Srt Marine Systems Share Discussion Threads

[amt] 22/3/2018 07:41

Ok if they meet the 15m sales and 1.3m profit then pe of about 18 sounds about right for current value.

[lavalmy] 21/3/2018 13:46

I had another listen to Paul Scott's interview - well worth a refresh, here



It seems that they were expecting to shift the bulk of the stock after all, but that might have changed somewhat if Ecuador has replaced Vietnam on the to do list.

[philburt] 21/3/2018 13:43

Well, I'm letting the money talk and buying a few more! When I say money, I really mean 'back of the sofa' change, but it shows support nevertheless.... :)

[astralvision] 21/3/2018 10:55

Yes, then we are agreed, there has to be a better way of doing this, current way is very unsatisfactory.

[lavalmy] 21/3/2018 10:53

Don't think it fills anyone with confidence.

It seems a throwback to when they were just a box shifter, as opposed to more a systems company with projects spread over several periods. It would make sense to adjust their policy at some stage, maybe before the final accounts?

It is never going to mirror cash receipts either. A glance at the Philo 2 payment terms seems to be a mixture of upfront, retentions, on-going once the upfront is used, performance guarantees etc. I do remember Tucker's interview with Paul Scott where he mentions discussions about when an item should be considered as delivered and hence invoiceable, that with regard to the very same Philo 2 project.

[fft] 21/3/2018 10:43

Also, booking revenue and then not saying what the terms of the contract are, wrt when cash is due to be received won't work any more. They did it once, spun things out for a year , then had to admit no cash. In the meantime the share price shot up and the directors exercised loads of zero cost options that no one knew about !! You couldn't make it up !! If they returned the shares it might make me feel better about MGMT.

[astralvision] 21/3/2018 10:34

Not saying it isn't transparent, but it's not a process that fills me with confidence and I would prefer not to always be in the position of waiting for a big contract and booking a big a lump as soon as possible to try to meet a forecast.
This seems to be what is happening and it is my view that they need to take a long hard look at this, as in the long run I don't think it is doing anyone any favours.
All imo.

[lavalmy] 21/3/2018 10:30

astral

I am not sure that it does comply with normal accounting rules, but they have got away with it before. It is fairly transparent though. With the Indonesian order, I understand that they shipped some product, invoiced for that part of the first phase, as was contractually agreed, but never got paid up front, as was also agreed. So the actual product sitting in Indonesia never actually changed hands and has since been reallocated. Sure, there was a lot a 'systems/software' on the invoice as well.

If they are to meet the forecast, I would imagine something similar. They may have already shifted some stock in anticipation, although a lot of the stock at hand is Class A so probably not required for the contracts envisaged.

[astralvision] 21/3/2018 10:30

ps
A few years ago we had the 'will drop into next f/y if we miss, can't help it if a contract falls a few days later'

It gets a bit hazy but my recollection was it never did quite drop into the following f/y and that the following f/y was just a struggle as the previous f/y despite thinking that a big dollop of revenues was going to be coming only a matter of days into the new f/y.

[astralvision] 21/3/2018 10:18

LaValmy
That is tue, fair point. That was a very disappointing year and to guide £6m-£13m so close to the year end and hit right at the bottom of it was not good.

Countryman5 seems to be saying that SRT are waiting on this Philippines contract, which has been received by a 3rd party but SRT are waiting to get their hands on the loot/RNS the contract. Presumably they are then looking to book a decent lump of the contract straight away, perhaps under 'set up costs' or 'software' or whatever.
A couple of years ago SRT did the same with the Indonesian order and managed to make the figures by booking a lump of the Indonesian order straight away.
I'm sure this is all well and good and complies with every accounting rule, but the thought crosses my mind it would be better to spread out the revenue recognition over a longer period of time, even if it meant taking a short term or f/y hit, which would only affect the profit/loss, not the all important cash flow aspect.

