Srt Marine Systems Share Discussion Threads

[pinkfoot2] 07/9/2020 12:38

As I said, all in the future here.Hopefully the Kuwait issue will be a timely reminder to book revenue when backed with some hard cash.Waiting over 3 years for nothing is stretching it somewhat.

[goodapple] 07/9/2020 12:33

Only a month until the AGM (and H1 figures). Surely we can get one of these contracts signed before then.
Surely?

[lavalmy] 07/9/2020 12:28

C5

The VSP hasn't gone up though, has it? It has been pretty much the same for a couple of years.

The environmental side does look promising.

[pugugly] 07/9/2020 12:22

LaValmy_10225- Very fair take - Thanks for your insight especially re "impairment"

[countryman5] 07/9/2020 12:16

Everything as expected , except the Kuwait deferral news. Sceptics focus on the VSOP. This figure has to be substantiated by accountants, NOMAD and company solicitor before being published. It is a moving feast and some drop out, primarily due to budget restraints and some have an increased value. Quote 'This is partially reflected in the increase in the validated sales
opportunity pipeline (VSP) for our systems business which
includes 17 new system opportunities with an aggregate value
of approximately GBP550 million as of 3(rd) September 2020.
Each is at a different phase and status in the sales process.
These include opportunities with entirely new customers as
well as new contracts with existing customers. To qualify
for inclusion in our VSP, opportunities must meet a range
of criteria which include active engagement with our sales
team around a defined proposal, confirmation that the customer
has taken a formal decision to implement such a project and
budget is available, that necessary supporting local laws
and regulations such as requirement to fit transceivers is
either in place or underway and finally that discussions are
making regular progress within some form of timescale which
expects commencement within a 3 year time horizon. However,
the nature of large projects and government procurement processes
means that it is impossible to accurately forecast exact timescales.'
I am also expecting the launch of the 'Environmental Systems' which will be a turn key option for ports and waterways. This will be based on ATONS mounted on marker buoys and I believe this will become a major leg for the business going forward. The elephant in the room is the inevitable takeover attempts but there are large shareholders here who are in no hurry to sell.

[lavalmy] 07/9/2020 12:09

Finncap's take on the Kuwait situation:

'We are reassured this impairment is a prudent clearing of the decks by SRT rather than any significant contract issue.

We understand the customer originally wanted one contract for the monitoring system (signed in 2017) and a second contract for vessel transceivers once the laws were in place to enforce deployment onto private and commercial boats.

The first contract was paused by mutual agreement to allow that to happen but it has taken several years. The laws are now enacted and during Q4 2020 the customer received final approval to proceed with the purchase of transceivers but the pandemic then delayed things until August and the customer advised that they may prefer to cancel the existing contract and replace it with a single contract for both monitoring system and transceivers.

SRT seems happy with either option but it might need to cancel the existing contract (and invoices raised to date) in order to then proceed under a single contract. To be prudent the Board decided to impair it to clear the way for the new contract.
This is just an accounting adjustment and we expect the impaired revenue to return this year with the new contract.'

That doesn't feel right to me. What about the equipment allegedly sent out to the local partner? Anyway we will see, but given the difficult position of Kuwait's budget, as posted the other day by AE, it would be sensible to be prudent about this and any further business with Kuwait.

Edit: Also revenue is never impaired. Assets, including recivables, can be. The same revenues must not 'return this year with the new contract' either.

On the near term:

'Management is confident (underpinned by written assurance after three years of work) that the contracts will be signed as the coronavirus crisis eases. These contracts could see FY 2021 revenue exceed £50m with Adj. PBT in double figures.'

[pinkfoot2] 07/9/2020 10:22

Well they have cleared up the 2017 debtor which is a positive for me.The loan breach a new one but at least rectified by the cash raise.

All about the future!

[2vdm] 07/9/2020 09:55

Surely, given that we are waiting for contracts to be signed (hopefully soon), any fall presents a buying opportunity for the faithful?

[pugugly] 07/9/2020 07:51

Loss before tax and exceptional item of £3.0m (excluding one-off impairment charge on Middle Eastern project of £3.9m) So overall loss £6.9m.

Management (imo) must really learn to negotiate smarter - Trust they have learnt their lessons from this debacle.

Edited at 8:32 - Down 12% Mr Market seems very unhappy with results - Wonder how much further this can fall?

[michaelmouse] 07/9/2020 07:44

Final results better than guidance with revenues at £18.9m (guidance £17.5m) and loss of £3m (guidance loss £3.8m). Main thing is a comfortable cash position and "a much better year ahead".

[countryman5] 02/9/2020 18:15

Jan 2019 Bangladesh Sustainable Coastal and Marine Fisheries. SCMFP. Gov received 240 million US Dollars from World Bank. GD2. Supply and installation of VMS including transponders, hardware and software. GD 3 Supply of VMS station. GD 6 supply of AIS for 10,000 motorised artisanal boats

[lavalmy] 02/9/2020 15:26

Monday, they are due. The auditor is never happy at the best of times, so I expect the usual from him, shrugged off by the directors. I doubt that they will make any provision for Kuwait as they will have to hand further and this time better confirmation that it is going ahead. Saudi will be a big stock/WIP amount and the Philippines a large receivable, a good chunk of which has been received. Expect the usual going concern emphasis, but water of a duck's back for SRT and its shareholders. Many more companies will be getting this sort of commentary and it might come as a shock to them. Us, no.

