Srt Marine Systems Share Discussion Threads

[amt] 29/1/2019 06:49

Piedro. What's that got to do with SRT

[piedro] 29/1/2019 06:42

VMS in Australia ...

Fired-up fishers demand answers over faulty tracking devices ahead of Gulf barramundi season

[boadicea] 28/1/2019 20:58

The recent case of Scisys (SSY) moving its registration to RoI might be of passing interest here. It's easy to follow in their RNS's issued over the past few months. Their operations remain entirely in UK and Germany (corporate HQ in Chippenham) and the Ireland presence may be no more than a Dublin listing (near equivalent to AIM), an Irish corporate broker and, for all I know, a telephone, letter box and brass plate on a broom cupboard!
However, it seems to work for them.

PS: (to Yump) - The frogs will have gobbled the worms.

[yump] 28/1/2019 12:08

Can of frogs surely ?

No, I haven't got anything better to do atm ;-)

[lavalmy] 28/1/2019 11:54

Cliffpeat

Using the French subsidiary would open up a different can of worms, to wit corporate tax. They would probably be better off doing something via Ireland or the Netherlands, but it gets frightfully complicated and expensive. Double tax treaties are completely separate from import duties. Probably best not to worry yet.

[cliffpeat] 28/1/2019 11:33

Thank you LaValmy for the timing clarification.

The current trade agreement EU/Phillipines is an interesting example in that it shows the complexity of the arrangements and the details such as "its obligation to the effective implementation of 27 core international conventions covered by the GSP+ regulation."



I guess that "carbon copying" and future alignment of changes may not be a simple and quick fix and that there are potential downsides for SRT (and UK exporters).

Also agree that ST may be (quite reasonably) dodging the Brexit issue until resolved - but perhaps the non-trading (as at Mar 18)SRT Marine Systems SAS in Paris may play a part in the future.

[lavalmy] 28/1/2019 10:29

Cliffpeat

It is very complicated, but when the contract is signed has nothing to do with it. When the goods and services are delivered is the important thing - the Philippines contract (which is fairly standard) specifies that the contractor is liable to pay any applicable import duties no matter what the rate (i.e. even if it changes).

Simon, in one webcast, claimed that Brexit would have no impact, believing that as the hardware is made in the EU, it would be business as usual. Much too simplistic, really. What about services?

The current position is that there is no EU Vietnam free trade deal in force yet. It should not be too difficult for the UK to agree with the Vietnamese, swiftly, a carbon copy of the EU Vietnam deal in the case of crashing out. But they will be far too busy dealing with the consequences of a no-deal that it would not be a priority. Maybe getting food and medicines in might.

[cliffpeat] 28/1/2019 09:23

Thanks CB for links.

Interesting quote in the announcement:
Edward Vaizey MP:
START
- The UK Government is committed to maintaining continuity in its existing trade and investment relations when we leave the EU, including continuity of existing EU FTAs such as the EVFTA.

- It is important that continuity is safeguarded so as not to leave British businesses at a disadvantage.

- The government supports swift progress towards implementation of the EVFTA to further this aim, to ensure that continuity of trade relations with Vietnam can be achieved.
END

Does this mean that after 29/03/2019 - IF - UK leaves EU without a deal would it mean that WTO rules apply to any SRT sales to Vietnam? And if so what would be the competitive impact compared with EU suppliers?

And despite Vaizey's "swift progress" support towards a UK/Vietnam FTA, the expert EU team has taken 12 years to get to where we are today on this.

Is anyone knowledgeable enough to assess/confirm or deny this contingency?

Might it mean that contracts will be signed before 29/03? And what impact on the sp?

(Off topic - Another reason to cancel Brexit?)

[crystball] 28/1/2019 08:51

An announcement this morning regarding The European Union - Vietnam Free Trade Agreement (EVFTA)



This link is to an article from last November which explains what it may mean for Vietnam's export of sea food.



The above articles are relevant because of SRT's possible upcoming projects for Vietnam.

