Thanks for your notes - I think its pretty important to have things represented reasonably accurately. |
 Countryman - On the point "HOWEVER, OI wants to eat SRT as soon as possible (despite saying in public that it would wait two years!.)"
This may well turn out to be true but I assume it's a personal opinion?
How OP responded during the meeting to the question do you want to buy SRT was (according to my notes):
"No, I would feel quite ill, as in 2021 we bought 3 companies and I still feel stressed about it. Our investment in SRT was for two reasons. Collecting marine data and for SRT to visualise it for customers/coastguards. There are so many companies interested in this data. It's about creating the relationship with SRT so that we can more easily put a proposition together to take to (potential) customers as we have done recently. The second piece, is that we think there is value in being a shareholder in SRT. Hopefully, the market pricing will catch up and SRT will be a really good investment. I put a chunk of my money into SRT and I can see what other listed investments have achieved in terms of share price growth. Today there is no plan for us to buy/consume SRT. I'm not going to tell you that in two years time we won't think about the world differently but who knows what is happening. Today, we like the relationship, we like the position we are in and we can help each other....." |
Good to meet up with you again Owen and thanks for adding some really useful information to the collective knowledge. |
ST did state at the end of the presentation I think during Q&A that revenue payments were coming in and cash and they wouldn't need to raise. Important to hear that.
Also, looking to target ROCE of 25% and growth rate of 20% P.A..... That gives a flavour of where their profitability will sit.
Gross margins on projects in the 20's up to 30%
Margins on AIS side including X100 in the 40 - 45% region, with AtoN sitting as an outlier at 80%
DAS as a standalone business is ongoing, with port authority demands seen as a growth area, Louise has a lot of input in developing a package of items including a kind of Geovs approach to utilising the data, this seems to be shaping up to be an area of project activity rather than just selling a few AtoNs.
OP from OI is impressed by what SRT have actually built from scratch, enough obviously to take a stake including punting his own money, there are synergies between the two companies and the ground work that SRT have done seems to open doors for OI to be involved, also, OI are a data centric company and thus have a natural fit to SRT's Geovs core offering.
OI's stake and board position in SRT seem to be a really interesting part of this journey.
To outsiders, SRT has been a serial disappointment, however, SRT now has multiple projects running - currently over $200m - and is now in a different financial situation, the wider market is not up to speed with the situation here.
OI came up with 21m to fund the Kuwait bond, everything moved at such speed - unlike the usual historic SRT government signing grind - that SRT were unable to raise the money elsewhere in the time scale. Kudos to OI for the support, the UK gov. really doesn't have the vision or nimbleness to support these companies, a lot of noises and little action. Without OI stepping up, I'm not sure that Kuwait would've been lost, but it sounds like a massive delay would've occurred.
It feels like Kuwait is quite a showcase project and SRT's reputation could possibly have taken a dent if it had not proceeded at the required customer pace. Think this project is going to showcase SRT and so is critical.
Countryman bangs on about all things SRT like he's their PR guy - good for him and good to meet up with him again - he's often said about others looking in on Kuwait and wanting to keep pace with what they have, actually, it's sounding like he's on the money here.
In my view, the next catalyst for the share price is likely to be Indo spades digging the ground, think the market is going to start waking up especially when the brokers note is out with a couple of years of hard figures and over $300m of contracts under way. Estimates are for broker note issued in Feb. therefore Indo likely to get UKEF finalised within late Jan. early Feb. - we shall see.
Slow roll out on X100, they really want to get this right and so are widening the beta testing pool in the real world marine environment to make sure all works well, good to meet the project guy behind this and access the thinking wrt quality etc.
Personally, I don't think SRT are jam tomorrow anymore, I told Oliver about the pots of jam on seats at a past AGM, he thought it was hilarious.
Great day out, good to meet the SRT team and shareholders again, thanks to AE for his excellent write up, just my two penneth worth. |
They must have had a lot of applicants today - Linkedin now only showing 7 posts available.
It must be something to do with the stormy weather! |
Blimey - hope thats not the next issue. That would be one of every issue you could possibly have overvthe years, wouldn’t it ? |
Linkedin currently showing 27 job openings at SRT. The search for talented new staff continues. |
rubberduck - thanks - I missed it - right down at the bottom of the directorate change notice:
'Mr Plunkett owns 425,000 Ordinary Shares in the Company in a personal capacity, representing 0.17 per cent of the Issued Share Capital following admission of the new Ordinary Shares as announced on 14 November 2024.' |
OP this morning deciding how to win SRT??!! Quite bizarre nonsense.
Someone needs to go into writing movie scripts.
The truth is that I have raided my wife’s piggy bank and am planning a hostile bid.
There we are, another piece of fictional imaginary facts and unsubstantiated musing. |
Thanks guys esp ae and C5 for filling us in about the AGM and especially the feel of the place. I hope to some day attend as I'd love this to stay independent and become a unicorn. |
Sharepad shows Oliver Plunkett holding 425k shares dated 2/12/24 |
I don't remember reading of a holding for Plunkett? I'm assuming that even if he bought them before being appointed to the board, he would have to declare when he became a pdmr? We have to assume that he and OI would be a concert party in any negotiations, and therefore his personal holding is of interest to shareholders.
