Apart from pld's very legitimate question it can also be noted that GBP-USD exchange has fluctuated between $1.09 and $1.34 in the period from Sept 2022 to the present.
The contracts can include costs in a mixture of currencies, eg groundwork (in local?), electronic components (probably usd), assembly (perhaps Euro) and design/specification (possibly GBP). One wonders how a firm price/margin can ever be arrived at.
The truth, I suspect, is that it isn't.
Given this mix plus the apparent over-optimism of SRT over time-scales (I might say naivety if I didn't wish to avoid being rude) it is not surprising that the market views SRT with strong dose of scepticism.
Very substantial companies have got into serious trouble with large contracts that turned sour. SRT's survival right since the early days when it hit a low of ~2p (I hold some bought at 2.5p) has been against the odds ... which is one of its attractions, I suppose. |
 Many thanks SJ for your support. Yump, I'm all the more baffled at your apparently hostile attitude given that we're supposedly "on the same side" - I hold a sizeable number of SRT shares and have no intention of selling at anywhere near present levels - and given that my question was (with no disrespect) entirely reasonable and sensible.
It is not "nonsense guesswork" [sic] to state, as a statement of fact, that the figure of $180 million has remained unchanged since May 2023 in all comment coming out of SRT and its brokers. Meanwhile, and in general terms, the costs of sale are clearly likely to have increased. I fully accept that none of us can be more specific than that, but it remains a thoroughly fair generalisation. It's fair too to add that the strength of the dollar will increase the value of the contract in sterling, but even that must be weighed against the extra cost of non-sterling outgoings. To make that observation does not require knowledge of specifics.
Your attitude is uncalled-for: a bit more courtesy would be appreciated.
Edit - In their note of 27.12.24, just two weeks ago, Cavendish - SRT's NOMAD and broker - wrote this. Note the unchanged numbers.
" We look forward to further updates for two additional contracts ($180m Indonesia and c.£40m ME phase 2/3) currently expected to commence implementation by June 2025." |
Yump.The question raised by pld was valid unless You think inflation is negative!! Hopefully for shareholders the contract has been renegotiated to allow for this.
Edit - The same argument re profit margin errosion by cost inflation also applies to Saudi given that was originally signed 3 years ago with a short completion timescale and then paused?
Exchange rates also a potential issue but could be positive or negative as both contract income and costs in various currencies over different timescales. |
Has anyone here actually run a contract business and also read how SRT goes about procurement, product stocking etc. etc ?
I don't see why I should be nicey nicey, when nonsense guesswork is posted. |
Pld You are right to flag this as potentially serious issue. Inflation likely to be 10%+ so with margin at 20%+ that could be a 50% hit to profit!
Don't post often so HNY everyone and Yump... please try to be nice! |
pld - I suspect the information you're asking for would be regarded as commercially sensitive - not many companies provide that level of detail about their contracts as it would only feed into other later negotiations, not necessarily to the company's benefit. |
You said the profit margin must be fairly negligible by now, if inflation isn’t built into pricing.
Expect to be challenged on that if you don’t post any backup.
The inflation question applies to every businesses, but its effect on profits obviously varies depending on margin, on time of product spend, shipping rates, etc etc etc.
Even if inflation wasn’t built in, your “negligible221; assumes the whole project cost gets inflated and the whole margin is equal to the inflation increase. |
yump - whatever makes you think that? Misplaced sarcasm does you no credit. On the contrary, I have no idea, and I don't suppose you or any of us do either. Indeed, that's the whole point. The contract was quoted in the May 2023 RNS as being for $180m; so far as I am aware there has been no subsequent announcement on price, but IIRC (and I'm open to correction here) it was still being included at $180m in the 23.12.24 presentation, when I'd have expected the value to have risen to nearer $190m or even higher if inflation was properly built in.
