Srt Marine Systems Share Discussion Threads

[yumyum] 30/5/2018 14:11

Very very positive indeed.

Well done SRT.

[effortless cool] 30/5/2018 13:54

£3m raised at 25p per share, £1.15m of loan notes refinanced, and lots of information on project opportunities.

I have added a long s/b to my core holding.

[countryman5] 29/5/2018 08:32

LAV.
Very detailed research, Thank you

[lavalmy] 29/5/2018 08:11

A bit of news from the Far East. Bakamla, the Indonesian Coast Guard, has caught 14 Vietmanese fishing boats in the Natuna sea. Bully for them.

The relevance runs deeper. As some will know, Vietnam was the project of the four on the front burner that was moved to the back burner. This in turn was because SRT was trying to get UK financing from a government space programme fund and presumably the space link was a bit too tangential. At around the same time as the project being put on the back burner, the EU issued Vietnam with a yellow card for its IUU fishing. This was because Vietnam had not put into action various recommendations from the EU about the issue. Remember too that this project was all and only about fishing boats and their catches, practically identical to the PHILO 2 project. Whether the timing of the yellow card had anything to do with the project going ahead, I don't know.

This month the EU sent a delegation to review the steps taken by Vietnam. The Vietnamese have been making a lot of noise about compliance, but most of this seems to be self-certification, i.e. a fisherman swearing blind that he would never, ever go fishing where he wasn't supposed to, and other fool-proof steps like that. This latest seizure by the Indonesians will not go unnoticed by the EU, but I doubt that they would be lifting the yellow card anyway.

The fish export sector is important to Vietnam. However they lack anyone of the clout of Thai Union (John West etc) to force a move by the authorites. The real impetus for reform is that the EU cannot sign the EU Vietnam free trade agreement with yellow card in place on the fisheries sector. So, if the EU does not lift the yellow card, then I would expect the Vietnamese to move ahead with the project even if they have to pay for it themselves.

[countryman5] 27/5/2018 11:22

Thoroughly recommend that investors read detailed email from Mr Tucker of August 31st, last year. LAV has put up a link above in his post 6878

[glavey] 27/5/2018 03:56

Why didn't they raise when the share price was circa 50p? Why raise shortly after the share price was at 20p? Looks like it was lifted out of the doldrums just to try to get a raise away. Then there's a leak. Someone felt it right for this to be out in the open. Clearly not the company. And otherwise too obvious to achieve anything in size. 25-30p? Not much of a discount compared to the vwap over the last month. Wishful thinking? A while to wait for published accounts.

[countryman5] 26/5/2018 19:52

I recognise the size and possible arrogance of CLS and they will be more than disappointed if the tortoise wins the race.(French pride is at stake here together with many other MDM contracts in SE Asia). If team SRT wins the race they should be declared Victor Ludorum and the leader should get a medal for winning against such biased odds. CLS like to announce their contracts just as SRT does. The fact that a result was due several months ago indicates that things have not been straight forward.
CLS could not sub contract the 3D part unless SRT was willing, whereas SRT could quite easily have a silent french partner in order to overcome the french bit. If the French renegue on an ODA funding agreement they will be laughed at within the international community.
You have identified that CLS could eat SRT for breakfast (If SRT shareholders want to be eaten). If CLS are beaten by the tortoise, how will they react? I would not agree to a CLS sale but other SRT shareholders might.

[lavalmy] 26/5/2018 18:46

Why have SRT not announced their victory?

CLS are a private company with no broker's targets to meet, so no need to impress or
pre-empt contract news. SRT on the other hand .....

What do you not understand about subcontracting - i.e. that a company can subcontract bits of a contract that it is unable or unwilling to do itself to another company.

CLS was founded in 1986. SRT in 1987. CLS has a turnover of more than €100,000,000. SRT doesn't. Which is the more successful start-up so far?

