Srt Marine Systems Share Discussion Threads

[cliffpeat] 31/1/2019 08:41

The risk list is daunting - but this is the game in which SRT is now playing.

Practically, it may be the IFRS 15 income recognition line that has the first impact on share price It almost feels as if this is lining us up for a low top line in the 2018/19. numbers.

[robward] 31/1/2019 08:28

Interesting to note that way back in 2005 SRT had a mere 44m shares in issue, we are a different company now, but i hope the dilution will end soon.

[yump] 31/1/2019 08:27

Might be a simple matter of which is cheapest. In very general terms, while earnings are low, equity is cheaper, but with higher earnings, paying interest is cheaper.

[fredfishcake] 31/1/2019 08:24

I thought we had a credit facility available which would have been ideal for this - hopefully short-term - need for W/C? It's not like the share price is high at the moment, so I regard this as unnecessary dilution.

[yump] 31/1/2019 08:18

Given the look of those contracts, I can stand 10% dilution of whatever earnings appear. The main risk outside of SRT's control appears to be contract payments although plenty of other businesses survive dealing with that problem.

[eagle eye] 31/1/2019 08:04

Placing of 13.4m shares dilutes existing shareholders by 9.6%.
153.1m shares x 34p = current market cap £52m.

[crystball] 31/1/2019 08:03

It's like a game of snakes and ladders! I hope we see the brokers note soon. Lots of detail to digest in this RNS.

[2vdm] 31/1/2019 08:01

Bit miffed having bought another 10K at 34p to add to my pile after ST's last broadcast.Would have been nice if he has phoned me to offer them at 30p! Bit miffed, but good to see greater clarity of where the contracts/potential contracts stand.The next 2 years look very interesting and I'm sure my 34p will reap a handsome profit.

[fft] 31/1/2019 07:56

If ST could get Kuwait to pay up, this placing wouldn't be needed.Perhaps that is why the large discount. Institutions don't like the way that customers don't pay up and nothing happens.Would have been nice if the Philippines contract update had also said that some cash had been received based on the milestones. Sounds like receivables is going to be huge number....

[countryman5] 31/1/2019 07:37

If we are going to move from the kindergarten to the senior school, we have to have some institutions on the share register. Yes, they should have paid 35p per share but these are the bullies and they have the whip hand. I suspect that Mr T thinks that once we have them on board they are going to buy into the after market and drive the share price north.... only time will tell if that is the case. AVERAGING. The new investors have made a 20% profit before parting with their money. If institution A has bought 2 million shares at 30 p and then buys a further 1 million at 40 p their base price is still only 33p. The books look good.I suspect that the institutions still regard this as high risk (two cancelled contracts) and may well wait for the ME contracts. The institutions have bought into a bargain but most likely in six months time this will have been forgotten by the long term shareholders. The bottom line is that SRT will soon be throwing off loads of cash and this will be the last chance for the institutions to get a foot hold in this dynamic company. Unfortunately we need them.
I suspect that the institutions will have seen the brokers note and will have seen the forecasts for this year and next. I am hoping someone will put these numbers on this board.
THE BIG QUESTION?
Will these new institutions be short or long term investors? Will they sell for a £1 in the takeover in say 6 months, having made a quick killing, or will they hang in for 3 or 5 years and allow this UK company to grow into something very very special?

[owenski] 31/1/2019 07:32

Kind of a given that they'd need a bit more WC funding, cant run these projects on limited engineer gene pools.

Guess it'll be a bit more short term pain but the outlook is credible.

[lavalmy] 31/1/2019 07:25

I would expect Simon to put the presentation up on the website, as before. The announcement itslef is fairly detailed.

[pugugly] 31/1/2019 07:22

Humm!! Significant discount - I wonder what was disclosed to the participants to get them to cough up?

[lavalmy] 31/1/2019 07:15

I had heard that they might need some working capital, not surprising given the large increase in staff.

They seem very confident about the M/E and the other Philippines contracts.

