Added once again earlier this week. Continued long term rise should see SRT join FTSE AIM top 50 index, which then gets it on radar of wider audience
We're currently bigger mcap than IQE which is in AIM 50 so we're in the right ballpark for promotion |
This has taken a dark turn… |
That's a great tax-saving tip! |
Remember CGT dies with you. |
Or you die within seven years and pay CGT and IHT... |
that echo has returned |
When will we leave AIM ? |
When will we leave AIM ? |
ATH is probably the resistance, although it wouldn’t be if charting had never been invented and promoted by snake oil salesmen, as its an irrelevant price. |
ATH coming up |
so called 60p resistance has gone I see. |
Is now the time to pass on your SRT shares to your heirs and start the clock ticking on the seven year rule? will the good lady increase it to ten years? If you transferred a month ago your CGT bill would be a lot less than today. However, if you are planning on a gift the CGT might soon be a lot more. |
And ECGD still dither. Come on HMG - if growth is all get those guys to pull their finger out. |
 What is SRT and where is it going?
This piece is full of questions, with very few answers!
It is provoked by three things. Oliver Plunkett replied to a question at the AGM, as to where is SRT’s competition. I paraphrase by saying, ‘possibly in China’. Secondly, the pace of change in the armaments industry. Many of the old technologies, such as tanks, are useless. A very expensive bit of kit can be taken out by a low-cost drone. The Ukraine war has changed everything. Thirdly, Chinese EVS are in a league of their own, both in terms of cost and technology. Tariffs can only be a short-term fix. China is going to own the market, goodbye every other country.
For some obscure reason, the world has allowed SRT to be the global leader in maritime awareness technology. I suspect that Simon and Neil keep pinching themselves and asking why. Every passing day allows them to dominate a market which has the potential to be worth billions, if not trillions.
Cannot some clever person create an AIS module the size of a Bitcoin? On the other hand, how many countries would allow a Chinese made module to control their shipping? Are autonomous ships on the horizon? I think not. Ships will need large engines and engineers for many more years. There can be no doubt that maritime technology and data will proliferate, but that fits squarely with SRT and Geovs. I sometimes wonder whether we appreciate how clever Geovs is. I remember Simon saying how much data is produced by one rotation of a radar scanner and Geovs consumes it all and delivers it in a simple form to the operator.
When SRT won a systems contract for $30 million, this was thought to be a game changer. The company now has a contract for $200 million and the reality is that contracts will keep increasing from $500 million to $1 billion. What do Palantir and Anduril think about SRT? How would SRT utilise $500 million of capital, if it was offered? How does Anthony Clake view the future of SRT? Does he see more potential in SRT than Ocean Infinity? There are potentially numerous providers of Ocean Infinity products, but is SRT unique? |
Another contract. Lost track now of what the results forecast is. Any ideas ? |
I hope they will soon find a way to monitor underwater cables. |
The link to the AGM Presentation is here: |
They have added the presentation to the website for reference and for those not able to attend.
This might seem trivial but the Philippines senate have passed the PCG modernization bill which includes a fixed three year term for the Commandant, including the current one who was otherwise due to retire soonish at 56 after a year and a half. This sort of churn has been a bit of a plague for SRT as the new man needs time to master his brief. From what I heard at the AGM, the National Security Agency are driving the issue and intend to incorporate BFAR's existing system into something bigger. Trump and aid freezes may have an adverse impact but I expect US policy to revert to what it has been to avoid China filling the gap. |
"I think the point about the presentation talking about the profile of contracts with high levels of civil works and none was to prepare investors for possible variations in margins......"
I think that's good point LaV but looking back at what has been posted here about the AGM I cannot see reference to margins on civils. For the benefit of those who weren't there and anyone else who missed it, Simon said they do not add a margin to the cost of construction work as it would be pointless to try to add a surcharge to what the client has to pay.
The key point here is that SRT will make a decent margin on what they can exclusively provide. That is Software and training and the expertise of SRT staff.
Customers know the price of hardware and construction work so trying to inflate for profit is just likely to create distrust. |
C5
I think your turnover forecasts will be there or thereabouts. There are a couple of points to note though. The initial milestone for Bakamla, £40 something million, will be high margin but the cashflow is split 50:50 with the local partner despite them not having actually done anything at that point. I think the point about the presentation talking about the profile of contracts with high levels of civil works and none was to prepare investors for possible variations in margins so that high nominal turnover may not correlate much with profitability.
I don't think the market will believe the forecasts but a positive point is that they only have five months to get the first year of delivering to a forecast right. That will lend a bit more credence and maybe by the year after all will be forgotten. I expect your £1 will be reached after they deliver this FY. It seems that there is a bit of what the chartists call resistance at the 60p level (one of the rare things I have correctly suggested) but I suspect that will be blown out of the water when the note/contract commencement happens. 75p and then £1 in five months or so. |
I think I can wait a little bit longer!
Be very interesting to see the market reaction on the forecast. Bit of a guessing game with the pbt being the key figure imo, to have a guess at a reasonable rating, although the big revenue jump is bound to get noticed by the Twitterati.
I imagine Pbt will be a lot higher than last year which will exaggerate the growth rate. |
I have revisited post 15498 of Jan 7th. It is unlikely that we shall see a share price of 100p before end of Jan. However, we are still awaiting brokers note |
The brokers note will not arrive until Indonesia is up and running. I am anticipating a forecast which will be underpinned with £300 million of signed contracts delivering in years ending June 2025, 2026 and 2027, with T/O of £80m, £100m and £120m. The forecast will be based on these figures, allowing for upside with everything else. Will the market believe the forecast? |
What will the broker share price target be? 125p? |
Hopefully the broker's note won't be vague about pbt and use ebitda instead, although there can't be much depreciation or amortisation to take off ebitda, seeing as SRT haven't made an acquisition and are not capital intensive in the sense of using equipment for production that needs depreciating.
If there is any sense that the net profit might be around the same level as interims, I don't think there will be long to buy shares cheaply. |
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