Moreover, the figure of $180m was again mentioned in Cavendish's Oct 24 broker's note, and in numerous posts on this board by LaValmy, Countryman5, alter ego and others. See e.g. La Valmy at #15368 (7.12.24). So, to repeat: is an appropriate mechanism built in to the contract to reflect inflation and/or the time value of money - and either way, why has this not been made clear? |
You know their costs, margin and inflation on products and services not already bought then? |
I have a query about the $180m MDA contract announced in May 2023, now getting on for two years ago [it seems common knowledge that it's for Indonesia, but evidently we're supposed to play the charade of not mentioning that officially, as silly as that is] and which has apparently still not commenced even now.
Does anyone know whether there is an inflation factor or similar built into the price to compensate for the delays? If not, the profit margin will by now be getting fairly negligible. In case of uncertainty, is the question one worth raising at the AGM? |
It's the markets they operate in :¬(
Worth remembering though that Kuwait went the other way - no pre-announcement, no long-drawn-out negotiations and contract faffing, just pretty much direct to delivery. |
Thanks, LaV.
EDIT: Going back through the RNS history, the contract award was actually announced exactly three years ago. At the time, they said that all three phases should be completed in two years.
"The award is for the first of three phases of a project worth a gross total of £40 million. The phases are scheduled to be implemented serially, one after the other, over a total period of two years".
Plus ca change. |
Effortless
It is Saudi. They signed the 'contract' yonks ago but were waiting on this NTP. Whatever documentation formalities there are will be detailed timing, serial numbers of equipment and suchlike not the actual contract. |
I've lost track - does anyone know what country this phase 2 contract relates to?
Regarding the timing of the announcement, the requirement appears to be triggered by receiving "formal notice to proceed". Quite why this would be received ahead of "final documentation formalities", I don't know, but I assume it gives a level of certainty to the contractual commitment that makes it price sensitive information requiring an RNS. |
I get your point Techno20 but for the sake of less than 4 weeks (due to be signed by end Jan) then doesn't seem much of a difference, apart from the AGM possibly happening before the signing/start date.
Maybe it's just a choice they've made to release the news as soon as it occurs, even if not fully completed. Seems to be fairly consistent over time. |
ST must tear his hair out reading the comments on here. Slated for not announcing deals, slated for announcing them. I for one appreciate the fact that SRT / ST tries to keep shareholders informed, even if ink isn’t on the contract. I’d far prefer that than radio silence. The fact that SRT worked over the break to release two RNS’s when most were still in their Christmas / new year stupor is also testament to the hard work the team puts in. Massive progress has been made in the last 12 months and the business looks set for a mammoth year ahead. SRT is turning into a global success story for the UK, so let’s focus on that! |
Positive but why does the company release this news prior to the contract actually being finalised? Is it for fear that the news makes it out via other means or just in a rush to release something positive? Seems like any delays in the finalisation process will impact them later on down the line news-wise. |
Yumyum - today's news may help in that regard
$320m forward order book too |
Late Oct SRT webcast ''...we are very focussed on those 4, and getting everything in place....as the start of those 4, ALL of them, start WELL before the end of the calendar year'' (my capitals for emphasis).
....now it seems there will be only two? started before Jan 1st, Nothing really changes with this company does it? Pathetic and embarrassing still. |
A little bit off topic but not too much ...
Port of Rio Grande Invests R$ 16.5 Million in New Navigation System
Jan, 02, 2025 Posted by Denise Vilera
An investment of R$ 16.5 million aims to integrate vessel traffic control at the Port of Rio Grande, one of Brazil’s key logistics hubs. Implementing the Vessel Traffic Service (VTS) system, led by the Rio Grande do Sul Maritime Local Productive Arrangement Association (APL) in partnership with Portos RS, seeks to enhance efficiency and safety in port operations. ... ...
Following on, I find that there is an English company who trains the operators {worldwide}
AFS Consultants specialise in the provision of high quality training to the maritime industry with an emphasis on all aspects of Port and IALA V103 Vessel Traffic Service (VTS) training.
About: Vessel Traffic Service (VTS)
Any relationship with SRT? |
Presumably just two of the contracts have started? Please advise. Anyone know? |
was it this one? (for Aerial Surveillance)
hxxps://ukdefencejournal.org.uk/uk-seeks-commercial-aerial-surveillance-for-maritime-security/
hxxps://bidstats.uk/tenders/2024/W38/831062190 |
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