Srt Marine Systems Share Discussion Threads

[lateralthinker] 22/11/2018 11:52

interesting comment DJT "I'm either out or long for a few weeks with SRT"

long for a few weeks seems to be a contradiction in terms......

[eagle eye] 21/11/2018 12:18

C5,
I would suggest this BB will have news of Philo2 before the following morning's RNS.
This is the place to hear something on the grapevine.
You're famous, so you should know LOL

[lavalmy] 21/11/2018 07:21

There is a court case going on in India about why the government hasn't fitted transponders on fishing boats in the area across from Sri Lanka. (google ISRO transponders for a range of articles). Interestingly, the judge asked for an expert from ISRO to explain how the system worked. Less interestingly, nobody has reported what the man said in detail and the judge asked for the whole thing to be sent to him in written form - it would be great to have a peek at that.

One article I have seen seems to conflate AIS with this project and I think we have to suspect that their transponders are based on AIS. It is all to be monitored via satellite and as we discussed previously they could end up with collision problems as the population grows from the 250 units they are trialling. There is mention too of Sri Lanka being on the same page - that I find interesting because last year when I met with Mr Tucker, Sri Lanka was very much a live proposition.

Anyway, time will tell if ISRO's system will actually work or whether they have to come crawling back to SRT and/or if Sri Lanka are going to do a project with SRT.

[alter ego] 20/11/2018 22:53

C5, surely any material news must be reported asap. I don’t believe companies are permitted to sit on news which is market sensitive. Too much risk of a false market if someone knows when others dont.

[countryman5] 20/11/2018 21:42

When will there be a RNS relating to Philo 2? Suspect that they will want to wait until cash is in the bank. However if it is mentioned in Philippines press an early announcement will be obligatory.

[extrader] 20/11/2018 17:11

Hi DJTrading,

If you're a shareholder, the simplest 'risk off ' strategy is to sell.

If you want to take a view but still keep your holding 'just in case' (cf hjb1), then maybe the thing to do is to go short.

The best of both worlds ? Perhaps.

DYOR, NAI etc etc

ATB

[lavalmy] 20/11/2018 16:19

I was thinking about the cash profile of various projects, reflecting on both the Philippines, where the initial installation is high value, high margin, and comments mid-year from Simon that with UK export products available only small, short-term amounts of working capital are needed for each project.

Well yes and no. In an ideal world, the first things to go out on a project would be the hub and software - prime example the Philippines, where they booked £5.6 million operating margin on only £8.2 million of revenue. The world is not ideal, of course. Of the projects we are waiting for, two stand out as different.

Firstly, Bahrain already has the hub. They are also wanting Terma RADARS, 10 I think up from 3, and I remember Simon saying at the AGM that RADARS would have a lowish margin. The Middle East being as it is that could mean carrying trade receivables for a low margin product for quite a while, although Terma might have to agree to be paid at the same rhythm as SRT.

Kuwait has the hub in abeyance, as it were. SRT has recognised the revenues at the high margin. I think the deal is that once they confirm what transponders they want, they will pay up for some of the outstanding (some is invoiced by SRT, the larger part is accrued). So what they pay (from memory a couple of million) is pure cash inflow. The new kit they want will be lower margin transponders, albeit not as low margin as RADARs. And it will be a while before they pay for that little lot.

Both Bahrain and Kuwait can be financed via UK export finance products, though I don't think they will be able to sell on the debt on a non-recourse basis as with the Philippines. As a result, the new outstandings on these are likely to stay on the balance sheet for quite a while, allowing those that way inclined to comment negatively. In terms of actual cash, it is rather academic as it can all be financed as and when necessary.

Vietnam, Ecuador would be the ideal sort of project. High margin, low cash outflow intial phase. Doesn't really matter if it takes them a while to pay up, as the net cash inflow from the initial phase covers the carrying cost of the later ones.

[yump] 20/11/2018 15:36

Unsound investment strategies No.1:

If you're looking for growth stocks that might deliver significant long term growth, concentrate on cash.

Yes, that's always been very rewarding for me. As if.

[lavalmy] 20/11/2018 13:59

finnCap haven't updated yet. Maybe they are waiting for something?

