Srt Marine Systems Share Discussion Threads

[countryman5] 05/9/2018 20:45

PS. How were the cakes? How often does one go to an AGM and find cakes baked by the staff? I bet SRT is unique in the Country. That in itself tells you a great deal about a team who are dedicated to the company AND its shareholders. How fortunate are we?

[crystball] 05/9/2018 20:25

Just got back home after another interesting AGM. It was good to meet the staff, have another tour and meet some familiar shareholders again and also some new ones. I will add more in a few days time when I have time.

[countryman5] 05/9/2018 19:35

All feedback gratefully received by those unable to attend AGM. Thank you.

[fredfishcake] 05/9/2018 18:50

Good summary by alter ego. Simon even more bullish and enthusiastic than last year and seems very confident not only that they’ll be re-awarded the contract stuffed by the French shenanigans (worth over 30m Euros) but that a decent chunk (more than 15%) will be front-loaded and delivered and paid for by Xmas…..as some of the kit is still in country. This is likely to be the world’s largest fishery MDA and is likely to lead to other projects in the same country – so fingers crossed we do indeed get it.

For newbies, there are two strings to SRT. The first is hardware, and this seems to be doing well, kicking off £5m this year and aiming for 15-20% increase per year. I got the impression that Emtrak was being pushed by SRT more this year than last, and several people mentioned that SRT kit had a good rep for reliability and durability. Certainly the hoops they have to jump through to get any kit certified by multiple authorities mean that there is a non-trivial moat here for kit that can be sold worldwide. Production is still done by Flextronics, but they’ve moved from FT in Hungary to FT in Ireland for logistical reasons. This had teething problems which probably cost £1m in lost sales this year, but has now bedded in. Competition is Alltek/Weatherdock, and they are getting 40% margin on these sales.

The second string is the systems, where GeoVS gives a pretty display, and more importantly analytics based on AIS and any other data to hand (radar, CCTV etc). This is where the excitement lies, though any revenue is likely to be lumpy and unpredictable. Here, Simon claims that SRT are the gorilla in the market, with a proven system in Bahrain that is likely to be seriously expanded in a second phase soon. It sounds like the old ‘no one ever got fired for buying IBM kit’ situation, with SRT kit having a reputation for just working reliably and cost-effectively. Half of SRT’s R&D is spent on updating GeoVS, with a new release aimed for around every six months; each providing better analytics. Profit margin on systems is targeted at 50% and the numbers here are large - £144m in procurement stage, which is apparently business that’s very probable that SRT will get. Simon was of the opinion that they had sufficient staff to handle up to five projects simultaneously, though I suspect this would be a major stretch, but it would be a nice problem to have!

The mood of everyone working at SRT was positive, with low staff turnover and banter suggesting that most people were happy with their lot.

In terms of investment, it depends on how much you believe Simon’s ongoing enthusiasm. The potential for this company is huge…..last year they had revenue of £5 million, so imagine what a few contracts in the tens of millions would do to the share price. However, they do have a history of disappointing the market….it occurs to me that the first contract awarded (Simon’s best guess is that two will drop before Xmas – I assume this year!) may well lead to minimal share price movement due to general mistrust. However, this might prove to be an excellent entry point for any doubters.

Personally I continue to hold and may add on any contract news – but no one should think this is one for widows and orphans.

[lavalmy] 05/9/2018 18:44

hjb1

You should pay attention. Most Class A signals are missed as well, for those a figure of 1.5% sucessfully received was mentioned. SRT have developed various mechanisms to enable their Class B to be detected, including boosting the wattage and organising the fleet's transponders to use different slots/frequencies. If I say anything else, I will have to shoot you. I will check the 'recommend' statistics for this post later!

Two more important points. SRT effectively owns the encryption, so no-one else can receive their transponders messages if encrypted. Secondly, with a civilian system, they are not trying to track a boat in the sense where is that boat right now because I want to blow it up. It is more where has it been, where is it heading etc, until it can be picked up by terrestrial AIS. And for that once an hour is fine. Which is what the EU, bless their souls, demand.

[lavalmy] 05/9/2018 18:25

Imminent, all too imminent, to paraphrase Nietzche.

Seriously, this time. The Philippines is due, as AE said, to issue a new tender very shortly with a closing date of five weeks thereafter. We should be able to see that when issued (very similar to the last one, of course) and with the payment schedule - the bulk of the payments will be due effectively in years one and two, i.e. in 12-14 months. In practice that means redelivering the control room/Geovs pretty much straight away and invoicing the £8 million odd which can be converted to cash via either an insured route (UK export finance) or from a regional bank with appetite for sovereign risk at a low cost. 6% is factored in for the finance cost and that has been added on to the project's overall price (if you remember there was an increase in the project cost). A former director I met reckoned that the bulk of it could be booked within six months. Incidentally he is more optimistic than ever and was one of the original backers of the buy-out. BTW, the Philippines is also under card pressure from the EU, October being a date that they have to show progress.