PS thanks all for interesting reports!
PPS ref mention of China - this is an interesting backgrounder. Seems they may take the loss of soft power caused by intrusive fishing seriously after all. Perhaps srt should sell them a system for reporting catches? |
Observations
- There is no cost escalation clause in their contracts but SRT is relaxed about this as costs have not risen significantly and the have 'contingencies'
- SRT are justifiably angry about the ECGD response times - come on UK Gov if growth is your main objective get this sorted
- Recruitment is an issue. There has to be a better way than Linkedin
- Bullish sentiments in all areas including X100
- For next AGM can we have a roving mike as difficult to hear the questions
- OI.As I have been here for a long time I asked Oliver about his intentions towards my daughter. All I really got was no immediate plans but realistically they have almost a blocking stake.
- subsea looks like a growth area and this is where SRT's ability to link sensor info together is the golden nugget. The GeoVS acquisition was a game changer
Lots of other stuff but well covered by alterego and countryman |
OI might well prefer to wait, in case SRT cannot reorganise the PB in time. Then OI can get more cheap shares - as per the existing agreement.
Thank you all for the AGM feedback. |
AGM. Random thoughts.
Good turnout, About 50 (excited) shareholders. ST in top form. New NED Oliver Plunkett, CEO Ocean Infinity, was there.
He was surprised at the numbers in attendance. I suspect that he was even shocked by what he saw. He is obviously bright and there appears to be good chemistry between SRT and OI at all levels. HOWEVER, OI wants to eat SRT as soon as possible (despite saying in public that it would wait two years!.) OI has a problem. In effect it has set SRT free. Kuwait has given SRT the cash flow and credibility, which SRT desperately needed. A year ago, nobody was talking about Kuwait. The first stage is now up and running and Kuwait is VERY pleased. SRT and OI kit will be its new toy, its pride and joy. Kuwait likes to boast about things and Saudi is in the firing line. ST was giving hints about the potential of Saudi spend. I am expecting serious numbers (Four or five times Kuwait spend and Kuwait has only just started). O P admitted that SRT does not have a competitor, unless it is in China somewhere and he knows the enormity of the potential market. Oliver Plunkett said that he had bought SRT shares on his own personal account.
How is OI going to capture SRT, together with the management team? The longer he leaves it, the more it is going to cost. I believe Macbeth said ‘If it were done when ’tis done, then ’twere well It were done quickly’. I think that Mr T knows he does not need to do a deal, any time yet.
The long awaited Brokers note is still awaiting the start of Indonesia. Did anyone hear the potential size of the Indonesian fisheries? I believe it started with a five, and it was not $50 million. We have no serious institutions on the shareholder register but the brokers note will probably make some desperate for a slice. OI and institutions face the same problem, where can they buy shares? In the unlikely event that SRT needed more funding, there will be a queue of potential buyers at well over a pound. I suspect that this morning Oliver Plunkett is trying to decide how to win SRT. Good luck with that one. Every day that you leave it, SRT gets further away. |
Hi alter ego - Thanks for this - made me feel like I was there (geddit?);->
.."They even have a mobile control “room”, a van full of servers that can collect data from remote locations and feed it into the system until more permanent arrangements are put in place..."
This bit (echos of Terratrucks blanketing Los Angeles suburbs, providing temporary, mobile hotspots) and later reference to use of StarLink makes me wonder whether SRT shouldn't invite 'playmate of the month' Elon to take a small stake...?
Thanks again
ATB |
alter ego,
Thank you for your excellent post.
As always, you are usually first out of the blocks :-) |
Thanks AE very much appreciate you taking the time to update us |
A quick addendum - Most of us know that ST (not SRT) was accused of some corrupt behaviour in relation to the contract in Philippines. it is assumed that this allegation was politically motivated involving large fishing companies who had enough influence over the ombudsman (with family connections to the fishing firms). St has always refuted these allegations and said he is now asking for the facts to be examined by a court as they are false. We have to wait an watch this space but it clearly rankles ST who won't go there until it's settled. |
Thank you for this. Very much appreciated. |
Just arrived home from the AGM. As ever it was very informative and certainly worth the effort folk made to attend. One person I spoke to said he thought SRT were very unusual in allowing shareholders unfettered access to employees to ask whatever they wished. Answers whilst avoiding sensitive information were genuinely useful in forming a view on how things are going. It was good to put faces to some of the names here and I think I persuaded a lady from Cambridge that joining ADVFN would improve her knowledge of SRT more than the message board she was using. Please excuse any inaccuracies in what follows but I have tried to recall as much of what was said as possible from hasty jottings. Anyone else who attended is welcome to add to or correct what I have said.
