Srt Marine Systems Share Discussion Threads

[lavalmy] 23/7/2020 13:13

FLIR was also going to sell Raymarine but has changed tack. They bought it after the financial crisis from the administrators for $21 million or 20p per share plus repayment of $160 million of debt. Prior to that Raymarine had been paying 10p a share in dividends. A swift fall, but not too surprising given the consumer orientation and type of consumer and high level of debt. SRT are right to want to pay of their debt first.

[goodapple] 23/7/2020 13:00

Time is running out for many countries to stop IUU fishing. Such are the numbers and size of vessels involved that the fish stocks they decimate may never recover.

[yumyum] 23/7/2020 12:51

They do not need to be part of SRT world. I think fisheries are an important enough area in themselves. Illegal and overfishing needs to be stopped. Urgently. SRT can help.

[countryman5] 23/7/2020 12:47

Unfortunately guns and missiles are part of the real world.saudi will always be a buyer. I understand that Flir, owner of Raymarine, sells high grade cameras and possibly radar

[lavalmy] 23/7/2020 09:33

Funny, that is what rival systems do entail, that is identifying a bad actor and taking them out. Totally unsuited for what SRT's customers want, a civilian system, monitoring fish, smuggling, security etc.

[pinkfoot2] 23/7/2020 09:14

Not sure I like the ‘way in to supply guns and missiles’ chat to be honest

[lavalmy] 23/7/2020 08:09

I can see plenty of arguments for: Brexit-proof; growing rapidly; new market; 100% export etc. But these will be equally attractive to portfolio investors. Independence and the relationships are also key assets, one of which would certainly be lost and the other hard to maintain after a change of ownership. Mind you money talks and sentiment should play no part, though of course it does.

[2vdm] 23/7/2020 07:54

Perhaps a BAE?

[countryman5] 22/7/2020 19:56

Saudi is seen as one of the world’s top defence spenders. As soon as the SRT contract is announced SRT will be talked about in Board rooms around the World. Interest rates are low and the pound is weak. The UK gov is happy for its best companies to be sold off to the highest bidder. China possibly not.

[countryman5] 22/7/2020 19:39

Lav.A very fair assessment. However, a potential purchaser will recognise all of these values. Potential bidders will be looking at a bigger picture. Just imagine that you are a manufacturer of high end cameras or radar, these contracts give you an opportunity to sell your wares at generous margins without having to compete with other suppliers. The same applies to military hardware. Having an SRT contract puts you in pole position to supply boats / guns/ missiles to provide the necessary response. There is always a time to sell. I was told ‘catch the ball when it is bouncing’

[philburt] 22/7/2020 18:54

Lav, thanks for your insights. I’m inclined to agree, and am still very comfortable with my holding in the medium to long term. I certainly won’t be divesting In the next couple of years without very solid reasons to do so.

[lavalmy] 22/7/2020 16:55

In the recent webcast, I found the discussion about other contracts interesting. Firstly, he reiterates that they are priority projects, as in the ME, and that they anticipated the budgets to be shifted to next year rather than this. That to me speaks of the Philippines where in fact they were never in the budget for this year in any case.

Next he talks of the benefits of having done the groundwork over the last few years - very important to have these things as shovel ready as possible and I would think that any competitor might have trouble getting staff in and out to do that sort of work in any reasonable timescale - so SRT is even more in poll position. Lastly he says that he thinks that some of these might move a bit quicker because some of the superfluous projects around the place have been dropped, meaning non-SRT vanity-type projects I assume, and demonstrating that SRT's are indeed priority.

Separately in the Q&A, he mentions that the Middle East projects are phases in a bigger idea in their clients' eyes and also that they work very much in partnership with them (not just in the ME). I think that therein lies the value of SRT and also the very cause of most of the lengthy period we have been waiting for results because they had to develop the system both in tandem with their clients and with reasonably rapid advances in their own technologies.

All in all, the future looks bright as he also says, but I am less and less inclined to think that they will be taken over, at least in the medium term. Too much of the value lies in those partnerships with their clients. So I am planning on just letting it run.

[goodapple] 20/7/2020 08:25

em-trak website updated as per ST's comments last week. Should boost direct sales which provide best margins to SRT.

[esteban1] 19/7/2020 18:30

I've just read an article that states Space X satellites are to be used by a company called Hawkeye 360 to track 'dark ships' ie pirates etc. Seems like Marine Domain will be the new Black....😜

[supernumerary] 15/7/2020 20:03

I thought this was interesting - points towards possible future applications for Geovis; certainly not one that I'd previously considered:

[lavalmy] 15/7/2020 15:50

But it is being touted as deep value by Mr Thompson. It all depends on what glasses you are wearing. It will be very lumpy for a while yet.

[yump] 15/7/2020 15:43

If there's a jump in earnings of 100%+ (and not from an insignificant base), this will at some point benefit from a ratings hike, multiplied by the eps.

Assuming there is still some sanity and a few serious growth share investors around, rather than a load of lottery punters.

[lavalmy] 15/7/2020 14:31

I don't follow your numbers C5. Last year's numbers look more like a p/e of 20-22 at 41p. I can't remember the number of shares nor the tax rate. Next year could produce 6-7p after tax. Assuming that other contracts are signed to make up the numbers for the years thereafter, and we might be looking at £1, p/e of 15 or so.

Edit: Just glanced at the accounts last year and a tax credit boosted the EPS to 2.43p or a p/e of 16.8. But really adjusted eps would be better as it would use a more realistic tax rate, maybe around 15%. Their tax calculation is complicated, but as they get bigger it will approach the normal rate less the patent box deduction.

[countryman5] 15/7/2020 14:14

Current figures (Previous year, see table above)) PBT £3.2, share price 41p gives PE of 16.9. If PBT £5 million, PE 24 share price would be 90 p

[lavalmy] 15/7/2020 12:28

C5

The broker is expecting to give forecasts for both this year and next once these are signed. So £30 mn and £50 mn?

I don't know about what p/e people might feel is right, but fortune does seem to be favouring SRT at long last and they might be flavour of the month when most others will be struggling, so it could well get giddy.

It was nice to hear that all four of the contracts have significant follow-on discussions.

[countryman5] 15/7/2020 11:17

The market is obviously waiting for the confirmation of the Saudi and Kuwait contracts. The broker will then have the confidence to give a forecast of T/O and PBT for this year. If T/O is predicted at £30 to £35 million and PBT £5 to £7 million, this fast growing company with a unique global footprint should be trading on a Pe in the high twenties. I understand that current broker target price is 75 p but if these figures materialise that will obviously need an upgrade. Don't dismiss the unexpected RNS 'The Company is in discussions with.... about a possible takeover'

[lavalmy] 15/7/2020 10:54

Extrader

The CBIL is due to be paid back in April next year. Any dividend would be at the earliest in respect of this current year (subject to available distributable profits) and payable round and about AGM, hence July or September next year. The loan would have no impact and cashflow from the Middle East would be reasonably strong by then, as well as all of the Imems cash having been received.

[extrader] 15/7/2020 09:51

Hi all,

I've no interest in a dividend personally (other than indirectly, in that it might bring in some new investors), if SRT has a government loan outstanding can it in fact pay a dividend ?
Or does that depend on the type of government loan ? If it's just factoring, that'd be different from the covid-related support available to business.

TIA and ATB

[lavalmy] 15/7/2020 09:11

In terms of ink on paper, if they have already lined up staff to hire, then possibly soon? At the latest before the accounts is my guess.

They must have been waiting for the cash receipt from the Philippines before hiring the new guy I spotted last week.

[lavalmy] 15/7/2020 08:51

£67 million.