As the accounts would be full of red ink I think you're right Pinkfoot2. It has all hinged on this deal getting over the line and accounts prior to deal would have had a huge impact on share price and therefore the look of how stable the company is.
Buck581 I agree! Happy to take a few more at 35, and I got a few more the other day at 40.
It's a decent board this generally, thanks all for contributions and esp CM5 and Lav thanks for all the thoughtful and detailed posts. I've held for a very long time and this feels like the start of the curve to me, given the massive geo-political risks around the world, the new bigger partner in a complimentary field and the potentially 4 contracts due in short order (I know we've heard similar before). |
The accounts are probably ready to announce but the impact of funding / signing of Kuwait affects going concern statement, hence delay and Jan AGM. There might be news direct from Kuwait before RNS. The signing will be high profile. Will the UK ambassador be in attendance? However, I doubt if Airbus or Leonardo will be attending! It will be interesting to see if Ocean Infinity content is mentioned. |
Then it seems to me they don’t want to publish the accounts until after the deal announced is documented properly and possibly the contract win signed.
CM-what’s the view? |
Yeah that's what they said in March "The Company intends to publish audited final results for the 15 months ended 30 June 2024 during October 2024." |
I thought the accounts were being published in October? |
 May I suggest that you do research on Oliver Plunkett, the CEO of Ocean Infinity and the new NED at SRT? He is clearly bright and able. He was a criminal barrister at a London Chambers and has been building OI for seven years. He would also appear to have a social conscience.
Kuwait appears to be the first time that OI kit is being incorporated as a bolt on for a SRT contract. OI has more than 500 employees. SRT must hit the ground running in Kuwait. Is there merit for SRT to receive a secondment from OI of a key player? OI would learn more about the workings of SRT, or does SRT not wish to reveal all of its cards? How much will our new NED be told?
I suspect that Anthony Clake and Oliver Plunkett are formulating the ‘golden handcuffs’ for ST and the key players at SRT. They will have a time lapse and probably be made of paper! If OI reverses into SRT, the logic would be to award OI share options which can only be cashed after a certain period.
The risk is that a hostile bid from a third party arrives before OI is ready. |
I’ve never seen this board so gloomy. It seems that big contracts are a very bad thing !
What exactly is it that the gloomsters want ? |
The SRT take over conundrum reminds me of the impending US elections. There are about seven states that are relevant in seeking victory. There are about seven shareholders who will decide the outcome of SRT's future. |
The reality CM is OI have a grip on the company and not far off having a 25.1pc blocking right-not sure whether that is a good thing in your ‘bidding war’ analysis. |
The answer is obviously 'no'.
Although of course he would be inside, therefore couldn't share it with his colleagues, so it wouldn't do OI much good anyway :¬) |
Oliver Plunkett is our new NED and should be at the AGM in January. Interesting question. If the company receives a bid from a company, other than Ocean Infinity, is Oliver Plunkett kept in the dark? |
SRT have kind of shot themselves in the foot here, if the contact is signed on Thursday will it shoot up or hover around 35p where the £7.5m fund raise will be I guess they could announce both at the same time ? |
Nice post Countryman, a OI take over is definitely a possibility |
If you are considering the sale of some SRT shares, may I suggest that you pause the decision, for two reasons?
Firstly. There will soon be a brokers note forecasting the June 2025 year end. (This Friday?) This will be based on known milestones on four MDA contracts and should reveal substantial cash balances, together with PBT of between £20 and £30 million. There will probably be a share price forecast of between £1.30 and £1.80, based on these forecast figures. Such a forecast will not include potential revenue from DAS and Nexus.
Secondly. Ocean Infinity will eventually be the proud owner of about 22% of the company and I imagine that Marshall Wace will have completed a great deal of research into SRT. Traders, punters and ‘friends’; of Ocean Infinity will be snapping up SRT shares in anticipation of a bid for the company. I believe that the bid will arrive in early 2025 because Ocean Infinity has no reason to delay. It will not want anymore contracts arriving to boost the share price. I anticipate that numerous global companies would also like to own SRT. There is now a sign beside SRT, which says ‘FOR SALE’. I strongly suspect that Airbus and Leonardo worked very hard to get the Kuwait contract. They will be licking their wounds. Kuwait going to SRT will be humiliating. This contract cements SRT as the MDA provider for the Middle East countries that are in a defence pact.
I recognise that Ocean Infinity was the only option for SRT to secure the necessary performance bond within the tight timescale being pushed by Kuwait.
What are the intentions of Ocean Infinity?
They are using SRT to access government contracts. They have a useful chunk of the Kuwait contract. More of the SRT contracts are going to include the unmanned kit that Ocean Infinity sells. There is clearly synergy, but when will Ocean Infinity launch a bid?. I suspect that £500 million would be readily available.