[countryman5] 26/5/2018 18:17

LAV,

Why do you think CLS have not announced their victory? How are they going to overcome the need for 3D? I don't buy it that they are the winners.

Just imagine that the company in which you are invested is the victor for this contract and therefore probably for all of the other forthcoming Philippines contracts, will CLS take it lying down or will they become upset?

[lavalmy] 26/5/2018 17:25

C5

Absolutely. CLS will have won the contract, with SRT as subcontractor. The financing for Phase 2 was agreed by the French government in 2015, as Phase 1 was being implemented. They are the majority shareholders in CLS. There is no competition in the bidding. One bidder, one winner. The only reason bidding is done is to comply with both Philippine and French regulations. There are no other French companies operating in this segment. The bidding documents are very specific that the bidder has to be French and has to have existing fishing boat tracking operations in place of a certain size. There is no other possible eligible bidder. SRT are not French and have no fishing boat tracking projects operational, as in none. And not a bit French.

[countryman5] 26/5/2018 17:12

LAV.

I recognise the size of CLS and possibly their arrogance towards the Philippines to the extent that they presumed that Philo 2 would go their way. How will they react, or are they reacting if that upstart from MSN beat them to win Philo 2?
My money is on SRT to win Philo 2.
LAV do you have thoughts on the winner of Philo 2?

[lavalmy] 26/5/2018 16:18

C5

CLS is by far the market leader in long range tracking of fishing boats (and other things such as fish). Nothing has prevented CLS from winning the contract as they are subcontracting to SRT the infrastructure and transponder side of the contract - they used SRT for the transponders in Phase 1 and are obviously pleased with the way it works (now much improved). The bidding document is rather specific about having several large fishing boat tracking systems already operational and no-one else does to the best of my knowledge, at least not French. CLS runs the Indonesian system and the Vietnamese system as well - these are for the biggest fishing boats. I think that bodes very well for SRT as these countries aim to expand coverage. You should read Tuckers reply linked below which explains the difference between legacy systems and what SRT can now do. It ties in quite well with HJB's recent quote of SRT's marketing blurb - 40% cheaper etc



I think it is rather helpful for governments to assist their companies to develop their overseas business, particularly in areas where the developing countries may not see the immediate benefits of this sort of investment or have more pressing needs. CLS had government backing in Vietnam and Indonesia. I am also reasonably sure that CLS suggested to SRT that they too try and get UK space programme support for SRT's Vietnam project - unfortunately that attempt failed. I understand that the UK did pay some £20 million as a grant to Airbus for them to develop a cheesegrater type of RADAR satellite. Possibly instead of bemoaning French support for their businesses, you might find another target closer to home?

CLS is reasonably acquisitive but in very specific segments. I doubt that they have any interest in SRT. Maybe Airbus, Thales etc might in the future.

Expletive

I am not talking about the leak. I am talking about short selling by an insider of some 300-400k shares twice. After the extreme share price drop the second time, then the Standard printed its story which included clear reference to the drop. As I say, this happened twice in three months, at a small scale for small profits by someone who doesn't seem to be very good at it.

[hjb1] 26/5/2018 16:06

so if it was someone who was 'brought inside' then they deserve an even bigger slap then!!

[expletive deleted] 26/5/2018 15:31

LaV,Any leak is not necessarily coming from LBG or FinnCap. It is much more likely that one or more if the institutions they have marketed to, who will all have been brought inside, is the source of the leak.

[countryman5] 26/5/2018 15:16

Lav,

I believe you are right to focus on CLS with regard to the Philo phase 2. I believe that they were awarded Philo Phase 1. I am not sure 'that the entire bidding document was prepared with CLS as the only potential winner'. The inclusion of a 3D requirement prevented CLS from winning the contract, whereas SRT might have found a notional french partner to circumvent the terms of the French loan agreement. I believe that we shall soon hear the outcome of the 28 million Euro Philo phase 2. If it belongs to SRT ,will this have an impact on the market's perception of SRT's potential?,
If CLS has not won the contract, CLS will be spitting 'fromage' at the 'Roast Beef' and will seek to take SRT out. If CLS can not win in the Philippines it knows that its business model won't work for all the other countries that it is bidding for against SRT. If it can't win with the help of a French loan, it is truly stuffed.I for one will never agree to sell out to CLS even at £2 per share.

