Lucky we're invested here, not there, then! |
Meanwhile a horrible warning on Tan Delta today with ‘pipeline delays’ |
“Here here” - general waving of order papers in the house |
Ok I have been a small investor for over a decade (attended the 2014 AGM) and I admire Simon's persistence. I genuinely believe this is breakout time providing they have the finance skills to 'navigate' the challenges of a rapidly rising revenue curve against the backdrop of performance milestones. Astonished this has not been a PI target but hope it maintains its independence and does not become another UK victim of differential valuations. |
Recording available |
The most important comment for me was his final statement "I look forward to updates in the coming weeks"! Overall. a good summary I thought and next stop is the AGM! |
What is new? Indonesia, we have seen the recent gov communique. It is the very final paperwork, which I believe are known condition precedents, and then it is delivery. I thought the most interesting info was that the Kuwait project has started. This might be the delivery of the control centre, using kit waiting at MSN for another contract. This might allow for cash flow in December. There was mention again of systems contracts in Africa, where Tanzania might be the earliest. It is interesting that the share price was about 60p when Indonesia was announced and since then we have had Kuwait. He indicated about additional contracts for Kuwait. I still strongly believe that neighbouring Saudi will eventually want to match its neighbour Kuwait. Saudi is building this new city and holiday resort. It will need maritime security everywhere and it will want the Kuwait 'gold standard'. I look forward to the brokers note which I assume will come when Indonesia starts. |
Certainly I'd expect unbridled optimism...... |
SURELY GOOD NEWS COMING ON THURSDAY MORNING....?? |
yump
Oh yes! prof. Hannah Fry at her finest................ |
 Hi Extrader
I don't think the two are connected and I am pretty sure No10 would not issue a communique including items that were not going to happen. However, if it comes down to tea leaves try this from the broker talking about sources of finance:
'UKEF General Export Fund: Working capital requirements for the $180m Indonesian CG contract announced in May-23 (link here) is funded primarily through the UKEF GEF programme.
— Current status: The UKEF loan is a government-to-government loan and enables SRT to be paid at the delivery of agreed revenue milestones over the project length
by UKEF. The loan agreement is currently being finalised between UKEF and the SEA government with key elements already agreed prior signing in May-23. We await final agreement before implementation.
— The UKEF financing associated to the Kuwait $213m contract is a separate agreement type to the $180m SEA UKEF agreement and completion is expected on a substantially faster timescale to partially replace the $21.4m cash loan provided by Ocean Infinity.'
This is a muddle. They have not got anything yet from the GEF which is called the general export facility, but they might do. It provides essentially pre-export finance which in SRT's case will then be repaid by Santander with their lender to Indonesia hat on to Santander with their GEF provider hat on. All that once the main UKEF loan comes through which is non-recourse to SRT.
The third type of financing which they hope to get is for the bond to replace OI's guarantee. I think that is 80% of the value leaving SRT to find some $4 million.
I don't think that UKEF is involved in any other aspects of Kuwait, so any ratios or whatever to do with Indonesia (and I seriously doubt there are any given the still parlous state of SRT's balance sheet) will probably not be affected. Much more likely to do with concerns about how the contract was won given the Philippines.
Other big aspects are why do SRT pay half of the first £45 million milestone to the in country partner? Do they provide equipment for that first milestone or is it a prepayment for construction work?
More for the AGM, I think. |
Meanwhile this is an interesting problem:
Take a circle of radius 1 touching a circle of radius 2. If you roll the first circle around the second, keeping them in contact, how many revolutions does the first take to get back to its starting point ? |
This is all too complicated. I’m going to try something easier, like working out the boundary conditions of a black hole’s event horizon. |
I think that Countryman5 has Stockholm Syndrome. |
.."Imagine the UK civil service cannot provide a bond for Kuwait. Fascinating reading of the tealeaves is needed..."
Two weeks ago we were told (hat tip LaValmy) : 'We welcome the MoUs and other agreements signed between our governments today, and the associated deals reached between our businesses.''
With the continuing deafening silence about the status ('live' or 'still in the works'), I'm beginning to wonder whether SRT hasn't been able to satisfy a Condition Precedent to activation?
