Srt Marine Systems Share Discussion Threads

[lavalmy] 10/1/2019 11:45

I should add though that at the moment the lack of interest works against the share price or at least any meaningful, sustained rise. When that changes, with the contracts and much higher forecasts, that will play into our hands, as well as the relatively tightly held shares. So I imagine that SRT will undergo the sort of rapid rerating that is seen from time to time and stay there. February, as YumYum says, seems to be about the time.

[goodapple] 10/1/2019 11:37

La Valmy:Fair comment

[lavalmy] 10/1/2019 11:05

goodapple

I think that practically the only people who pay attention to SRT are here and few others will have watched the webcast. So, in that sense, there has been no news. Unless and until some contracts are announced and the broker's numbers for next year upgraded, the price is likely to stay around here. Almost three months til year-end.

[goodapple] 10/1/2019 11:00

I am surprised and not a little disappointed by the lukewarm market response to latest developments and news at SRT.I am sure LTHs are a lot more comfortable and confident with the prospects than a year ago, yet the share price languishes at 30-odd pence.Based on hope (and experience!) any guesses at the price at year end - a matter of weeks away?

[yumyum] 10/1/2019 10:18

Excellent webcast. I look forward to the next contract award/s confidently expected before the end of February (could still be in January). See webcast from 11.55 mins.
That looks to me like a very very clear signal that the share price will be MARKEDLY higher by the end of Feb, and probably much sooner than the very end of Feb.

[yump] 10/1/2019 10:15

Oh it does work now !
Here's the code to use:

img src="https://pbs.twimg.com/media/Dur0HT-W4AIxpM4.jpg" width="300px"

Stick the url inbetween the double quotes like this: "url here".
Add in a < before and a > after and it should work, unless the site that hosts the image is blocking linking and loads of sites do now. I can't get any link through to images shown on Google.

You can change the width: 300px is about right.

[countryman5] 10/1/2019 10:02

I suspect that the company has plenty on its plate for the time being. SRT would appear to be in pole position for all of the Philippines work. It would also appear to be in line for Kuwait, Saudi Arabia and Bahrain. A lot of plates to keep in the air. However, this is a small company learning about delivering mega global contracts. The business model that SRT has evolved is selecting a very reputable partner in each of these countries. These partners are responsible for making things happen on the ground in each of the countries. Effectively SRT is outsourcing all of the engineers / electricians etc to respected local players who have the resources to deliver. SRT has to engage the project delivery team back in the UK to manage the delivery of the physical resources and also monitor the work of the local partners. Quite a challenge. Indonesia, which has an enormous coastline, is currently on hold. They will be watching the Philippines. Hopefully Indonesia will follow in the footsteps of the Philippines but it would probably suit SRT if it waited a while. Indonesia, fishing and coastguard would be enormous. I suspect that Indonesia might be temporarily out of the VSOP.

[philburt] 10/1/2019 09:53

An MDM system from SRT wouldn't even make a dent in that 320M Euro budget for new patrol boats, and would maybe mean fewer boats were required if more efficiently tasked....

[lavalmy] 10/1/2019 09:21

I'm intrigued about the new sales guy in South America. Not there just for fun, but so far there is only the satellite contract in Ecuador. Peru got a mention a year or so ago (and CLS are the incumbent there) and I think a few years ago Argentina may have had a name check.

[piedro] 10/1/2019 09:05

Does Argentina needs help?

"Information suggests between 150 and 200 fishing boats of foreign origin are at the border of Argentina's Exclusive Economic Zone (EEZ). These vessels are particularly interested in exploiting the local squid-prone areas. In stark contrast, there are practically no Argentine fishing boats in the vicinity as it is holiday season in Argentina.

Vessels, with poor safety standards, bearing flags from China, Korea, Taiwan, and Spain are the most predominant in the area, mainly scouring for squid and sometimes, other species. Most of these vessels are using Montevideo port to replenish supplies.

Argentina's EEZ covers about 138,303 square nautical miles. Given the vastness of the area, the Argentine government is planning to invest €320m on new patrol boats. According to Inidep data, the area nearby EEZ produced 140,000 tons of squid in 2017, equivalent to US$366.6m in export revenue."

[owenski] 10/1/2019 08:41

Cant seem to do this myself

[piedro] 10/1/2019 08:09

To learn how ...

[lavalmy] 10/1/2019 06:04

Thanks Yump. I thought it was just me. It normally is.

[yump] 09/1/2019 18:27

Used to be able to 'hotlink' images into posts, but ADVFN stopped that a while ago.

ie. you used to be able to put the HTML code for pulling an image from somewhere else, into a post. Security issues with live linking like that which is why they probably pulled it.

[lavalmy] 09/1/2019 18:00

Here is an image that CLS posted on Twitter that was on a FAO video at the recent conference in Rome



I must learn how to post actual images like TP could.

Anyway, it demonstrates who is the gros fromage in this space.