[lavalmy] 21/3/2018 10:11

astral

The difference is that in 2014 they had guided down to that range of £6-13 mn in January, and only just got to the £6 mn by including some revenue on a contract signed after the y/e. This time they haven't changed the guidance at all.

I agree the last minute stuff is exasperating, it seems to happen every year.

[astralvision] 21/3/2018 09:52

A decent update from Countryman5, presumably with help from ST.

Re warning, the profit warning 4 years ago came a couple of days after close, 2nd April 2014 to be precise, after previous guidance of £6m-£13m and it came in right at the bottom of that range



If they do make forecasts this year, that's good but irrespective of that I do feel investors (or some investors) have had enough of all this last minute will they won't they stuff and despite all the years, that is still the position SRT find themsleves in, and probably for a few more years yet.

[lavalmy] 21/3/2018 09:36

For Indonesia, the picture is more murky. I am inclined to believe that they are waiting for the corruption investigation regarding the German satellite company and Bakamla to blow over before recommencing the project. SRT and Qnective certainly did a lot of the detailed planning work despite the investigation having started in December 2016. The current head of Bakamla was indeed appointed in March 2016 which is exactly when the project stalled, although, as I said, the detailed planning did start.

As for Qnective, it is not a mega private company at all, but has exemplary connections in Indonesia which are essential to doing business there. I note that the general who signed their original contract for secure military communications in 2013 was appointed in January to the Cabinet. They probably still have his phone number.

[techno20] 21/3/2018 09:36

Been invested here for years. My first purchase was at 21p, sold big chunks at higher levels, so having re-watched the webcast from just a few weeks back, I’ve topped up again this morning. Happy to hold LT. Only time will tell! GLA.

[yump] 21/3/2018 09:27

Is it just the same group of posters that go around from share to share, where there are disappointments and a dropped share price and just churn out the same largely irrelevant rubbish on every share ? Even on the same share they do it over and over again.

I think I know the answer to that.

I know its as unlikely to get an answer that's any better than those on the Sunday morning 'Big Question', but how exactly would being part of a larger business help ?
There's an assumption there, that the issue is to do with the size of SRT.

So how would 'more resources' help and what are they that SRT is missing ?

Not enough brown envelopes given to high-ranking officials to get the contracts signed ?

[lavalmy] 21/3/2018 09:14

Homeboy

You seem to have mixed up Indonesia and Philippines. The Philo contract is the Philippines and the funding was agreed by the French government in 2015. The project has been increased in scope and cost since then and this increase is waiting for final approval from the Philippines.

[homeboy] 21/3/2018 08:30

"I can only assume from the lack of an announcement that SRT still believe that they can meet the forecast (+-10%) and are able to persuade the Nomad that this belief is reasonably based."

This is a false hope, SRT are unable to predict contract timing, therefore they wont be informing the market of anything until the financial deadline has occurred. Then they will say they believed a contract would happen but sadly did not. Technically they wont have broken any rules, morally though, I suspect they knew.

[fft] 21/3/2018 08:27

A number of years ago SRT issued the profit warning after year end because expected/hoped for contracts did not happen before year end. They were then supposed to happen in the following year, but I don't think that happened either.Best bet for SRT is to be part of a larger group with more resources. Shame really, but hard to see how it can do all it wants standalone.

[lavalmy] 21/3/2018 07:44

I can only assume from the lack of an announcement that SRT still believe that they can meet the forecast (+-10%) and are able to persuade the Nomad that this belief is reasonably based.

[homeboy] 21/3/2018 07:36

"There appears to be a lot of fear and ignorance surrounding this company."

There certainly is....from the stock holders, a persistent and deluded belief that next year will be the year, however the facts speak a different reality.
A form of madness is to keep doing the same thing and expecting the result to be different.
Meanwhile, the shareprice is the only reality.

"I predict T/o for the financial year end March 2019 between £30 and £50 million."

