 We are grateful to Lav for digging out info which others don’t find. Sometime ago there was mention of 1 billion USD spend for the Philippines coastguard over 10 years. There was suggestion that the first slice would be 50 million. I assume that this was the contract that resulted in the year end change. I note in the recent RNS that there are two contracts, totalling 50 million. Has PCG split the contract into two to help SRT? We know that China is the driver of this big spend, including the US development of bases. Logic would suggest that SRT would be the preferred candidate. The PCG knows the system because of BFAR, even though most of the fitted identifiers are switched off, awaiting the Supreme Court decision. It would be logical to have a SRT system so that data on fishing boats could be accessed by the PCG system. I believe that the BFAR system has about 130 towers. Could they be used by PCG, or will they require much stronger ones to carry heavy radar and CCTV? It would be interesting to know if the 50 million USD contract has entered the Philgeps process yet?. |
I admire boadicea's longevity - sell at 50p ;-. For me it feels a lifetime, but I think the lowest I paid was 17p a share (sadly not last week) and that dates me to approx 10 years by rough estimate. I do think SRT is in a great position now, and I did earlier too. ST is a good leader and CEO of SRT, but it is absolutely apparent that Simon has not shown any learning ability at all regarding the forecasting of contract awards (and SRT's subsequent financial position). Simon cannot resist forecasting of contracts etc etc and all that entails. He is absolutely awful at that. Utterly and totally incapable and incompetent....but still continues! That should stop immediately. Leave it to the Chairman or CFO or someone else. I suppose one day there will be a reasonably accurate forecast but I think it would better for ME if that stopped and then I would not have to listen to something that is yet again wrong :-(
Always wrong basically.
I sold a lot over the last 6 months but have bought back over the last few days and hold now around 1.5m shares. I do hope £1 per share by Xmas is correct one of these years ! I apologise for my rose-tinted glasses' enthusiasm of earlier years. I feel wiser now but still optimistic. I do not expect to be one of laValmy's 60p sellers.
SRT current share price gives no value to the systems business at all. |
I see that Styris has only one testimonial and that from the French Navy or someone in it. Whereas our Frenchman said a couple of years ago at the AGM that it is all very piecemeal in France and even worse at a European level. How much is the UK paying the French for the small boats thing? Up there with Uganda I think with returns on investment about level too.
Edit: There is a lot of trafic of personnel to and from Airbus and SRT. |
Lav. Many thanks.
I see that Airbus has a system called Styris. I heard that Qatar used Airbus but I can’t find much info. On the face of it SRT does not have much competition in providing an integrated solution where the info is controlled by the host Country.
Perhaps the operating margin can be increased to 40%! If I was Airbus I would try to take out SRT. |
FLWIW, I favour SRT (warts and all) as an independent, rather than part of a conglomerate.
Takeover by an obvious buyer (defence sector) would raise conflict of interest/dependency concerns.
All that a big co brings to the party - apart from funding - is (maybe) political connections to arm-twist host country into action.
A bit of a double-edged sword, AFAICS. |
I guess that's the point. None of the so called competition have anything like SRT's MDA offering. Lots of bits of kit that can do some of it but not an integrated solution. Building a system from parts made by different suppliers is notoriously difficult especially if you don't have the software to tie it all together.
We just need to get over the line with a couple of decent contracts and the whole perception of SRT will change IMO. |
pinkfoot
Yump
“What if the well of shareholder money dries up? Thats the issue.”
Well why didn’t you say that in the first place ?
Yes that is the one and only reason for being part of another business. I don’t see that as in the interests of SRT or shareholders except as an escape from something worse, or perhaps if the larger business was a UK one, a way of keeping a potentially world beating defence business in the UKz
At which point investors would have to decide if they were still interested in a diluted business. (Instead of a diluted shareholding.)
I think we’re done now ? |
What are these people doing? They don't look like systems suppliers to me, despite their claims, but maybe for smaller applications?