[lavalmy] 09/1/2019 15:23

A point I have made before, but somehow it doesn't sink in to at least one person's consciousness, is that with the Philippines contract the costs associated with the first £8mn of revenue have already been paid. If SRT expect the bulk of the total contract to be delivered in twelve months, say another £12mn, at a lesser margin of 40% that would entail incurring costs of some £7.2mn. All the invoices can be sold. So that equates to a net cash inflow of some £12.8mn, excluding any retentions. Fundraising for anyone? So last year.

[lavalmy] 09/1/2019 14:23

Another thing that struck me as well different this time was how Simon was consistently talking about the expected implementation periods for the projects he mentioned. Six months for one in the Philippines, two years for another etc. He has never done that before and it suggests to me that they really are gearing up to do them rather than just talk about them. A throw-away comment re Bahrain about planning 'internally for them and for us' is apposite as well. He really does sound serious that this $300 million will be booked in the next three years (call it four) as opposed to the usual VSP figures being bandied about. And then there is all the rest, of course.

[alter ego] 09/1/2019 14:22

thanks LaV, yes that's probably most of the difference.

[lavalmy] 09/1/2019 12:46

ae

BTW the broker has £1.6 million of amortisation which accounts for most of your shortfall. In practical terms, much of the costs associated with both the systems development and all the sales/surveying etc are written off as incurred - which accounts for the greater share of the overheads. The transceivers business has probably been running at break-even or thereabouts.

[alter ego] 09/1/2019 12:26

Interesting that Simon mentioned that there had been "a very successful EU inspection" of the Philippines system in December and that "they were amazed by the system".

He also talks about the "ripple effect" being "quite dramatic, particularly in Asia" where the sales team are busy talking to various countries who have the same sort of problems to solve.

I guess it helps too if the EU inspectors are aware of the capabilities of SRT systems as this can reinforce the credibility of the sales people. In the same way that Bahrain has been a reference site in the ME, I can see the Philippines becoming the reference in Asia.

Having watched the web cast again, I see a relaxed ST talking about near term opportunities which he has deliberately narrowed down from the much larger list we have heard about in the recent past. Barring unexpected implementation issues, this looks more and more like the start of an exciting period for SRT and for us shareholders. No wonder the share price is looking perky.

[yump] 09/1/2019 11:53

Hopefully its possible to get them all up to speed quickly, as there's now a group of new people who haven't had the history of working for SRT for years.

Also hoping having taken x years to sign contracts, the governments don't want it all installed tomorrow morning as that would put pressure on the new guys.

Nice to be in a period where it looks like any risks are mainly with implementation, not orders !

[lavalmy] 09/1/2019 11:46

Playing a bit of catch-up here.

Firstly, it was great that he felt able to disclose much more than usual about specific projects. Secondly, I assume that the focus on the M/E and the Philippines means that Vietnam has been pushed out until Q2 or so, as the deputy PM said.

Back to the meat. A further $5, $45 and $100 million of business from the Philippines sounds great, as well as the vast majority of the current project being done in the next twelve months. That bodes very well both near-term and farther out, as well as the recurring element extending beyond the four years. All expected, I suppose, but still seeming much more advanced. Nice that the EU have been and seen what they are up to. It is bound to be the same team that go to Vietnam this month. And there was indeed a hint that success is breeding success.

Of the M/E, Kuwait seems the most imminent in terms of ordering ($10-15 million of transponders). Bahrain $25 million over 18 months. Saudi seems more advanced and a lot more concrete given the extent and detail of the surveying work done.

The staffing increases are very welcome, as others have noted. A sales person in South America? Technical, talented people recruited and all the rest. It can't be easy to get the right type of people. Given their reluctance to increase costs without good reason, it must be necessary and is very positive indeed.

It should be one hell of an upgrade when it comes.

[yump] 09/1/2019 11:43

Be interesting to know how long ago the systems side was being thought about and developed behind the scenes, because unless my memory is failing, SRT seemed to move quite quickly into systems, after it became apparent that simple product sales weren't going to rise rapidly. I seem to remember the lack of US orders was a big disappointment and shortly after that, systems seemed to appear in earnest, at which point I thought it might be another business that tried a new business model by default. Doesn't look that way now though.

Time flies as they say and I could be having false memory.

[eagle eye] 09/1/2019 11:01

FredFishcake,
I remember the days of £10m revenue to reach breakeven. If I recall, that was based on 50% margin and a cost base of £5m.
The cost base was £6.5m last year, so add £1.5m to that gives us £8m.
Quite a different picture now with £16m revenue required to wash it's face.
SRT has been good to run a keen, lean machine over the past few years, but now it's about fulfilling national projects and recruiting the skilled staff to do it.
Hopefully there will be no component shortages either.
With software sales being high margin, it's difficult to assess what the blended margin will be.
Thank you to everyone at SRT who keep all those plates spinning.

[countryman5] 09/1/2019 10:08

The market maker must have a supply of stock somewhere