once.

[effortless cool] 08/3/2024 09:42

I've added 200,000 on his morning's weakness.

It's last chance saloon for management, I think, if they don't deliver in Q2. Hope I'm not throwing good money after bad.

[meijiman] 08/3/2024 09:33

It's a pure and simple lifestyle company. Has been from inception.

[pinkfoot2] 08/3/2024 09:18

The year end has gone forward with the clocks!

[varies] 08/3/2024 09:09

It looks as if sales for the 15 months to June 2024 are now expected to be similar to those previously expected for the 12 months to March.

[redwing1] 08/3/2024 08:52

I honestly don't think I have ever come across such a poor company. I have followed SRT for about twenty years and every year is like 'groundhog day'. There is the promise of big orders just around the corner followed every second year by a fund raise to keep the lights on.

Let's face it, there should be huge demand for the products that SRT sells (especially with all the piracy issues currently faced by boats of many kinds) and yet there appears to be an insurmountable issue getting Maritime authorities to commit to buying the kit. Something doesn't add up.

Today's excuse sounds ridiculous and how Simon Tucker still has a job is beyond me.

[yump] 08/3/2024 08:47

Oh look another first post RNS chaser. Must have a pretty dismal life - can’t help but feel sorry for them.

Mickey Mouse reference is presumably ironic when its a Mickey Mouse post !

[mr macgregor] 08/3/2024 08:37

That's the most ludicrous and convoluted profit warning I've ever seen, and I've seen a few. Mickey Mouse CEO.

[pinkfoot2] 08/3/2024 08:20

Ok Yump-what’s the point of a set of accounts?How do you value/measure/compare?

Changing the year end 3 weeks before the year end is poor-very poor.

The noose tightens.The jam has to turn into monetary value.