Srt Marine Systems Share Discussion Threads

[the prophet] 14/7/2016 10:21

lovely stuff, to think the shares were 18p just over 4 months ago!

[owenski] 14/7/2016 09:42

Yep, same here IC2

Lumpiness still an issue, but the bigger picture now has proven credibility. Projects are definitely on the conveyor belt even if it takes a few months, they will move to contract phase.

The south China Sea is one issue that can be seen as a driver but other countries, ie, South America, are also gearing up for MDM systems.

Agree with EE also.

[interceptor2] 14/7/2016 09:30

Very true eagle eye.

When the chart is looked at, I would normally expect some sort of retrace and consolidation before the next leg up. But we need sellers to appear first which hasn't happened yet in larger numbers. But I am not complaining.

Holding all mine and in fact looking to increase still on either contract news or chart action on the way up.

[eagle eye] 14/7/2016 09:06

Trumpet fanfare...50p on the offer.
Chart might look a bit heady short term, but nothing another contract announcement can't sort out.

[hjb1] 13/7/2016 18:47

cfro,why? should there be?

[cfro] 13/7/2016 18:09

Not much of a dip in the share price thus far..

[owenski] 13/7/2016 17:40

Can understand why stage three elements being spoken about potentially being brought forward into stage two then.

Just thinking out loud re. the whole South China Seas security situation.

[countryman5] 13/7/2016 17:32

Daily Mail on line 'Indonesia will sharply strengthen security around its South China Sea islands where there have been clashes with Chinese vessels, the defence minister said Wednesday, a day after Beijing's claims in the waters were declared invalid'.

[1madmarky] 12/7/2016 17:37

Hopefully not for SRT

[goodapple] 12/7/2016 14:08

It's an ill wind...that blows nobody some good.
Hence SRT's good prospects in that part of the world.

[countryman5] 12/7/2016 10:38

Judgement out on South China Seas

[hjb1] 12/7/2016 09:28

hope they don't get a bid coming in anytime soon!

[donemyhomework2] 12/7/2016 09:20

It's coping with the extra turnover and not allowing to drift to the following year. They achieve this and this would easily double and go north of 100p.

[sefton1] 12/7/2016 09:19

Still looking good here. Already doubled my money here.

[fft] 12/7/2016 09:12

Done my....That's why I used margin of 40%. Should work out roughly the same.Looking at Ecuador, as an example, it appears that at $30m it would be a one or two year contract. Again I would assume 10 in year one and 20 in year 2. As all costs have been accounted for that would be about £3.2m in year one and 6.4m in year 2 which is an extra 2.5p EPS year 1 and 5p in year 2. Then we have Saudi, Kuwait, Malaysia, etc etc....It does sound too good to be true.

[donemyhomework2] 12/7/2016 09:03

FftYou don't seem to include tax in your EPS calculations.If profit is £4.4m then after tax at 20% it becomes £3.6m and we have 130m shares giving EPS of 2.76p

[eagle eye] 12/7/2016 08:05

yumyum,
Yes, I had my pessimistic/realistic glasses on last night.
I like SRT's management and how they operate. An AGM visit is priceless as you have the opportunity to speak to all management individually and get real world answers.
There is a big step change in operations here and however good management is, handing that successfully will be difficult.
You don't have to be a genius to work out the potential, especially if you put the prospective PER on x15 or x20. It has always been a bumpy ride and until project/mandates start to overlap, that could continue for a while yet.

[yumyum] 11/7/2016 21:55

kalk....plus the £70m order book....

It will not all come at once and might not all come...or it might be bigger...

anyway...it looks rather positive.

ee...you are cautious...that is sensible. The company has a history of over-promising.

[kalkanite] 11/7/2016 20:18

FFT

I agree with yy above. Your 40% margin calculation has corrected the fact that you have not taken tax into account. However, at year 2 which you calculate at £8.4m net of tax I make that 6.5p EPS if you divide by 130m shares in circulation, so I'm not sure what figure you are using for the share count.

Any further project wins will equate to 0.3p EPS for each £1m.

{1m * 50%(margin) * 0.8(20% tax)}/130m shares

So a potential of 60p EPS left in the VSOP. I think we would have to be very optimistic to assume all of the VSOP to come good, but it does give us an idea of how under valued the company is.

[yumyum] 11/7/2016 20:02

fft/ee,

In my opinion this financial year does look like a slam dunk in terms of increased revenues and profits (which after carried forwards losses are then taxed at 20%).

We do not know what the revenues will be. Period. However, I expect revenue this financial year to be north of £18m. SRT seem more concerned about things going too quickly rather than too slowly. Watch this space. CEO does not put pots of jam on AGM seats without supreme confidence. Let's share that with him and expect the share price to be north of £1 before end-March next year. Personally I expect it before Christmas and likely much sooner.

I do not think the market needs a good set of figures. What it needs is some sort of visibility. We (private investors) are able to see through the fogs of this business a lot better than the 'market'. The 'market' is barely able to do that. To the advantage of any educated buyer right now.

Jam-tinted spectacles maybe....

[eagle eye] 11/7/2016 18:59

fft,
No it certainly isn't as easy as that.
This year doesn't look like a slam dunk deal.
Bahrain is installed, but not sure when the next phase will commence.
The large Far East contract might not deliver that much revenue this year. Phase 1 might complete around Sept. At the AGM the suggestion was that a larger weighting than expected migh fall in Phase 2, but who knows what will fall in the current year to March 2017.
Unless anything else gets dragged over the line, H1 might not be too good (only my view).
I agree overheads likely to rise, but £7m looks high. I think £6m looks a more prudent figure.
Customer service staff has been ramped up ahead of schedule. I think SRT had two strong candidates and decided to take them both on, rather than be scratching around re-interviewing some months down the road.
Margins are higher in project work, so your 40% looks light. I'd suggest margins of 50-55% might be nearer the mark.
Revenue lumpiness has historically been the name of the game here. Can't dispute revenue of approx £30m gives rise to roughly 6.3p of earnings.
Lots of ifs and buts, but the market will want a good set of figures (and further contract wins) before the historic £10m turnover justifies the current £60m market capitalisation.

[crazycoops] 11/7/2016 18:46

That's why I've placed a big bet here fft and have been accumulating since March - that deal completely transformed the company and the market seems not to have valued it properly yet. The market tends to like reported and predictable numbers and SRT's history of over promising and under delivering has probably compounded the mooted market reaction (although some people have wised up over the past week or two). No doubt there is a lot of hard work for SRT in delivering these projects and winning new ones but they have a great foundation to build from.

[fft] 11/7/2016 17:27

Based on the last post, I just want to make sure I am in the right ballpark.Assuming the Indonesia contract revenues pan out at 10m this year, 20m next and 40m in year 3.Also assuming that other business this year only equals last year and that overheads are 7m (they have to increase as support staff taken on). Oh, and gross margins fall to 40%.With 18m turnover, profit before tax this year would be (18-7) * 40% = 4.4m which is EPS of 3.7pNext year with 28m turnover, pbt would be (28-7) *40% = 8.4m which is EPS of 7p.Year 3 is pbt of 16.4m and EPS of 13p.Any extra project wins would obviously increase those numbers.Surely, it can't be easy as that ?