[parsons4] 26/1/2019 07:22

At last we agree owenski. I think SRT are now approaching rapid growth in profits and are in fact a different company than when we met at an AGM probably 4 or 5 years ago.

[owenski] 25/1/2019 20:59

The staffing levels at SRT were probably correct for the mostly design function and sales required for the core business as it was.

The quantum and scale of these projects is a completely different ball game and the size of the company needs to expand considerably to meet that demand.

This is an entirely different business to the one of a couple of years ago.

It used to be a research, design, R&D and sales business, it now has a large scale project management business tacked on - quite an impressive jump really - and new skill sets are required.

Agree with your statement of 'pent up demand' LaV.

This simply cannot be run on a shoestring with a couple of bods touring the middle east or wherever. These are prestigious national projects and require adequate support structures from the company.

SRT's problem was that they saw this coming and have been involved in the long lead times to get these projects to signing stage, but do you hire staff ahead of time - bearing in mind that the timing has always been a predictive issue here - and have underemployed folks sitting on the payroll for a couple of years, especially when cash is tight, or wait till things are kicking off and react under a bit of pressure when things are confirmed with greater timing certainty and scout for personal at that point.

As said before, investors who have been watching this company for some time are witnessing the evidence of what's coming in the hiring structure underway in SRT. The market is not up to speed yet. A bit more news and some financials/cash being reported should see things wake up here possibly quite rapidly.

It's readable that things are moving at a faster pace.

IMO

[lavalmy] 25/1/2019 17:37

Who knows ee, it might just be a description Bristol/Bath area being MSN? And trying to attract Bristoleans?

I think the recent recruitment of sales people, one based in Asia, the other in the Americas, will reduce the strain on Tucker and the others. Not only exhausting all that travel, but means a lot of time wasted. It will be interesting to see how he copes with the transition to a bigger business.

[eagle eye] 25/1/2019 17:03

C5,
There certainly isn't much room at MSN.
Since the finance office gave way to the GeoVS showroom (how about that for getting priorities right) there is even less room now.
As the roof is high, maybe a mezzanine floor could be built in the warehouse.
GeoVS developers are based in Cardiff, and I believe there is room for expansion there. At the AGM I was told the expectation was for the GeoVS team to be expanded from 16 to 24 over the following 12 months.
In view of Simon Tucker's pet hate for bureaucracy, I don't expect any dead wood.
There may be a head of HR appointed at some stage, but gather this isn't a current priority.
Edit: Haven't heard of Bristol before. Is this a new office?

[lavalmy] 25/1/2019 16:52

Bristol, I think C5.

My impression, having listened again to the webcast and digested the recent news, is that they are rushing to get the people they need to execute on these expected contracts.

That begs the question. The Philippines was booked last FY and has restarted as expected, so that cannot have come as a surprise. The Kuwait project has not really been started, although they have booked the revenues. Any addition to it is the decision on what sort/how many transponders to buy and that decision has been awaited for 18 months or so. So not new news for SRT but might require some project manager or such, but not new developers.

The Bahrain expansion has been talked about by SRT almost before they sent the hub over in 2015. That it is about to start has probably put the skids under SRT, as now they have to deliver something that they have never done before. I have great confidence that they will. So yes, there you can see that they might need manpower - of course having done that once, they will be in a prime position to do it again both in terms of having developed a system, having the people and the reference which Bahrain has historically been keen to publicize. But it doesn't seem enough to warrant the enormous expansion of personnel.

Two things may be in play here. Firstly, after the Indonesian delay and then the Philippines, plans for systems development and business development were put on hold or scaled back and the more secure foundations of having the Philippines and other contracts about to start has led to that pent-up demand to be satisfied. The other aspect is that other contracts are about to come in, one of which is Saudi. They are also expecting almost $200 million of business from the Philippines, including the $39 mn already signed, in the next three years. So no wonder they are putting the foot down.

I'll bet they are hoping that the new man in Bakamla takes his time. And if India come back saying their (pirated) system doesn't work, well back of the queue.