[lavalmy] 25/5/2018 19:01

boadicea

There was a leak in March when they issued the second tranche of loan notes, which had a similar effect on the share price. They might also have been planning to raise equity at the same time and ditched that idea when the price dropped below 20p. So either LGB or finncap have an inside trader. That is not to impugn them, rather the individual who did it.

The other point about financial muscle has many merits, particularly if you look at the terms of the Philo 2 bidding documents. These state that the bidder should have certain financial ratios, must disclose the amounts of contracts commenced but as yet unfinished and other contingent items that may preclude them from being considered safe and eligible contractors. It has to be borne in mind, however, that the entire bidding document was prepared with CLS as the only potential winner, so these caveats could more reasonably be viewed as window dressing. Many donor countries insist on open tenders for their aid assisted projects despite the fact that e.g. the contract can only be awarded to a French company.

[hjb1] 25/5/2018 18:32

it could simply be that they need it to fund the big upcoming contracts, of course it would boost the balance sheet too.

[boadicea] 25/5/2018 18:07

Could we have a chicken and egg problem here?
This is purely my thinking aloud but I put it forward for comment.
If SRT may be in line for a major contract (as ST would have us believe, no doubt) but the party awarding the contract (either directly or indirectly) is unwilling to become dependent on a supplier without substantial financial muscle then it could be necessary to beef up the balance sheet with equity rather than debt.
This is the most optimistic scenario I can postulate to explain the present situation.
It results in some dilution of course, but the egg has to break for the chicken to hatch!

Incidentally, it opens up a possible alternative source for the leak without impugning the financial institutions involved in what, I asume, will probably be a placing.

[kimboy2] 25/5/2018 09:27

If I were to guess it will probably fall below the strike price for a while before it makes headway above it.

It will depend what information is given with the placing and why they need the money and what it is to be used for.

[countryman5] 25/5/2018 09:13

I imagine that there are several PI's, myself included who are waiting for the strike price to be revealed via a RNS. Those of us who are quick off the mark might be able to buy shares in the market place.

[davemac3] 25/5/2018 09:01

looks like it will be around this price

[kimboy2] 25/5/2018 08:46

You can probably buy at the placing price at the moment, if you are so inclined.

[fredfishcake] 25/5/2018 08:22

Possibly naive of me, but wouldn't it be nice to give us, the long-suffering share holders a chance to avoid dilution by being part of the fundraising? What about an open offer or rights issue?

[lavalmy] 25/5/2018 08:21

The newspaper has done nothing wrong - the culprit here is the short-seller and it would be reasonably easy to identify his/her accounts, if people could be bothered. I would guess somewhere in the 300,000 to 400,000 shares are involved. They might make £25-35k, but have brought down the market cap by £10 million or so.

Anyway, it's done now. The amount of the financing suggests they are pulling the trigger on the satellite programme. I am still baffled about what the actual advantage is of having the infrared and the AIS receivers on the same satellite. The infrared is a camera, so is actually looking at a physical trace in the water. The AIS signals are not identifiable by location, as in say a direction finder, only after processing the signal can the GPS co-ordinates be known, which then have to be matched with the infrared images - and that could equally well be done with AIS signals from any source, whether terrestrial or another satellite.

[fft] 25/5/2018 02:58

C5,. The claim, if any, would be against whoever breached the nda by passing info on. No chance against the paper as they could claim public interest etc etc.I don't think I have ever seen anyone prosecuted for breaching an NDA. Anyone else ?More to the point, why have the fundraising if most of the 10m facility from last year is still available. Or is it planned to use that as well some time later....