Could the seemingly out-of-left-field windfall of a Kuwaiti contract (Countryman5's '8 years of dithering, then out of the blue') and attendant financial implications even have come as something of a surprise to SRT (?)
How prominently did Kuwait figure in SRT's own calculations...and/or the projections it provided for UKEF's calculations? Were SRT's own bankers wrong-footed?
Is UKEF having to re-visit/re-confirm its support, if there's any concern about an 'overtrading' risk ?
Perhaps someone close to management can seek clarification on these specific points - or elicit an alternative explanation for what is an increasingly untenable situation : if there's something/anything amiss, ALL shareholders need to be told.
AFAICS
GLA |
We are now in 2024. You say that these 200m-250m of sales will take place between 1 July 2026 and June 2027. Unfortunately, it is 18 months until the start of July 2026. Perhaps we should revisit this at that point ! And hope, that in the meantime, the other 'imminent' , this calendar year, etc, projects actually start and can be funded, otherwise SRT will not be independent by July 2026. |
I don’t know what’s going to happen and when.
What constitutes the “start” of a contract ? |
The recent RNS states ‘SRT now enters the new financial year with a runway of £320m of system projects that we expect to implement over the next two years, a further pipeline worth up to £1.2bn of prospects’.
I am predicting that the year ending June 2027 will deliver between £200 and £250 million of systems sales. I am assuming a profit margin of 28%, after allowing for a major slice of company overheads. The remaining overheads, if any, will be more than covered by transceivers with PBT coming in between £60 and £75 million. This assumes that SRT is still an independent company and has not been swallowed up by Ocean Infinity, Airbus, Leonardo, EDGE, or one of the other global defence contractors. Buy or sell? Take advice from Oliver Plunkett, who gets a vote of confidence. |
Speculation...might...imagine....SRT fail to perform well their Kuwait contract. Imagine the Saudi contract does not happen (contract....?? please look back at prior rather smelly RNSs). Imagine Indonesia is stalled somehow (it is already stalled in case you did not notice). Imagine Bahrain decide to wait a year or two. Imagine Tanzania has no money (they do not have any). Imagine the UK civil service cannot provide a bond for Kuwait. Fascinating reading of the tealeaves is needed. Oliver as new CEO would certainly get my vote. |
Kuwait is an interesting contract. Earlier contracts had the various countries dragging their feet. However, Kuwait appears to be the complete opposite. After about eight years of dithering, it was suddenly all systems go. Suppose Kuwait says to SRT, 'We have our control room ready, when can you deliver the data centre?' SRT might say 'If you provide the air freight, we can deliver in three days'. This is obviously mere speculation, but perhaps kit waiting at MSN could be redirected to Kuwait. Kuwait would / should be impressed and SRT would receive an early delivery of cash, including high margin software. It might even appear in the half year figures!!. Might this allow for the early repayment of much of the performance bond? I am assuming / hoping that shareholders will get an early Christmas present in the form of a brokers note depicting T/O and PBT for this year and next. It will make fascinating reading and forecasts will be conservative, being underpinned by signed contracts |
I agree with LAV that the long awaited brokers note will give a detailed T/O and PBT for the year end June 2025 and also the following year. The figures will be totally underwritten by the commencement of Kuwait, already started?, Bahrain, Saudi and Indonesia. Serious money. There will be room for uplift from further contract signings. (Kuwait, Saudi, Philippines (fishing and PCG) and Tanzania?) Obviously DAS and Nexus are wild cards. I assume brokers note requires final agreement of wording for Saudi and Indonesia. Will we get a breakdown of £1.2 billion of pipeline contracts? |
Of course, they haven't got a forecast at the moment and haven't had much from the broker for a while. I think that is one of the reasons why they didn't stand a chance of raising money from new investors. One of the others is the constant missing of all forecasts over a very long time and by enormous margins.
I suspect that will change soon and that they will meet their next year's forecast (okay only six months of forecast) and the following one, which may put them in better standing with the market - from the current doghouse to a market darling selling into a new and growing area is not to be ruled out. The combination of actual performance and rerating could be potent. |
I sold some (again) shares today.
I have sold a few in the last few weeks. Hard to see where the traction is. Forecasts from SRT are not worth anything but on the other hand it is a tricky government market that they are in. I am still basically holding and hoping. |
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