[countryman5] 25/1/2019 16:19

There has been a substantial seller, as of late. Perhaps he / she has now cottoned onto the recent news that SRT is seeking to employ an additional 25 talented personnel in full time positions. My understanding is that there are about 60 people in the current SRT team. This is an enormous expansion. Where are they going to be located? I note that Bath is mentioned as a location in addition to MSN and Cardiff.

[9degrees] 25/1/2019 15:39

But have you read his letter to all the citizens of France especially the gilets jaune about the "Grand debat"?
Idealism you are right eagle eye

[eagle eye] 25/1/2019 15:07

Idealistic words. Political rhetoric.

[countryman5] 25/1/2019 10:04

Mr Macron, a former investment banker, is now actively encouraging French companies to embark on cross-border mergers to create European champions.

[countryman5] 25/1/2019 08:27

LAV,

I would imagine that Qnective would have incurred very substantial costs with regard to the previous Indonesian contract. Qnective must be feeling nervous that SRT are approached directly especially after they can see how Philo 2 is being organised. My understanding is that Indonesia is working directly with SRT on another major contract. Why feed Qnective?

[lavalmy] 25/1/2019 07:40

From the top dog at Bakamla:

'On the same occasion, Head of Bakamla also said that Bakamla's development plan as an Indonesian Coast Guard would begin with the validation of the organization in accordance with the needs of the operating unit at sea, then the construction of the Operations Control Command Center (Puskodalops) and complete other supporting facilities and infrastructure. The plan for the construction of the Puskodalops has been coordinated by Kabakamla with government institutions in the financial sector including Bapenas and has even requested assistance from the Corruption Eradication Commission to specifically supervise the use of the Bakamla budget to avoid irregularities.'

They seem to have overcome the paralysis of the corruption cases. It wasn't the previous head that agreed the deal with Qnective but the one before him. A note of caution is this meeting was to discuss new uniforms - and a guy who starts out like that is going to want to scrutinise everything. Of course, SRT are the dominant force in AIS based maritime monitoring, so would be a natural partner with or without Qnective's involvement. At least Bakamla is on the move.

[yumyum] 24/1/2019 22:40

At last....it seems.....for long-suffering SRT shareholders....we are going to have a very positive and interesting year.

Countryman, I agree with you....to a certain extent. Any takeover approach will surely be made direct to the Directors of the company, because so many of the company's shares are tightly held and close to the company. I agree it might come with no warning. For sure it will have to be well in excess of £1 per share (probaly in excess of £1.50). I sense a private equity company as the most likely. Probably SRT is best managed privately and outside of the public listed space. I assume the major shareholders will judge when that time is right. Certainly not now, and I personally doubt it happens (if) before 2022.

Let's enjoy the ride. Eco-Techno-Export.

ps edit : cash flow-profit-shareprice (for DJT)

[countryman5] 24/1/2019 19:15

Interesting times.
Dedicated watchers of SRT on this BB know that this company flies beneath the radar for most institutions and PI's. However, those that watch this BB know that SRT is approaching a 'transformation' point and the Brokers note, even with its conservatism,will open several eyes.
Institutions are very short of 'good small companies' to invest in. One of the problems for institutions is, how do they acquire a sizeable stake?. Are any of the major holders sellers? If someone wanted a 3% stake (approx. 4.5 million shares) it would take some tedious buying and end up taking the price north of 50p. If they want to buy into the SRT story, it will be very difficult.I believe that there are some institutions just below 3% so they might be tempted.
However, it goes without saying that in the market place there will be global competitors of SRT who will know that SRT is about to get a lot of work and they can see that a market cap of £50 million is ridiculous. Don't be surprised at a bid coming from 'the left side' at any time. One thing that is for certain, there will be no warning.

[owenski] 24/1/2019 15:55

For the close up company watchers, there isn't a doubt about the arrival of these contracts, the problem now - nice to have - is execution. The ramping up of staff levels is not that far in advance of expected activity, and as said, gives a strong clue as to what's coming.

[goodapple] 24/1/2019 15:47

It looks like the spare accommodation of Peniket Towers is going to be needed soon. This years AGM should be very interesting indeed.