Do they try to pick up shares in the market or do they go straight for a bid? They know that if they start bidding there is a fair chance there will be a bidding war. Do they go for an initial high figure and hope that nobody else enters a bid. Not easy to call.
I was initially worried that if they acquired 25% they would prevent another company making a bid. However, my thoughts are that if they acquire 25% and a competitor gets 60 %, Ocean Infinity is stuffed.
‘A hostile takeover happens when an entity takes control of a company against the wishes of the company's management. A hostile takeover is an acquisition strategy requiring that the entity acquire and control more than 50% of the voting shares issued by the company.’
If a competitor acquired more than 50% of SRT by virtue of a high offer, Ocean Infinity would have few, if any, options but to sell their shareholding to the winning bidder. They would have the consolation of making a vast profit on shares bought at the incredibly low price of 35 p. (Would this be a six bagger?)
I suspect that Ocean Infinity will soon move to a public listing and the US appears more favourably than the UK. However, if they did a reverse takeover of SRT, it would avoid the due diligence and expense of a full listing. In that scenario we could end up with Ocean Infinity shares together with a cash element.
Obviously, any takeover needs the support of the SRT management team, who would be critical for the business going forward.
I might regret these next few words, but I feel very relaxed about where we are. Plenty of cash rolling in, numerous contracts in the pipeline and an interesting takeover battle between contestants with large pockets. |
Birdie
Which contract was that ? |
Will there be a bun fight by shareholders for the shares available at 35p? Will it only be for 'sophisticated investors? |
9 degrees-we are yet to see the market because there are no signed deals of note to shout about.Just the wretched VSP-aging yet not maturing over how many years.
Security and surveillance are probably more important than any other time in history, yet the take up is incredibly slow.It should be like selling PPE in a pandemic but it’s not feeling that way
As Homeboy notes, SRT have plumbed for selling the whole package-tech, system and installation.That suggests to me that Tucker is creating the market which maybe doesn’t know it needs it.
As for CM, for all his insight, the loaded questions, the imagines, the what ifs, the supposes, the one thing he missed was running out of cash again.
We await the accounts with interest as it will at least provide some hard evidence amongst the fog |
I sold out when the company lied about a contract some years ago.Told me they were still in with a shout weeks after it had been awarded to another outfit.There were other shall we say episodes when they were economical with the truth.Could not trust them after that. |
lol lavalmy,,, you had a pop at me for being some sort of shorter and yet it now seems reality is dawning on you,,, finally
this company is being sold off on the cheap because it always needs money, fixating on big contract numbers is foolish, that's just turnover,, when and if it ever arrives
as they say,,turnover is vanity,,cash is sanity,,and srt never has any
as said before, they're dealing in fairly complex international project financing, srt's skill set is product design which is outsourced for manufacture,, they have no real skills or experience in these projects and have been doing everything on a steep learning curve,,,they might command decent percentage knocking out black boxes and white labelling,, but how much can you stick on a bunch of tv screens or radars,, i doubt if they can pass on a 10% handling charge
oi will likely scoop this up at some point and it's unlikely to be at decent premium
can someone go find countryman and get him to blow the srt trumpet,,, flagging share price aint looking grand is it |
LaValmy
It sounds as if you’ve regrettably over-invested in one company.
Unfortunately our approach in the UK to placings, even for working capital for rapid growth is negative. That means businesses can’t easily go raising large amounts of equity in one go. So there’s a miserable drip drip in many cases.
The history of hype on AIM doesn’t help.
The US loves the idea of big as a result of hard work and positivity. We love the idea of getting something quickly and easily for little effort.
So becoming a consultant is rated more than being a tech. Entrepreneur. |
On the subject of valuation. Once SRT is seen to be delivering multiple contracts in these “security̶1; areas, I don’t think eps/profits will mean much for the valuation.
Because the valuation will be what other businesses are prepared to pay for it, which will be a lot higher than what pi’s would pay for the shares.
Normally its the other way around, but SRT is not a box-shifter with no moat.
The main “danger” imo is that as with many of our promising tech, shareholders cash in too early because we have no interest in building size.
We prefer to blame governments for lack of growth, while willingly shooting ourselves in the foot. |
One rather obvious question is how is company is available at such a bargain price? Over ten years ago, Peniket was copping flak on here (the previous incarnation) for having sold some shares at 40p. Now it is well done SRT if they can sell some at 35p.
If it ever begins to look like there will be a next time, I will have sold by then. I should have done so at 40p after the first Indonesian disaster, but Tucker went out of his way to meet me at Bristol airport to persuade me to stay on as a shareholder. |
Lavalmy
Can you explain the $10mln in opportunity cost comment please? |
I think the management team have done a great job to enter a marketplace that is way above the capacity of a company this size. Well done to them all and for sticking with it aginst all odds . |
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