Now much of the bear case for SRT could be made along the lines of Indonesia - announced 2 1/2 years ago, silence, then delayed in perpetuity with write off of outstanding balance; next cab, Kuwait, silence, not progressing, unpaid, auditor deeply unhappy; third cab, Philippines, contract cancelled etc. Core business in regress. Ran out of money three times, September, March and May.

Kuwait is due to restart imminently at a much larger scale - $20 million or so - including some very positive cashflow. That I got from more than one source. Bahrain will be going ahead with their enhanced project, paid for by themselves, and with 10 of these Terma RADARs not the three that I mentioned some time ago, $28 million. Brigadier Siyadi seems to be worth his weight in gold, as he got a couple of name checks as the man from Del Monte with regard to MDA regionally and even more widely.

As for the rest, who knows? Thailand is at risk of a red card. The Philippines is very much planning the next phase of their much larger programme. I would think that H1 this year will be zilch on project revenue, H2 very sizeable. SRT might have reached a point where mere annoucements of contracts will not suffice to encourage investors and fair enough. I suspect that by this financial year end, the cash will be in the bank to prove the point. Long suffering shareholders, and it takes all sorts as those who attended the AGM will appreciate, will suffer no longer. Sunlit uplands beckon.

Great to meet with other long sufferers.

[zingaro] 05/9/2018 18:14

hjb1: perhaps our own sats in a different orbit could do better, but why own it, let others get the data and sell it on.

[boadicea] 05/9/2018 18:00

Thanks a-e, brilliant summary. Sorry to have missed it myself due to prority family duties.

[hjb1] 05/9/2018 17:34

'Class B currently is barely detectable by satellite'.At the time Tucker told us that SRT was the only class B that could be detected successfully, so what happened?

[alter ego] 05/9/2018 16:55

Forgot to say sorry you couldnt make it TP. Hope we’ll see you next year.

[alter ego] 05/9/2018 16:43

sorry to keep you waiting boadicea :) Just arrived home.

Not much time to finesse this post so here's what I learned. Several other ADVFN'ers present who may want to add.

In conversation before ST's presentation, spoke to Louise Coates. Number of dealers now about 570. She runs the EmTrak side of the business largely on her own with customer support from another. Sales up this year by 7% I think. Getting plenty of interest in buoy trackers from Canada fishermen. Currently they use a Chinese product which identifies buoys as Vessels (which is illegal) but it's very cheap. Think she said about 20% of EmTrak price. Only last for 6 or so "throw outs" where it's chucked into the sea and later hauled out so they keep buying replacements. She reckons break even for spending more on the EmTrak product would be about 2 months. Fishermen using duct tape to make Chinese product waterproof.
Similar interest from Scottish fisheries for net/pot trackers so an opportunity here.

EmTrak web site redesigned to make it easier to purchase directly rather than via a dealer. Pricing doesn't undercut dealer.

Reckons a large chunk of the old Poseidon stock has been sold (50% ?)

Vesper Marine products and marketing very good and easy to sell in NZ and Australia where well established. Tiny company.

Simon's presentation:

Not much detail on major projects except unnamed Far East country (Philippines 300k boats!) where European Government (France) offered a loan to purchase a system from a French company. Despite SRT setting up a French subsidiary and being awarded the contract, the loan was withdrawn. Latest news is that the budget for this has been establish from Philippines own funds, a new tender is expected to be issued soon (weeks?) and then after 5 weeks a contract will be awarded. It's clear SRT are as confident as is possible that they will win the tender.
Minimum of 14 months to install all the equipment with priority given to the control centre as this is what the customer wants to see. Most of the price for the 4 year project is payable early on with another 20% or so being for provision of data. At the end of 4 years, it would be expected that the contract for data supply would be renewed.
Aiming at overall 50% margin on projects.

South America, no detail but SRT involved in Ecuador, Chile, Nicaragua and Mexico. Sense that Ecuador not going particularly well due to customer idiosyncrasies. ST's words not for wider publication.

Export credit finance is available and on completion of a project deliverable the government will issue a promissory note which SRT can sell to a bank at a slightly discounted price (say 6-7%) One bank (not any of the high st boys) is willing to buy without having Export Credit guarantee which could be cheaper for SRT. Importantly, this would give SRT access to cash earlier than would usually happen.

Snippets:
Middle East where security is driving need for better monitoring of vessels:
Bahrain used SRT system to identify boat smuggling weapons intended for the Four Seasons Hotel.
Bahrain have an old legacy system (Saab?) alongside the later SRT one and SRT are specifying a major upgrade (£28m I believe)
Kuwait are seeing 100 drones a day carrying weapons and drugs - source possibly Iran
A new customer in the region last week wanted some products immediately - no more details
It looks like the products initially shipped to Indonesia were redeployed in the ME

Vietnam seeing Chinese fishing competing with its 70k boats - need to build a case for international action rather than attempt military intervention.

