AE
The GEF is pretty much a bank decision - UKEF guarantees 80% of up to £5 million on a no-look basis, anything above that they have to sign off. This is completely different to a UKEF loan to a sovereign or other purchaser.
Re LGB, I think they have headroom of some £16 million but £6 million of that will be required to roll over maturing issues next month and December.
It certainly makes no sense to fund very short-term spikes in working capital with equity, but then again if they hadn't spent their equity buying inventory to sit on the tarmac at MSN? The one good thing about this kamikaze working capital management is that it can ship quickly and convert to cash. |
The price is around 60% higher than two weeks ago so a placing does make sense. Last one was December 2023 for 10mill at 35p? |
If SRT needs medium term funding, they have in the past used LGB Capital where I believe there is headroom for additional capital see:
LaV, I think you also wrote about GEF providing export finance up to £5m if certain criteria met.
I guess Richard Hurd is heavily focussed on the Performance Bond at present but some sources of capital may be easier to access if it is for working capital to enable a contract to be fulfilled. |
fft
It all depends on when the Bakamla project starts. The first milestone is in effect already paid for and ready to ship and should convert to cash quickly - others will have rights to some of that cash inflow. Whether what is left is sufficient to fund the next milestone, which is mainly installation of the first one, I do not know, nor whether it would fund the first one for Kuwait. Saudi is similar to Bakamla, though they are not quick payers, needing to cross-check before kit leaves the UK, after it gets to Saudi etc. |
Potential placing to fund the roll out ? As payments are not up front there will be a working capital increase. Especially if more than 1 contract comes in at once. Could be debt (did i read somewhere that 12% is being offered ?).Btw, given srt previous on releasing a good news RNS followed a few days later by a placing (I was hit badly a few years ago) I have been surprised and curious that they didn't use the bounce to get something away.The current price action does seem to indicate confidence that some sort of funding action will take place soonish. If they get away without it, that will be fantastic |
There seems to be a gap from the latest RNS at ~37, that might be a good target for a pullback. |
I'm getting a hammer ready to raid the piggy bank - suspect it will undershoot 40p a bit, so buying at 40p possible. |
The current share price discounts:
1 - Bakamla Indonesia contract starting soon - It is all agreed but who knows when it
starts. What seems clear to me is that it will start soon. All is now agreed.
2 - Kuwait contract starting soon - It is all agreed but needs full
contract signing, which includes performance bond. Expected by end-November but
company expectations history is a disgrace of no learning. New paradigm? We will
see.
3.- Smallish ME contract starting sson
4.- Another smallish ME contract starting soon.
Take away those discounts and the share price should much better represent the astoundingly low valuation here. Failure on more than one of the above will mean takeover at a very low price. Sadly but correctly.
Just my opinion. |
Are you going to write a book ? |
 I imagine that the Board has a strategic plan to deal with the substantial growth that is fast approaching on the systems business. Employee numbers are rising to meet the extra business. Some are located abroad and the UK team are split between MSN and Cardiff. I understand that working from home suits many, who obviously visit MSN and Cardiff when required. MSN works well with the adjacent dedicated warehouse and nearby hotel for visitors. (A Saudi team will be visiting for the factory inspection before kit is dispatched). My understanding is that the Cardiff office space allows for expansion as demand increases. Selecting new team members is always a challenge and occasionally some choices do not fit and have to move on. I suspect that the real challenge is getting the right structure at the top. Now that the cash is about to flow, Simon's workload needs to reduce. Although customers only want to deal with Simon, that is clearly not possible as the number and size of contracts develop. |
Kuwait, with 500 Km of coastline, engages with an initial $200 million systems contract. Neighbouring Saudi has a 2640 Km border. How much can Saudi afford, or does it want an inferior skeletal system? Saudi border guard will not be impressed. Saudi is spending vast amounts on its new town and resort but surely it wants to know what is going on in its waters, especially with all of its fractious neighbours. Simon often says, but I suspect the market does not comprehend, that it will take many years to finish a comprehensive system. Saudi has only stuck a toe in the water , whereas Kuwait is starting with quite a detailed package; possibly including autonomous vessels from Ocean Infinity. One thing is certain, technology will always be providing new offerings for SRT to bolt on. |
As I said a few days ago, it’s the David Brent ‘good news and bad news’ trick in my view-hence the announcement of an unsigned contract.I sincerely hope it gets signed in short order |
Hi LaValmy,
Let's hope so!
thanks for the extra 'colour'.
ATB |
Extrader
No doubt they did intend to publish the results during October, but that was expecting the Bakamla contract to have started in the 5th quarter and it also had a lot to do with having the financial ratios in a good enough condition to bid for an important contract.
