A £1 is not enough! Where have I heard that said before! |
My understanding is that Leonardo and Airbus missed out on Kuwait. What does Ocean Infinity want from SRT? It is clearly in pole position, if it wants SRT as a subsidiary, but there are some substantial shareholders to win over. At the end of the day, nearly all countries will deal with global defence companies, even Israeli ones. Would the UK gov seek to limit potential candidates?
If I was looking to capture SRT, I would launch a hostile bid on Thursday.(Why wait any longer?) Catch the board off guard and gain maximum publicity. A bid of £1 would probably land 15% of the shares. The bidder could then use that as a further launch pad, or else sell at a profit to the eventual bidder.
Simon is of the opinion that this BB is widely read across the world! |
Good post, Countryman.
The key issue for me would be : who could buy SRT without risking alienating/scaring off a lot of its potential (and maybe existing?) customer base?
Indonesia and the Philippines might be OK with a US buyer , but the Gulfies and others?
A French buyer? A German or Spanish buyer ? Chinese or Russian ?
You get the point....
Maybe a neutral multilateral that was IFF-focussed?
An interesting issue, AFAICS.
GLA |
 I would suggest that the chances of there NOT being a takeover, are very small. The interesting question is the eventual takeover price. Obviously, some people are happy with 50p. However, there are some large shareholders here, including Ocean Infinity, at an eventual 24%. I am reminded of Nigel Havers, the host of The Bidding Room. He invariably advises potential vendors to list the main things about the item for sale. I list some of the factors that will weigh on the eventual sale of SRT:-
*£. SRT has the Warren Buffet 'Economic Moat'. This means that its Geovs system is unique and not easily replicated.
*£. The customer base for its systems business is gold plated, because global sovereign countries, some with very deep pockets, are a dream contact list for global defence companies.
*£. SRT has similarities with Apple. Customers have 'stickability', meaning they find it difficult to move away, because they are connected to the system. Although SRT appears to have a margin of about 35%, this has potential to increase, because Coast guards and fisheries increasingly need the SRT offering.
*£. SRT has a reputation for quality and service, which it will hopefully maintain.
*£. Satisfied global customers act as unpaid ambassadors for the company, allowing for minimal marketing expenditure.
Finally, we are in a world driven by digitisation and data collection. However, the clever bit is 'Slicing and dicing' the data so that it actually means something to the end user. SRT is certainly in a sweet spot and full marks to the team who have navigated the way to where we are. Fortunate are those shareholders who are able to join the company now. |
I am anticipating a confident update at the AGM on Thursday. There is probably anticipation of this being reflected in the share price There will always be 'profit takers'. There is a saying 'It is never wrong to take a profit'. The real trigger for the share price will be the 'Brokers note', which is probably all prepared and waiting for the final sign off of Indonesia. However, the reality is that we know there is at least £300 million of T/O spread over three years and the recent half year figures give a steer on margin. We know that head count is set to increase in a substantial way, and there are going to be much awaited team bonuses. The unknown is what P/E will be awarded by the market. When to take a profit? My view is keep all of the capital working and pay HMRC when the inevitable take over happens. |
What is the latest with Simon Tucker and the Philippines corruption allegations ? |
In danger of making a profit here after what seems like decades |
Tax !! ;-((
I owe a chunk from my business which I am delaying paying until the last minute. So far I've had about 10 "can we help?" emails and texts from HMRC.
Its a bit like those marketing emails that say "sorry we sent you an email by mistake telling you about our amazing sale". |
boing ! upwards and onwards!! |
Yump. Help the market maker. Sell the lot and pay the tax |
How many more should I buy though?
Questions are being asked here by my long standing jam creditors and I have to promise something significant. |
If revenue for first half was £25.5m and profit was £2.5 and gross margin was 35%, this would suggest overheads for first half at £6.25m. I assume second half overheads will be much higher, due to increased headcount. If T/O for year is £80 m, and year overheads £15m with 35% margin, this might leave PBT at £13m for year. (No tax to pay due to C/F losses). Looking forward to brokers note, which hopefully will have three years being forecast, underwritten by contracts with scope for upgrades as more revenue added.
Current Market cap £105m. 13 X 20 =260 |
Bit of buying before any forecasts?