"Social boating" on leisure craft gaining in popularity. AIS enables boats to meet up.

Sealight (Australian large manufacturer of aids to navigation)are buying SRT Atons to mount on marker buoys.

Finances: £3.15m drawn from £10m loan facility so far. Although expensive source of funds, can be repaid as required. Cash flow expected to benefit from Export Credit scheme (UKEF)

50% of R&D now on GeoVis development. New lease every 4-5 months adding functionality. Now at release 7. 24 ? staff in Cardiff. Looking for a skilled person to oversee whole development process which increasingly involves the software on the transceivers which is done in MSN.

Lengthy section on Satellite data. General impression that SRT are moving away from owning their own Sats. Expectation that in a couple of years there will be many more satellites and operators that SRT could buy data from and sell on to its customers.

Class B currently is barely detectable by satellite. Tested this in Arabia Gulf over one week and out of 12 million transmissions only 12 were detected. SRT can modify the way its Class B's transmit by timing changes and power increases to materially improve detection rate.

All SRT transmissions can be encrypted so data is meaningless unless seen by an SRT customer with appropriate data handling (GeoVis).

Apologies for any errors - hopefully someone will correct me.

Nice to meet some familiar faces (Eagle Eye, Owenski)and a couple of new ones (La V and Philjeans).

My overall impression is SRT are very well placed to finally see a significant inflow of revenue. Biggest risk is delays as we have all learned to our cost. No sign of any lack of optimism or effort from ST and the team.

[9degrees] 05/9/2018 16:00

jam jars ? or honey pots this year ?

[boadicea] 05/9/2018 14:42

I thought we might have had a comment on the canapes by now.

[goodapple] 04/9/2018 19:02

We are due a webcast this month anyway, though I wonder whether any update news made available at the AGM will be circulated and therefore suffice?
Often see "Chairman/CEO will make statement at AGM... etc", so maybe an RNS in the morning?
EDIT: ...and maybe not.

[alter ego] 04/9/2018 17:17

Am intending to be there. Will post if I have time but traveling on Thurs. Looking fwd to some familiar faces

[billbyrne] 04/9/2018 16:41

Unfortunately I won't be able to make it this year due to my wife's poor health.

I too would be grateful for feedback from those attending.

[goodapple] 03/9/2018 10:11

Sorry I can't make it this year, so would be very grateful for any hot news & gossip from those who can attend.

[crystball] 03/9/2018 09:52

Yes, looking forward to meeting everyone there!

[eagle eye] 03/9/2018 09:19

Just a reminder for this coming Wednesday (5th Sept).
Open Day at HQ from 9am and AGM commences at 11am.
See you there.
Cheers
Eagle Eye



Directions to SRT:

Wireless House,
First Avenue,
Westfield Industrial Estate,
Midsomer Norton,
Bath BA3 4BS
Telephone: [phone]

Travelling by Road:
• From the centre of Radstock, take the A367 signposted to Wells & Shepton Mallet
• You will go past a Shell garage on your left hand side and after 1.4 miles from Radstock you will see a signpost to “Westfield Industrial Estate”
• Go left into “First Avenue” on the Industrial Estate and continue straight past Integrity Print and straight on as the road bends sharply around to the right
• SRT’s offices are located shortly after on the right hand side


The Centurion Hotel is located within a very short drive of SRT’s offices:

• Turn left out of SRT’s car park
• After approximately 100 yards you will reach a junction. Take the left into second avenue and follow the road for approximately 1/4 mile
• At the junction, turn right and the Centurion Hotel is on your left after approximately 1/4 mile

[lavalmy] 30/8/2018 07:48

This is what the Philippines has cobbled together with USAID to detect infringements of no fishing zones:



Presumably a system that works day and night and that allows them to track transgressors will supersede this.

EDIT: BTW my post has nothing to do with goodapple's, just a coincidence.

[goodapple] 30/8/2018 07:44

USAID Oceans leads roundtable discussing sustainability in Southeast Asia

"The United States Agency of International Development’s (USAID) Oceans and Fisheries Partnership led a business roundtable discussing sustainable and traceable fisheries in Southeast Asia, and how private sector commitments could benefit the region.
..............
USAID is partnering with the Southeast Asian Fisheries Development Center, focusing on developing financially sustainable electronic traceability systems, which are being piloted in Indonesia and the Philippines."

Hope SRT are on the flight deck.

[boadicea] 26/8/2018 21:31

Are we heading for more brinkmanship over the next two weeks?

[philburt] 23/8/2018 17:03

Philippines:

[yumyum] 22/8/2018 08:52

Thank you LaValmy. Progress of sorts.