The chairman's statement is really the only thing of interest and there I expect the usual confidence. Resilience, priority projects, phases in a bigger picture, jolly good performance in the core etc, as well much of the legwork done for future contracts, reducing the impact of current travel restrictions on the further development of the business.

[countryman5] 02/9/2020 15:14

World Bank seems to be shovelling vast amounts of money into sustainable fisheries around the globe. Might some of it end up at MSN?

[pinkfoot2] 02/9/2020 14:32

Not me but the auditors might be a bit shirty.

SRT should have plenty of cash at the moment so more likely accounting cosmetics to me but in the real world, I would expect material cash within a few months of recognising revenue, not 3 years plus.

Accounts due soon from memory and ST seems bullish enough-even with the ongoing virus issues

[alter ego] 02/9/2020 12:42

Interesting article on Bloomberg today about Kuwait having run out of liquid assets and being unable to cover its budget deficit.

Will probably make Pinkfoot upset again about outstanding debt.

[alter ego] 02/9/2020 12:37

La V, you are as good as anyone at ferreting out snippets of information that help fill in the gaps but SRT's secretive customers make it very difficult to peer behind the screen. Covid has simply added another layer of fog to the view we have.
I'm surprised however that we haven't seen anything on that tender as you would expect it to be in the public domain even if SRT's bid isn't.

Please keep up the excellent work.

[lavalmy] 02/9/2020 11:44

A headline about the US$ weakening by 10% got me thinking, so I checked. SRT's announcement on March 10th about the delayed contracts worth £65 million was just before the dollar's steep rise (from 1.30 to 1.15). So this fall just brings it back to where it was, give or take. The PHP tracks the US$ pretty much.

Another thing has been bugging me is about geography. In a previous webcast, there was talk of a country issuing a tender some months before it was expected. AE poked around and came up with Sri Lanka. More recently, mention has been made about progress in Mid Asia? Would that tally?

It looks like Saudi will be resuming flights on 1 October, although no mention has yet been made of non-residents being permitted to arrive.

[yumyum] 30/8/2020 22:35

Thank you Piedro. Bit wishy washy ? How to...is...er.... what ?

[piedro] 30/8/2020 11:49

FWIW,

How to Protect Galapagos Marine Life from the Chinese Fishing Fleet
BY SARAH RYAN ENRIGHT 08-28-2020 07:41:00

[lavalmy] 29/8/2020 14:02

The Saudis have had a new dashboard website for a week or so, here:



The daily infection rate has been coming down steadily and has just hit a figure below 1,000. There might be a small weekend effect, as the number of tests seems less than on previous days from memory. But the 1,000 a day threshhold had been mentioned as a target to reach before restarting international flights.

[lavalmy] 26/8/2020 12:07

C5

I think the transponders are being installed as we speak, port by port, for the 5,000 vessels covered by this phase.

As for the other fishing boats, I have heard numbers of 90,000 for Phase 3. This would include only fishing boats, the other vessels coming under a different Ministry (and project name) but probably using the same coast stations.

When you look at it, the system is costing over £6,000 per boat if only the 5,000 are involved. Put another way, less than 40 boats per coast station and with those boats mainly expected to be far out to sea. That would be a crazy cost and design if they were intending to stop at 5,000. And as we saw, they are intending to track nearly all mechanised boats in the 10 years from last year.

[countryman5] 26/8/2020 11:38

Clearly LAV has a good handle on the Philippines budget. My understanding is that the delivery milestones and the payment milestones are separate. My understanding is that Philo /IMEMS 3 will be for the rolling out of an enormous number of identifiers onto the smaller boats. Clearly budgets are being refocused because of COVID but at some stage there will hopefully be a cash allocation to a Philippines coastguard project. When the SRT partner gets clearance the IMEMS 2 identifiers (photo in gallery) will be installed on the larger fishing boats. This will allow the system to go live so that the EU and Philippines neighbours can view the working system. This will hopefully be the trigger for the likes of Vietnmam to commit.

[lavalmy] 26/8/2020 10:18

There is in the Philippines budget an amount of c. £4 million due to be paid for IMEMS in 2021, which presumably is the balance of the project. All the rest was expected to have been paid this calendar year, though there may well be some delay in hitting milestones. So, whatever the large receivables balance was as at 31 March, that and more should be received this calendar year and maybe Q1 next. The accounts should help to clarify amounts when we get them Monday week.

I suspect that they wanted to have signed some of the ME contracts before then to reduce issues with the auditor - I note in passing that PwC have delayed their own accounts - maybe they had enough visibility on the timing of those when they issued the trading statement.

[lavalmy] 25/8/2020 12:07

Mid September it sounds like for Heathrow. No news about quarantine etc on arrival and I assume Saudi is on the UK red list.

Separately, the Philippines budget has been sent to Congress. The Department of Agricuture doesn't seem to have received its hugely inflated bucket list increase. It sounds unlikely that Philo 3 is in for 2021. The other large project may well be (Coast Guard, Dept of Transportation?). No details are available yet, but should be in a week or two. They are hoping to have the budget approved by both houses by end November.