[ramnik007] 31/1/2019 07:09

More share QE, with promise of even more jam! Will I have a big enough jar?

[lavalmy] 30/1/2019 13:12

MAXAR is the parent company of MDA and has a five year chart to rival exactEarth, down from $80 to $5.70, market cap $335 mn, so small fry really.

edit: I had another look and it seems priced to go bust (it has $3.2 bn of debt) and yet expects adjusted EPS of some $4 for 2018. Either it is an absolute bargain or something is really wrong here. In fact it has, a disastrous acquisition, suspicious accounting, Class lawsuits and some satellites going wrong, on top of a pile of debt.

[lavalmy] 30/1/2019 13:08

I have been having a look at Linkedin to see if they are adding via that route, but no.

On the other hand, (brace yourself C5) it looks like they have hired a Frenchman who went to the Ecole Nationale de la Meteorologie (one of the Grandes Ecoles) in Toulouse. He says he still lives there. Titles himself as Head of Products and Innovation at SRT. I had thought that maybe he had something to do with fish modelling or such for the Philippines, but he wouldn't be calling himself that. I don't know when he joined.

Another interesting character is Francois Debroux who seems French Canadian, calling himself 'International Sales & Business Development Director', who started in September. He has been around the block a bit but his last job was for a Canadian outfit MDA where he 'proactively reached out to new customers for the sales and deployment of global enterprise imagery portal “Bluehawk̶1; fusing SAR, optical, AIS and other databases for maritime surveillance' and 'executed and spearheaded internal and external business strategies successfully leading to the sales of multi-million-dollar deals of Radar imagery in the defense and security market within EMEA.' Sounds promising and relevant.

[boadicea] 30/1/2019 10:18

LaValmy - My thoughts too. SSY have a lot of experience in negotiating and managing contracts, much of it in the viscous area of quasi-governmental authorities, ESA, BBC etc - generally successfully although I am not aware of much being outside Europe.
I may look up some of their directors' connections.

[lavalmy] 30/1/2019 05:30

Nothing in the press about the EU visiting Vietnam this month, so it must have been postponed. They visited in May last year, so maybe again this year. That would tie in with the deputy PM's request that the fisheries people come up with their scheme to be approved by the PM in Q2 and also with the newly elected EU parliament being in place to approve the trade deal.

[lavalmy] 30/1/2019 05:24

boadicea

Interesting about SSY. They could be a good source of recruits for some of the new requirements.

[boadicea] 29/1/2019 21:12

pldazzle (7957) - Thanks for that link - very interesting, especially the IHT provisions which LaValmy mentioned.
It raises a number of questions and implies that previously qualifying SSY shares lose their AIM related IHT concession. Also, they should not be bequeathed in large quantities (over Euro 32500) to grandchildren unless a parent has died [... and what happens if a subsequent DoV is executed - perhaps after a deceased's portfolio has been lquidated?]!

However, I digress from SRT.
Looking at tthe SSY site, I note thay have a Marine division so will likely be known to ST etc. Any synergy - or competition? Just outside Bath too, but Easwards rather than South..

[lavalmy] 29/1/2019 09:03

Think so pldazzle, thanks.

It seems to me that Richard Hurd should be looking to set up an Irish domiciled but UK tax resident subsidiary (not a parent company) to sign and deliver all new contracts. That would put them in the same UK tax position as now, including patent box relief etc, but for customs purposes vis-a-vis other countries they would be in the EU. I used to do this as a living but that was a long time ago, so best to check the details.

[pldazzle] 29/1/2019 08:38

LaV
Is this the document you were looking for?

[lavalmy] 29/1/2019 07:53

boadicea

Thanks for that. Unfortunately I cannot track down the SOA document itself, but it seems that the scheme keeps them tax resident in the UK (Ireland has withholding taxes on dividends) for all purposes except that shareholders would be potentially liable for the Irish equivalent of IHT (in fact, as I know from having to pay it, it is much worse).