I started by trying to find out more about the launch of the X100 (Nexus). Initially it will be an EmTrak product hence X100 not Nexus. In time OEM’s are anticipated to include it in their offering but the strategy is to get a substantial user base who think it is a marvellous product. Marketing is planned via 5000 or so dealers so SRT will ensure they know what the X100 can do and they will have their own customer base into which it will be sold. Sound quality has been a top priority in the development of this product to ensure it performs better than anything else on the market. The actual product is constantly being tested by a small cohort of real boat owners who supply SRT with feedback on a weekly basis which allows for tweeks if there’s anything they would like to see done differently. The X100 has inbuilt MOB (Man Overboard) unlike rival products which tend to be standalone and often not used because it’s too inconvenient. Software updates are simply done by feeding the update to the mobile phone or watch and then to the Transceiver as soon as they connect.
Early feedback is that users love the convenience of the connectivity and the ability to use the radio via their ‘phone or smart watch without any delay. The overwhelming impression I got was that SRT are very pleased with the market response, eg at METS, and the volume of pre-orders exceeding expectations. I was told more than once that there is nothing on the market that can match it. A very limited production run has begun and is expected to ramp up gradually once everyone is confident that the user feedback will be highly positive. They do not want any disappointment hence the controlled, cautious early production.
Kuwait required pretty much immediate mobilisation and staff were called upon to work over the Christmas period to meet customer expectations. ST said he met no pushback to this request which demonstrates to me the commitment and unity of staff to the collective goal. The customer was very impressed and this has boosted SRT’s reputation in the region. Some existing structures are having to be used for control centres and towers because they exist not because they are ideal. Building new ones takes time but this approach gets things up and running earlier. They even have a mobile control “room”, a van full of servers that can collect data from remote locations and feed it into the system until more permanent arrangements are put in place. OI will provide underwater and surface level autonomous vessels/drones. With the advent of drones and unmanned aircraft decisons will have to be made about how high surveillance needs to go. Oliver stated that the sea is a very challenging environment for this equipment and the customer needs to understand that things may not work perfectly from day 1one Internet provision is less than ideal and there is no broadband as we know it at present. Satellite communication may be needed, eg Starlink. Clearly Kuwait is at the start of a journey which will take years to travel.
I asked about Indonesia and EKEF financing. The loan has been agreed in principle with Banco Santander (in Spain) providing the money. It will be released in stages as SRT raise invoices for each delivery milestone. I got the impression that we are just weeks away from the start of the project but everyone here has learned to wait for the confirmation rather than the expectation. The question of the effect of inflation on the fixed project cost was raised. SRT build in a contingency to costs which mitigates this. It is also the case that much of the Dell servers and desktops were acquired earlier and at lower prices. It was estimated that roughly 40% of the total project cost is shielded in this way and ST thought that the contingency allowance would suffice.
It was said that Indonesia are already talking about what they would want in the future as there is no Fisheries component in the project that has been approved. This underlines how, once a customer buys the system, it is normal for it to expand and evolve over many years.
I raised the question of staffing needs as they have a long list of positions to fill. ST and Neil agreed that it is difficult to find the right people and have already employed a recruitment specialist with another needed to seek out candidates for the vacancies. Conventional recruitment agencies do not have the same focus. LinkedIn is where they expect to find the people they need.
Countries are beginning to realise that they need what SRT can supply. Bahrain has suffered from depletion of fish stocks and because it has no means of regulating where and what can be fished it has imposed a blanket ban on fishing.
In Saudi they are intent on creating an environment that attracts tourists under Project NEOM on the Red Sea (Dubai on Steroids was quipped). Here security, safety , water quality, fish and reef health are vital and SRT can enable the customer to achieve what they need. Proximity to Yemen, Somalia, Syria and Iraq presents risk that will have to be managed by KSA.
OI were represented by Oliver Plunkett CEO of OI and our newest NED. Some investors enquired about the relationship between the two companies and the answers were reassuring from my point of view. At the most fundamental level OI can supply data that SRT currently doesn’t have but GeoVis can make sense of that data and present it to the customer, something OI cannot do on their own. That looks like a very symbiotic relationship to me where both parties see value added. Both companies have very similar cultures seeking to collaborate to make things happen. Each is pragmatic about how costs and profits should be divided. In the longer term Oliver said OI had not sought to enter into this relationship in order to take over SRT. Nevertheless, he was clear that things can change. ST expressed the hope that SRT would remain an independent company in 20 years time although he wouldn’t be its CEO. I took away the strong impression that there is no tension between these two entities.
In reviewing future project opportunities ST was confident that SRT will be spoiled for choice given the rapidly dawning appreciation that countries need data to be able to manage their MDA.
Someone asked about DAS and ST said that it was part of what SRT offered and would enable autonomous shipping on rivers to know if there was enough room to pass under a bridge or enough depth to avoid grounding. At sea it would warn ships of the state of the tide and currents so course corrections could be taken. Margins on the equipment are very high.
Thanks to everyone who made this visit enjoyable. I look forward to the next one. |
A rise in the morning is ALWAYS a good sign.
I'll get my coat...
ATB |
Assuming many attendees already have a not insubstantial committment in shares and a level of frustration, perhaps a rise in the morning would be a good sign. |
Like eagle eye, circumstances have proved awkward for attending today's event but I eagerly await the reports thereon.
In particular, was there any contact with our new big shareholder, OI that could give a possible feel for the depth of their involvement? |
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