'Alltek Marine, also known as AMEC, is the world's leading provider for high-quality, highly innovative AIS electronics and solutions.'
hxxps://www.alltekmarine.com/company |
AE probably Kongsberg. Weatherdock are too small and AIS focussed. |
laV would that be Kongsberg (Norway) and Weatherdock (Germany)? I thought Kongsberg once sold rebadged SRT transponders but now seem to be developing base stations of their own. They don't appear to make transponders or at least I cannot find any. |
I don't know whether any of them actually has a system, as Simon said. They can present as to how they propose to go about a project rather than showing how it works.
CLS were trying to get into the IOT satellite area so leveraging their satellites to cover other things (they have long tagged fish) rather than tying in other sensors to their vessel tracking. I don't think that they are in the MDA space.
Airbus would be more milspec and unused to civil monitoring of large populations so I imagine that they would just be presenting and relying on reputation.
Windward aren't really a systems supplier either.
For the Bakamla tender, there were also companies from Norway and Germany under consideration. I think that Simon is probably correct in saying that they are the only game in town at the moment and if they clinch some big contracts in the next couple of years (which will be those countries with a more urgent need) then maybe no-one elso will bother developing a system to rival theirs.
Edit. In other words, competitors would be expecting to be paid to create a system rather than doing it with their own cash. |
Question for Lav.
What companies would be competing for the systems contracts mentioned in last weeks RNS?
I am assuming CLS, Airbus and an Israeli company. How do their offerings compare? |
They have only really sold one system and that was to Bahrain - Saudi has only just got their phase one and the Philippines is stalled. Bahrain don't seem to be charged anything as they are good pals and very small in any case. So it is both lack of numbers and early in the cycle - quite what sort of percentages could be involved is also a complete unknown. |
Colliera
Thank you for your reply.
Hear what you are saying and that all makes perfect sense.
However, to date there has been no sign of recurring/maintenance revenues from the systems side of the business.Indeed there has been periods when a big fat zero has been recorded for System sales of any description. Whether this is because it’s too early in the Systems development cycle and/or the lack of numbers of Systems sold, I don’t know.
Certainly significant recurring/maintenance revenue would help with the feast/famine cycle SRT seem to be perpetually locked into but, right now, it’s simply not there. |
Looking at the expansion of the share issue in comparison to the expansion of its product offering and capabilities, I don't actually feel that I have been much diluted. In other words, I merely own a smaller share of a larger entity but the same resulting intrinsic value, even if the fruit may be slow to ripen. Or as someone once wrote, "The bud may have a bitter taste but sweet will be the flower." |
LeighFord Apologies for late response - I feel sure ST has mentioned this before, but as I worked in complex IT sales, one would never sell a specialised system without a support package with agreed service levels, response times, upgrade paths for items becoming legacy, software patches, security patches, operating system updates. And usually if a sale was e.g 2M, 1.4M might be making the system live and say 600k over next 5 years support. Once sold SRT will have potential upgrades to capability as upsales on top of that. |
Yump
What if the well of shareholder money dries up?Thats the issue.Still unclear?
Good rise! |
Is it not a big player picking up shares currently? |
Still no answer as to who exactly would benefit from SRT being absorbed into a larger group.
I could repeatedly repeat what you guys have said using my management book of experience, but its an academic point from a lecture.
In theory more cash available. What other benefits ?
The problem has NOT been loss of contracts to other larger businesses.
Its NOT been inability to deliver product.
Its NOT been cashflow because of SRT’s size, although dilution is never fun for shareholders.
Its been contract signing delays. Its that simple.
Where is the problem that would be solved ? Other than the VERY recent issue of ratios which might not be a problem any more.
As someone who has 30+ years running startups and businesses, I’m looking at the practical problems of running SRT.