They claim that the contract has since been split into two and that therefore they don't have to meet those ratios. Much more likely is that the contracts have been delayed or that SRT is no longer eligible because of the ombudsman issue. I think it is the former and have no doubt it is/was the PCG.
I really don't think they will release the results until the Bakamla contract starts and then the AGM date etc. |
So who is going to back up the truck at 40p ?
Indeed!
The FYE (extended) results are due out by end October. From the RNS
.."The Company intends to publish audited final results for the 15 months ended 30 June 2024 during October 2024..."
Meanwhile, implementation of the 'fast-track' Kuwait contract is unlikely to start before end - November :
.."."The award is subject only to completion of the formal contract and associated performance bond which are now underway and expected to be completed prior to the end of next month, with implementation commencing immediately thereafter..."
So, paperwork and PB hoped for before end November.....
On past form, we'll have the 'awful' results before the definitive contract....AND any peripheral fallout from the US election fireworks in-between.
Aargh!
GLA |
So who is going to back up the truck at 40p ? |
No doubt it is very similar to his online piece earlier.
I personally think it is mad and he perhaps should have noticed that the financing agreement has been concluded and is pending signature, within a few weeks of which milestone one for £45 million, the same they had hoped to book if it had come in before the old year end or again before the end of the extended year end. Which leaves £15 million of other systems revenues during to next nine months to reach his 'not beyond the realms of possibility' £75 million for the year. And that for a company that has just signed a $218 million contract over two years starting end November? Is SRT going to make the Kuwaitis wait for six months?
As I have said before, once the Bakamla project starts, then we will have a new broker's forecast issued with forecasts much higher than what Thompson is suggesting. The market will have upgraded things long before Thompson puts pen to paper that morning. |
There is a write up of SRT in today's issue of Investor Chronicle. I thought it read quite well but I disagree with the 'Hold' recommendation. I think now is a good time to buy SRT to increase existing holdings or as a first time purchase. |
It appears that Vietnam is proposing that its fishing fleet are fitted with tracking devices. I understand that they have been talking to SRT for a long time.
EU supports Vietnam in fight against IUU fishing: EU Ambassador
Tuesday 09/24/2024 - 16:39
The fight against illegal, unreported, and unregulated (IUU) fishing is extremely important, so the European Union (EU) is supporting Vietnam by their legislation in the field, said EU Ambassador to Vietnam Julien Guerrier in a recent interview granted to the Vietnam News Agency.
The fight against illegal, unreported, and unregulated (IUU) fishing is extremely important, so the European Union (EU) is supporting Vietnam by their legislation in the field, said EU Ambassador to Vietnam Julien Guerrier in a recent interview granted to the Vietnam News Agency.
“The fight against IUU fishing is extremely important because we see fish stocks manipulation around the world, and for the fishermen, we need to ensure that the stocks of fish are managed sustainably and that there is no IUU fishing,” he said.
He added that the issuance of the “yellow card” for Vietnam’s seafood industry in 2017 ensures that “we are encouraging Vietnam and working together with the country to put in place the right legislative framework. And I must commend Vietnam for having done it.”
“Actually, the legislative framework now is in place, equipping their vessels with tracking devices and ensuring that the new legislative framework is properly implemented and enforced, and that when fishermen are not respecting the rules, they are sanctioned. There are new decrees on administrative sanctions that have recently been established and implemented by Vietnam,” he added.
In the upcoming inspection in Vietnam, the ambassador said the EC is much looking forward on how effective is the country’s implementation and enforcement of its new legislative framework and new decrees on administrative sanctions against IUU fishing-related violations. |
bathbuoy
Well spotted. This is new news as is the same position for Kuwait on LinkedIn, an hour ago for both.
Edit: And I see from their website that they want a head project engineer to manage both of them. It sounds like they have heard the starting gun. |
Senior Project Engineer - Indonesia. Posted on the SRT web-site, or is this old news? |
LaV there are some folk cannier than me who have bought low, sold high and repurchased when the excitement faded. For my part, I have bought low, and also bought too high and only sold and repurchased to shift all my shares into an ISA.
The point was a general one albeit SRT may well have some holders with large CGT liability. You're right about indexation. "We wuz robbed" |
AE
Who has significant gains on SRT? HMRC are dammed lucky that they stopped doing index relief!
Edit: And then if you have gains which you cash in, one or more of the buses comes in and you can't buy back for 30 days or if you do you make a loss at the old CGT rate. |
It's clear from the sheer volume of discussion and press reports that the possible removal of IHT relief for some AIM stocks is deterring buyers and probably causing others to sell to realise CGT before the rate is increased.
In SRT's case you can add the perception outside of the better informed that SRT is a "Jam tomorrow stock". I would hope the signing of the UKEF loan agreement leading to the start of the Indonesia project would provide sufficient good news to warrant a reassessment of the label.
After the budget we should at least have a more fact based valuation. |
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