Srt Marine Systems Share Discussion Threads

[crazycoops] 29/11/2016 19:25

Philburt, there is a whole universe of investment opportunities rather than the dichotomy you seem to have created. FWIW, I hold SRT but as part of a portfolio strategy. Each to their own I guess.

[countryman5] 29/11/2016 17:50

TP 3935. You are often right.LAV has put his name to £1 by March and so must be increasing his stake. It is not often that you can buy a £1 for 40p.

[philburt] 29/11/2016 16:37

2vdm - Thanks, looks like your buy has pushed the share price up and recouped my spread / buying costs already ! lol
Good luck!

[2vdm] 29/11/2016 14:24

Thanks Philburt. View appreciated. Couldn't get 10K purchase earlier with Hargreaves, but added 5K. looks like it takes minimal purchase to increase share price

[the prophet] 29/11/2016 13:33

YUMYUM

yes, that could do it.....or they announce significant deliverables delivered from one of the existing contracts.

[philburt] 29/11/2016 09:52

2vdm - I understand your reluctance. I think I'm probably of the same view as EE & TP on this and, despite some obvious risk, would prefer to be in today than miss out tomorrow.
Given my longer term objectives, and hopes of £1 to £3 share price long term, I'm not so worried if I top up at 40p, 35P or 45p, so in I jump! lol
The alternative for me was for this cash to sit in FTSE100 blue chip shares (my employer's scheme), which would be safe but not subject to much growth.
Good Luck all.

[yumyum] 29/11/2016 09:00

and 'pale into insignificance'.

However, for the share price to be set alight it should only take one decent contract to be won and announced. That could come tomorrow....

[goodapple] 29/11/2016 08:45

...and then there's the jar of jam...

[eagle eye] 29/11/2016 08:37

2vdm, I was impressed at the last AGM of how unprepared Simon Tucker was at putting any figures into the market, despite incessant questioning to do so.
In the early years he was only too prepared to give his view, and ended with egg on his face more than once. Publicly listed companies should under promise and over deliver, not the other way round.
I believe ST is now hard wired to be cautious. Maybe the board (led by Simon Rogers who is particularly pragmatic and logical) has successfully got the message across.
Knowing how enthusiastic Simon is about the business it must have been very difficult at first, but I believe he has now got there, much to his credit.

[2vdm] 29/11/2016 07:53

Philburt, I'm like you in my positioning here in %holding of my SIPP and age (sadly),and agree about not for widows etc, but having been her since 2009/10 like other LTHs, I'm wary about topping up again. I suspect that it will be hard to steadily add as things progress (earnings/profit from Indonesia and hopefully new contracts), as I suspect the share price will be leaps like we have seen this year with pull backs rather than steady rises. I appreciate that ST doesn't have a crystal ball, but has he really learned to under promise and over deliver than vice versa? Comments always welcome, particularly Le Val, TP eagle et al.

[the prophet] 28/11/2016 16:29

Some excellent points made in recent posts.

I'm bullish, but that is also tempered with the knowledge that it's all taken a lot longer to get to where we are now, but then, to be fair, where we are looks a lot better than a few years back!
Does that make any sense?
By that i mean the move from SRT supplying boxes, last in the queue to being a supplier of systems like MDM, VTS etc, moving up the food chain. We've alll been disappointed in the past when supposedly large deals turn into damp squibs, Mexico, EU Fisheries, US to name but three. So what a delight to see the Indonesian contract blow previous estimates of it's value clean out the water. Then there is talk of follow on deals for the likes of Bahrain.

I do feel a certain uneasiness re Indonesia in that most of the short term visible revenue is tied up in one contract. That is a risk. I will be happier when we have visibility on substantive revenues from a number of sources. Saudi has at least kicked off and from the sound of the recent interims more projects are expected to start in the second half.

SRT have been very clear that the deliverables will be delivered this half, the situation is, imo, very different to past ones, where we've been sweating on a contract coming in to make the figures. Thsi time SRT has the contract, just a question of delivering against that now.

[lavalmy] 28/11/2016 16:26

fft

I don't think there is any of Phase 1 that was not already recognised last year, which was indeed required to meet last year's unassuming numbers. This year's equally unassuming numbers will require a 340% increase in revenues from H1 to H2 to be met.

However, I don't really think it matters much whether they actually deliver sufficient deliverables in H2. It does matter, and hugely so, that they announce some of the 'number of large VMS and MDM projects that we expect will result in the completion of significant deliverables ...' at least as contracts with size, scope and expected timelines indicated. The biggest component of deliverables in H2 will be Indonesia, but it is likely that only a part of Phase 2 will be delivered this FY and that only the actual deliveries will be subject to RNS. The overall scope of Phase 2 will be remain confidential.

It is after all not even two weeks since the interims. My reading of the accounts suggest a £4-6 million deliverable in the reasonably near future, more if they can ship some of the transponders. I really don't think that they will take the risk of ordering more stock of anything unless and until actual contracts are signed. Both the VMS and MDM projects will require systems first, which have a relatively short lead time but do require configuration, and only afterwards large numbers of transponders.

In summary, I expect them to come in somewhere around this year's forecast mainly due to Indonesia, announce several new projects before the new FY and start shipping sizeable amounts in 17/18.