So far, I can’t figure out how to force slow moving governments to sign quicker, other than turning up with a briefcase of cash as a prezzie for some key buyers, but I have no experience of that. |
Yes well done Boadicea.In my old days ie 40 years in the city, including M&A, I think I would be talking to BAE and US companies. As a 10 year plus holder it would be sad to see SRT lose its independence but it is hugely undervalued. |
Good post Bodicea-it pretty much sums up the ride over the last 20 years.Most of us want it to succeed but it’s tough out there and the many cash calls to fill holes really makes you wonder how it would go with a bigger balance sheet behind it |
I see I’ve attracted a triple dose of advfn viruses. Only trod in one. Sorry about that.
I suggest folk check on their other posts before engaging. Whatever you do, don’t call them by their first names.
Meanwhile perhaps someone can explain what possible purpose for investors, a larger company would hold. Are you in the habit of buying one share to fit a particular strategy but then carrying on with something that would never have been your original selection ?
I’d love to see a nice long list of all the uber-bulls as well.
Seems a lot of posters are just making stuff up now.
As for 50mln pbt ever - thats bonkers and the term “margin” is not applicable to the difference between pbt and revenue. The difference includes fixed costs ffs.
Also any business making 25% net profit is on planet Zog, especially one involved in contracting. |
I may be one of the longest holders of SRT on this board, dating from June 2008. It has served me well, as much by luck as judgement. My best buy was 15000 at a little over 2p per share in April 2009 when it was priced for bankruptcy. Brinkmanship is nothing new to ST!
However it has been highly profitable because when I became overweight in 2016 and 2017 in a somewhat speculative share I decided to cut my position. Equally when the price collapsed at times like December 2015 and April 2018 I felt that it did not recognise the company's potential and added. Similar actions for the same reasons have occurred since and the net result is a substantial overall profit.
I might add that this 'text-book' approach does not always work but my conclusion is that SRT (and essentially ST) is a survivor and on its record should likely continue to be so for those that can stand the stress! Hence my relatively relaxed approach to the current delays and apparent despondency exemplified in the share price
Whether it needs to be part of a larger enterprise with more substantial resources is an interesting and, judging by some above comments, a divisive question. Of course it needs substantial and patient backing to cope with the high viscosity and occasional blockages of governmental procedures. It couldn't survive a dose of city get-rich-quick financial wizardry or 'when will it pay me back' bean counters. It essentially needs the financial backing of a rich enthusiast for its vision who will support it through thick and thin - someone believing it can and will succeed big time given the chance. Some of the contributors to this board appear, to their credit, collectively to satisfy that requirement.
PS: I still have my pot of jam. |
No doubt LeighFord may have been being sarcastic/ironic about "...ST’s heroic efforts on all fronts and their exemplary attitude to IR", but I don't see where s/he said anything about ST pushing the stock. For my part I see that as an outrageous suggestion, but that's just my personal view. |
I think it will take a lot more than that.
SRT view and have been doing so for some time now their customers as accounts (it was mentioned in the webcast), the idea being that there will be repeat sales as they build the systems out, recurring revenues from software and satellite data. The plan was to start charging for upgrades from last year or thereabouts - I don't know whether that is happening.
I think the satellite revenue would be already coming in from the Philippines (a £500k was booked a couple of years ago) were it not for the illegal fishermen throwing a major spanner in the works and now that the four years is up, some sort of deal will be necessary for tracking those vessels which fish in High Seas Pocket 1. SRT will not be providing it for free. SRT buy the data by geography and sell by the number of vessels so clearly there is potential for extremely high margin growth as and when these systems are up and running.
All this has yet to be evidenced of course. But it is not unreasonable with say a coast guard that has a 10 year plan for a build-out that there will be significant repeat business. An example could be Bakamla who are buying a system for $180 million. I don't think any transponders are involved so once the system is in place, there will be hundreds of thousands of vessels showing without any reliable means of identifying them. The obvious thing will be to put transponders on them. Then there will be gaps in coverage, along comes satellite data to plug those etc. |
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