Hard to imagine forecasts not catching quite a bit of attention.
“IF” 10% is anywhere close to a net annual pbt, SRT is grossly undervalued. |
Would it be reasonable to assume that some of the costs of the contracts that will generate revenue this year, have already been incurred and would therefore be in the first half results ? |
Extrader
To be a bit picky, it is Ocean Infinity that is supposed to replace the cash collateral with a bank guarantee. SRT is then supposed to replace that with the UKEF and their own resources within the timescale you mentioned. Maybe OI has found it difficult to get a guarantee that does not require them to post cash collateral in turn. If so, the cheaper option all round would be to leave the position as is.
SRT still have to come up with the UKEF facility (up to 80% of the bond) and the remainder themselves. Given their poor actual knowledge of the timescales that UKEF operates on, anything they say at the AGM might not be reliable. I still suspect that the delay on the Indonesian loan is SRT specific, probably to do with the Philiipines situation. That should not, in theory, impact on this performance bond cover. |
FT Jan 16.
'Nato will send in drones and submarines to foil sabotage in Baltic sea'.
The world is fast changing. Clearly more opportunities for Ocean Infinity. The real message is that Countries need to know what is happening in their maritime domain. Data, data and more data, together with the ability to analyse data and identify threats.
Are we going to see coastguard and naval vessels with Geovs terminals on board, analysing data feeds? |
I see from the RNS that USD 21.4m provided 28th October by Ocean Infinity to cash-collateralise the Kwt$ 213m contract Performance Bond is still in escrow as at year end, 2 months later.
AIUI, SRT is supposed to substitute the cash provided by Ocean to SRT's bankers by a guarantee or alternative collateral of its own and release monies back to Ocean Infinity.
The alternative collateral basically coming gradually from the UKEF facility as this gets underway.
Assuming this sequence is broadly correct, could somebody ask Simon for an update on where we actually are with the UKEF facility going 'live'.
The reason I ask is my concern that we're eating into the rescue facility's 8 month term, after which - if the obligation to Ocean hasn't been settled - they'll be able to start accumulating 4m shares per month at a 15% discount....
TIA and ATB |
Positive piece from ST in the IC. Buy recommendation, TP of 75p “could prove conservative”. Let’s hope so! |
3 more new posts advertised by SRT including
International Business Development Manager - OEM Transceivers
Now that they have entered the radio market via Nexus, they are clearly intending to go at it in a big way. Huge potential. |
There’s been a few people on here recently, promising to tell the board how to run the company better.How did you get on ? |
What would be nice is if the forecast is met at the same time as the market picks up a bit.
Investors are still looking for small growth stocks. You could view AIM as a no-no, but most of the trashed businesses didn't have any traction, let alone revenue. Or maybe there will be a reduced pot of money chasing a reduced number of decent shares, in a more rational way. |
Simon Tucker, SRT CEO commented; "This is a solid start to the year. The combination of our transceivers business, a £334m active contract book from multiple sovereign customers, each with long term system development plans and a £1.2bn pipeline of further prospects gives us significantly improved visibility over future financial performance. Both of our businesses are now well established and our future is underpinned by our portfolio of sophisticated technology and products, an established market position, and a global MDA market at the beginning of its growth curve."
I suspect that the long awaited and detailed 'Brokers note' will have to wait until the Indonesia contract gets the final legal sign off. The company will know how the £334 active contract book will be spread over years 2025, 2026 and 2027, together with margins per milestone. I suspect that the note will emphasise that these will be minimum figures with scope for upgrades. I optimistically predicted 100p before the end of January. However, I was anticipating the brokers note to be the trigger for the uplift. I am also assuming that people believe the forecast in the note!
PS.
Those who are trying to give this a fair share price should not totally ignore that we shall soon have a 24% shareholder! |
Card is on a pe of 6 and that's a low risk share with 6% yield and upper single digit profit growth.
So a pe of ten is good going these days.
SRT might seem cheap but there are others that are much cheaper and much safer.
The AIM market is a disaster |
Guesswork at the moment as no forecasts, but if they get anywhere near 10mln pbt, with a massive revenue jump, the pe won’t be at 10 for long ! Pets at home is higher than 10 even after a forecast profit hit from NI ! |
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