I'm interested in the requirement of this (assumed Kuwait) contract for a performance bond. This is a common feature of construction contracts to ensure the contractor fulfils what they have been paid to provide. There are all manner of organisations willing to provide the finance and rates charged can be eye wateringly high, as much as 10% of the value of the bond.
I'm presuming SRT will seek Government backing in the form of a UKEF bond to reassure the client. DAK if this how it will occur? Given the lengthy gestation of the UKEF loan to Indonesia is the timescale feasible? How much does the Government charge for such finance? Anyone with experience here?
Would there be an alternative that is affordable? |
And simply on ships.
Edit. I didn't spot this bit in all the excitement.
'as well as further projects as this ambitious customer grows their capabilities in the future.' |
'mobile' sensor might be Ocean Infinity?
yes and/or drones |
Funny isn’t it. The analysts etc get paid a mint to issue frequent price targets up and down by a few % on FTSE stocks as if they’ve done lots of tricky calculations and then get stuck when forecasts are likely to be multiples of previous values.
I imagine they’ve been thrown into panic because it must be tempting to give the previous exact high as a target, but we might be into no-mans land now, so they might need more complicated calculations. |
Cavendish merely report the announcement and then say
"Given the substantial size of these contacts and consequent extreme effect on forecasts, TP and forecasts remain U/R until further updates, precise implementation and revenue profile are clear across today’s $213m contract and the $180m SEA contract, which are expected in the coming months." |
YumYum
I would say that people would be in a bit of a quandry. The share price has gone up very sharply and they might feel that they have missed the boat. And on the other hand, three more contracts are expected to start soon, all of which will be positive, Bakamla extremely so.
I don't know if it is completely true that institutions won't buy unless there is a forecast, but I doubt that they will be joining the party at this stage. A few weeks from now and they might start looking. |
'mobile' sensor might be Ocean Infinity?
Anyone have an opinion/knowledge on rule of thumb/whatever... where there is transformational news, share price jumps, profit takers pile in, share price pull-back, share starts to rise again, second wave of profit takers offload.....what happens next ? Easy sellers have gone and share price rises to a new equilibrium level ? |
C5
I think Cavendish is behind a registration wall rather than a paywall. I am on it and don't pay. |
A marine technology company building momentum
Simon Thompson: It has won a huge contract that should underpin a transformational year for the company’s earnings |
The cavendish morning update is also behind a paywall. However, one can assume that it is widely read by institutions.. Any thoughts on 'mobile' sensor platform? |
Simon Thompson has written something this morning. Unfortunately it is behind a paywall and in any case seems nothing more than a repeat of some of this mornings RNS. I don't know if he has put in a target.
He might well be preparing for something more in-depth. |
I tried to add to my holding first thing and could not get an online quote. The market had already added a substantial mark up as well as limiting the maximum size of a trade. I held off until there were signs that profit takers were selling and managed to deal via a broker (i.e. not an automated trade). Happy with the price and hoping there's more to come. |
Regarding the timing of these 4 contracts worth a total of $420m (this one announced today, Bakamla now agreed with UKEF/Indonesia government, plus 2 smallish ME follow-on contracts) ST said last week ''...we are very focussed on those 4, and getting everything in place....as the start of those 4, ALL of them, start WELL before the end of the calendar year'' (my capitals for emphasis).
And Nexus to start shipping in December. |
ftt
SRT is running the whole contract, but the in-country partner does the work, helped by the program manager, in turn with UK support. This is the same as Indonesia and the others. They generally have two people, the program manager and the success manager, who seems to be local. Not much expansion needed. The Philippines has a tech person as well. |
The broker has produced a note but has not reinstated forecasts 'until further updates, precise implementation and revenue profile are clear across today’s $213m contract and the $180m SEA contract'. They say also that the UKEF loan agreement has been completed and is pending completion, by the latest end November, with the other two expected 'by December'. I find this all a bit odd and reckon that they are actually expecting them quite soon, particularly Bakamla. |
 most stockbrokers have minds synchronised with day to day share price movements and don't understand that innovation needs 15--20 years to express itself in the share price. See the histories of the UK's 22nd Century engineering successes CWR,,OXB, FILT, and still unexpressed financially. IKA, IES, ITM, and (incl BioSc).AVCT, IMM, ONT etc,etc. If the share price goes down, they worry that undisclosed bad news is around and they themselves keep selling at the bottom.
'
A metaphore for the facts is that of "pregnant elephant".One may have been mesmerised by the fertilisation process but threafter never been able to discern the time of birth.
During the whole period there has been an out of kilter between perceived valueo of the share and its actual value ie % of ultimate value. The bottom price of the slow attriton comes "when the waters break" as with SRT last week whent Simon Thompson abruptly left the UK amd we knew that birth was imminent, ie when I doubled my tiny holding.... and redoubled today, on the inevitable (Fibonacci?) - not - pull back. |
Cavendish have their forecasts under review-I suspect they won’t publish anything until signature |
And, while I am here, is the 213m just for the SRT part of the contract, or does it also include all the physical infrastructure that needs to be built - control rooms, towers etc, which SRT will need to buy from local contractors in which ever country it is.Is the maintenance part just for the SRT equipment or will it also include maintenance of the physical infrastructure including radar, towers etc ?Basically, is SRT only responsible for it's own stuff or is it having to expand and manage areas outside its in-house capabilities? |
How much of the 214m dollars is paid by the customer at the start? |
Have there been any broker notes/estimates showing how this contract will affect revenue, cash, PBT over the next few years ? I like the sound of the contract, but how profitable is it ? Market cap is about 100m. How is cash generation looking ? Will the company need to fund more upfront before payments come in ? (It has happened before). Yes, future contracts will increase everything, and probably more so as at that point all infrastructure to handle the contract including the very important support and maintenance (higher margins) part. |
Funny how often the share price hovers around so-called support and resistance levels, as if those represent a valuation of the business itself.
And we think we are technologically and scientifically advanced !
Snake oil still sells and sometimes its self-fulfilling. |
Congratulations to all the SRT team. An amazingly big and, until fairly recently, unexpected contract. Very much looking forward to other positive RNSs in the near future. If there is no further good news in the next few weeks then I might become grumpy ;-)
Once all the profit-takers have sold and moved on then the share price will undoubtedly shoot through the 80p level. I have not sold any yet. |
It's a bit too early for Poppy Day but I think I heard the sound of a collection tin being rattled. |
I think “hyped-up̶1; depends on a detailed view of a business. Eg. The product, any moat, IP, a product or a system, who they are selling to, if there’s a competitor, etc. Some are peddling nothing special or are not involved in any significant negotiations in any market worth much.
In the US high turnover is valued because it shows control of a market. Here we are on profits all the time and people wznt a poxy tiny dividend in growth companies, rather than reinvesting for growth.
Anyway we should stick to talking about SRT I think.
My view has been that SRT could do relatively nothing about delays, regardless of how good the system product was. Whether you believed that or not is a different thing. I also think ST has been between a rock and a hard place keeping investors informed.
It took me 5 years to get a first tiny order for an industrial product, while I watched my bank balance dropping, so I’ve got a fair amount of patience ! |
Again, in reply to Yump's "hyped up loss-maker" comment - isn't that exactly what SRT has looked like to a balance sheet analyst for the last n years?
High turnover and no profit/eating cash is of course no recommendation and deserves a low capitalisation/revenue ratio.
However, I hope I have found a couple of examples of what he is looking for, one of them a dramatic turnaround from extreme covid reaction and the other an emerging ai prospective beneficiary, both coincidently based in Oxford.
(For those interested I refer to OXB and ENSI) |
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