They did say this when the Philippines was cancelled:

'The VMS is still urgently required: The SRT VMS is for a critical fisheries monitoring and protection project (the EU fish catch certification program can prevent countries from exporting fish unless they have VMS). Given the drivers, we feel this is a timing issue. It faces a time constraint in which to deliver the system and that will not be extended on this cancellation. The urgency and the fact that SRT has already commenced deliveries which will sit with its in-country partner, suggest that SRT will again be selected and that the deployment program will be speeded to compensate.'

I knew I had seen something about the EU and the Philippines somewhere, possibly this is it.

[pinkfoot2] 20/11/2018 10:46

Another thumping loss and cash burn in the period.Im with you DJ-they will need another raise unless the jam pot is opened soon.Hope you are right Lav/Countryman as you both remain very positive

[dj trading] 20/11/2018 10:43

Still not one trade and price unchanged at 27/28.5
I can see why shareholders are caught in the headlights
Cash vs jam again
Where's Yump - he's usually got something to say when I post!

[goodapple] 20/11/2018 09:12

I'm keeping that Jar of Jam where I can reach it. Confident of tasting it before H2 is up. When the boat comes in, avoiding collision and monitored by GeoVs.

[lavalmy] 20/11/2018 09:12

Indeed Owenski

It looks like oem/emtrak continue with their progress. I had feared that some of the uplift had been due to catching up with orders after the production glitches. The Raymarine/USCG and JRC deals should help boost the underlying non-project sales as well, reducing the regular burn rate. I put it at £3.5 million or so p.a. But dwarfed by the projects business, which can be lumpy each way. Thankfully, the proximate lump expected has been paid for, so the cash inflow will have no corresponding outflows.

[owenski] 20/11/2018 08:51

Lav. Indeed, point taken on Exes. Bit of a double edged sword, need the warm bodies to manage expected projects ahead of the game. Kicks the sales required up a notch to cover costs but not a problem with the kind of income expected. Confidence does seem to be here now for execution at last.

[dj trading] 20/11/2018 08:36

Not even one trade showing on my screen

[dj trading] 20/11/2018 08:03

Yes spotted Creditors LaVal and commented above whilst you were posting - normalised burn at £250k/month gives them another couple of months perhaps Jan-Feb? before critical (depending on final bank loan repayment date Feb?)

Given past history of delays for various reasons I would err on the side of caution with respect to a contract start date
I have no knowledge on how quickly financing will be forthcoming but these things always take longer than expected in my experience

Cash shouldn't be a "Yawn" it should be the most important issue

[lavalmy] 20/11/2018 07:52

Yawn.

You will see that trade creditors have been paid off to the tune of £1.1 million accounting for the majority of cash used in operations. This is for the Philippines contract, so that is bought and paid for.

You don't seem to understand or choose to ignore that they have already arranged finance from the Philippines contract which will be available as soon as the contract restarts.

[dj trading] 20/11/2018 07:43

1H results
No mention of cash!
No mention of overdue contract payments or progress! Doesn't sound like all is well with that contract to me!

Cash analysis is really simple
1H burn £2.4m or circa £0.4m/month
Balance at 30th Sept £1.4m (less bank loan repayable in 2H = £1.2m)
So 3 months cash left at current burn rate
No sign of any project cash

Sources of new financing - assuming overdue debt remains outstanding which given the lack of comment I view as likely
Banks don't appear interested anymore
Will anyone want to risk further cash input via loan notes - personally I doubt it
So it's back to shareholders and given the elevated market cap the best option imo
So I forecast a further fundraising in next 3 months

Why this issue isn't addressed in the Chairman's statement is beyond me!

All imo dyor
Edit 07.50 - Not quite as bad as I posted above as they appear to have reduced Creditors balance significantly in 1H so burn perhaps £250k/month giving an extra month or two

[eagle eye] 20/11/2018 07:42

Good news to see the satellite initiative shelved.
If multiple projects are to be delivered in the current financial year, then a lot needs to happen in the next 4 months.

[lavalmy] 20/11/2018 07:38

owenski

It is a one-off reduction. I would guess the run rate is over £6 million, closer to £7 million.

Sounds like at least three to me.

[owenski] 20/11/2018 07:23

Wise decision on the satellites. Let others shoulder that burden, as said, it's looking like a buyer's market in satellite data.

It does appear we're still on track for up to three projects delivering in second half.

Good to see Admin. exes. creeping below 5m.