That is just a hope and a belief, there is an established track record here of investors predicting the same thing year after year,, SRT has an established track record too. ;-)

[countryman5] 21/3/2018 07:25

There appears to be a lot of fear and ignorance surrounding this company. There are seven trading days until the financial year end for SRT. It has placed a forecast in the market for T/0 of £15 million and a profit of £1.3 million, I believe. These figures must have the support of the Nomad, the BOD and probably the Company solicitor. It is understandable that some people are worried that the forecast will undershoot especially since the first half was light. So what are the facts?
Under AIM rules, the above mentioned people must issue a RNS if the company believes that it is going to overshoot /undershoot the forecast by a margin of 10% or more. So seven trading days from the year end, those people with the knowledge of the finances and deliveries of materials believe that the forecast (plus or minus 10%) will be met.
These are the facts, now for the speculation:-
I am assuming that a substantial project is relevant to ensuring that the forecast is met. Those who have followed this one will know that Philo 2 is imminent with the award by the Philippines government due earlier this year. This is a fisheries contract for about 28 million euros financed by the French government. This contract has SRT's name on it because that is the only company that could meet the 3D specification. Obviously the french would like one of their companies to receive the contract (CLS has been speculated here). There is a requirement that a french company receives the contract and this is part of the ODA loan agreement. I am sure that SRT would have found a french company to front their bid.
If SRT has won this contract, why has there not been an RNS? Whilst the NOMAD would have seen evidence of the signed contract I suspect that SRT would be wanting to see the colour of the french euros before making the RNS. I suspect that the french are seriously p....d off that SRT won the contract and may be dragging their feet on releasing the money. Their commercial attache probably reads this blog!!!!
There is still time for a profit upgrade or downgrade but the decision, based on best evidence, will be taken by the NOMAd, whose head is on the block with the regulator. If there is a downgrade within the next seven days it will mean that some of the 15 million will drop into next year by a few days.
There is a lot of negativity on this site. Now for a little of the other. My research is based, in part, on information gleaned at the AGM. I believe that the VSOP is more than £200 million by a considerable margin. I also believe that the delayed Indonesia Qnective contract is on course for £100 million, having been delayed to the next financial year. Qnective is a mega Swiss private company that has invested a vast amount of money upfront in this contract. It is THE major player in indonesia's communications network.
The major drivers for SRT's VSOP are fishing and security.
Many of the counties, such as the Philippines, Vietnam and Thailand, export vast amounts of fish to the EU. The EU issues yellow and red cards. Red means no exports. It is these colour cards that are driving some of these contracts. Illegal unregulated and unreported fishing is another problem with many countries in SE Asia trying to stop especially the chinese. In the Middle East it is about security. We have Bahrain leading and inspiring her neighbours. These are very wealthy countries, they want the technology but they are careful with their vast wealth.
I predict T/o for the financial year end March 2019 between £30 and £50 million.

[homeboy] 21/3/2018 07:25

From post 6564 -

"From 17th June 2014 for example
Currently we are working with our customers on active and validated AIS project and mandate market opportunities with a potential future value to SRT of approximately GBP200 million."

Exactly the point, another 4 years on and the total project sales over that period are where?? Time to wake up.
SRT is the kind of company that would probably have been best to leave in private hands and not float it, it's not investable.
Might be helpful to have a CEO that doesn't give unrealistic expectations as to expected returns here.
Meanwhile, this is looking like a 10p or less stock. 'Imminent'. lol

[kendonagasaki] 21/3/2018 07:00

Lost the American contract too I'll bet?All these new tariffs with no subsidisation and preference for American firms........they have no future in the American markets.China already have a similar system I'm told and a hell of a lot cheaper to boot!

[amt] 21/3/2018 06:39

The problem is they have had a huge pipeline for years but actual sales have shown only very slow growth in the last couple of years at around 11m. Once they show me they can grow sales at a significant rate then I might be interested in investing otherwise the share price needs to come down to a reasonable value for me to take the risk. If sales come in at say 14m plus this year I would take a different view.

From 17th June 2014 for example
Currently we are working with our customers on active and validated AIS project and mandate market opportunities with a potential future value to SRT of approximately GBP200 million.