[fft] 28/11/2016 15:58

Something has to be announced before the end of h2 or we could be looking at a re-run of a few years ago where orders were expected but never materialised. Indeed we were told that they were delayed but they didn't seem to appear in the next fy either. A very embarrassing profit warning appeared the day after the year end.Indeed, unless they are announced soon it's hard to see how any revenue from them could get into h2.Phase 1 of Indonesia is under way, but would expect an rns when phase 2 is agreed on and started. Given that money from phase 1 was recognised in the last fy I wonder how much from phase 1 is left to prop up h2 if nothing else turns up ?

[yumyum] 28/11/2016 14:44

I remain bullish but disappointed in the lack of JAM. Or is the company only 'just about managing'? We need more contract wins so there are multiple projects on the go....and some decent profitability! And some share buybacks....and a takeover. All before Xmas (next year I suppose).

[philburt] 28/11/2016 14:32

Lav - I think I'm with you on this, and would be happy to see £1. Anything above really will be icing on the cake!

ee - SRT are an eye-wateringly large part of my portfolio, but for a good reason.
My holdings are in a SIPP I created from all the waifs and strays of old pensions I had floating about. I'm treating it as found money and I'm happy to be highly speculative with it!
The latest tranche (funds liberated from my company share scheme) has gone into an ISA.
Currently about 80% is in SRT, with 20% in NIPT (bounced from VIY originally).
It's very risky, but intentionally so, as I'm close to my planned retirement date.
Not for widows and orphans....

[eagle eye] 28/11/2016 14:28

LaVal, You make some good points here.
I think the key question is when does the revenue break out beyond the £10m barrier.
If that could be achieve over the next couple of years, then T/O of £25 to £30m could give rise to EPS of 5 or 6p. Put that on a PER multiple of 15 or 20 and that looks attractive and would be a powerful share price driver.
But there have been several false dawns here. The USCG mandate was at one time said to be worth $20m and that has been a damp squib so far. Recurring revenues with eEarth were supposed to chip in meaningfully at some stage, and core revenues haven't ramped up as fast as anticipated.
There is a capable and hard working team at SRT, no issues there, but it would de-risk the situation if there were more contracts smoothing the revenue profile.
The Far East contract in March was a promising start, but I'd rather have 3 x $33m contracts than a single $100m one.

[eagle eye] 28/11/2016 14:11

Philburt, In my view it depends on what % SRT is of your portfolio.
Position weighting and timing are key as historically you've had to be nimble to make money. Long-term shareholder haven't done well so far.
Based on H1 revenue of £2.7m, the current market cap of £50m looks a bit rich.
Lots bubbling below the surface though, or at least I'd like to think so!

[lavalmy] 28/11/2016 14:09

Raging, Philburt, raging.

In the short term, I expect chunky step-ups on contract news and delivered deliverables. How many and how big is the question.

Then upgraded broker forecasts for next year on the back of those.

So, at a guess, £1 by end March, £1.50 by the end of 2017 as double digit EPS becomes clear.

And I expect it to flatline, give or take, unless it gets swept up in a speculative bubble, until the quantum of recurring revenues becomes visible. Frankly, no one really knows what governments will want and how much they will pay for the added extras until they have the basic system up and running. My guess is still that they will get to double digits on that too.

Thereafter, who knows what new applications will be added to AIS and/or to the MDM systems? I mean it was only about a year ago that the idea of radar/CCTV/infra-red/AIS fusion was mentioned here and a contract along those lines signed with Indonesia for double what we were expecting.

So I think over the 4-5 year horizon £3.00 might be achievable, particularly if they use cashflow in excess of operating requirements to reduce the number of shares at much lower prices.

[philburt] 28/11/2016 13:20

I'd be interested to know how bullish people are feeling about SRT at the moment?
I've just topped up with 30k shares for the first time in a long while (last at about 20p). That's about a 25% add for me, so I guess I'm declaring as a Bull.
I'm a long term holder, with room to let it run at least another 3 or 4 years.
Any thoughts?

[lavalmy] 27/11/2016 06:07

Well spotted TP. It certainly seems that they are going ahead with the project. The winter sitting ends on my birthday, 16th December. So some time next year as Simon indicated seems reasonable.

I suppose the next thing to look out for, apart from the legislation being passed, will be more reports about the government issuing the devices free to the fishermen. I have no doubt that part of the eE/SRT divorce was related to this. Simon was quite specific about the fact that the Indians gleaned what they could from eE. He certainly didn't suggest that they had done likewise with SRT.

What remains unclear is whether SRT will be able to get recurring revenues from this.

[the prophet] 26/11/2016 17:18

hjbRe ' up the garden path', not that I was aware of or can remember.I think India was always going to use their own space agency (ISRA ? Or something like that) for tracking. There was a tie up with ISRA and EE, but the good news now is SRT are able to suggest or offer other options other than EE.Regarding back handers etc, I assume that will all be in the domain of the local partner Elcom.

[hjb1] 26/11/2016 17:05

TP, unfortunately with the likes of India being upto "scratch" means how big is your budget for backhanders.

[hjb1] 26/11/2016 15:57

is India one of the reasons for the "divorce" from Exactearth?

[hjb1] 26/11/2016 15:42

TP, one would like to think it was all above board and straight, we will see.Did they not lead ST up the garden path regards Absea or something?

[the prophet] 26/11/2016 15:32

HjbI don't think they will be able to copy, this is a question of national security and I can't see the contract going to anyone who isn't up to scratch. SRT will be there right in the mix, I feel sure. I think SRT use Elcom in India as their local partner. It's good to know there is this sort of stuff coming up on the ranks.