Srt Marine Systems Share Discussion Threads

[the prophet] 07/6/2017 12:08

I think this is the bit to which you are referring DJ:

'Included in trade receivables is a debt due of £2.166m, which has been outstanding for fourteen months and remains unpaid. Due to the length of time that has passed, there is a potential risk to the recoverability. Based upon information provided by SRT’s customer, the directors are confident that this balance will be paid in full, however the exact timing is uncertain due to the end customers internal project deliverable sign off processes. The financial statements do not reflect any additional provision that may be required, if the £2.166m is not recoverable'

Not sure how you can read into that anything about the relationship SRT hacve with the company concerned. Indeed, from the sound of it in the AR this contract could be the subject to a large upgrade.

[dj trading] 07/6/2017 12:02

The read through on the £2.2m outstanding is the status of the contract to which it relates. It doesn't suggest all is well with the raltionship to me!

[yumyum] 07/6/2017 11:56

I assume it (£2.2m) will be paid this year but indeed that is not great.

Another other one for the AGM !

[the prophet] 07/6/2017 11:56

DJ has a point re receivables and it is certainly something to keep an eye on or ask questions about. If it is Indonesia, then the debt will be with the large Swiss company that are the prime contractor for that contract (I forget their name, anyone?)

SRT's customers are mainly large companies, govts and govt agencies, certainly anything of any size will be with these sorts of bodies and so I would suggest there is very limited concern about getting ones hands on the dosh!

[dj trading] 07/6/2017 11:46

Re Receivables this is why you need to be concerned especially as it includes £2.2m outstanding for 14 months - presumed to be Indonesia (which is bulk of order book)
Note 13 to accounts

Trade and other receivables
2015 £1.6m
2016 £4.7m
2017 £7.9m

[yumyum] 07/6/2017 11:42

DJ, yes that is a big increase in directors' salaries ! Plus share awards.

I think they deserve it though.

[yumyum] 07/6/2017 11:35

TP, I corrected my specs !

I really think t/o forecast of £15m is WAY too low. Roll on finnCap's forecast.

[dj trading] 07/6/2017 11:30

Directors salaries 2016 £406k .......2017 £735k +81%!!!!
Another one for the AGM!

[dj trading] 07/6/2017 11:27

And another imminent conference with no mention of SRT
Though I would accept that given the list of speakers it looks like a lot of naval gazing if you will pardon the pun!

[dj trading] 07/6/2017 11:22

Didn't bother posting this previously but you would have thought that SRT would have been involved here - I can't see any sign
I think some serious questions need to be asked!

[the prophet] 07/6/2017 11:21

DJ Trading, welcome to the thread at long last, lovely to have you on board and look forwards to you keeping our feet firmly on the ground! Enjoy.

[the prophet] 07/6/2017 11:18

YUMYUM, sorry, yes, all credit to Cardiff as well!
And I think you mean 'rose' rather than those painful sounding 'sore' tinted specs, glad they don't have those at my opticians!

I agree, I can see value here at well over a £1, but caution it may take a little longer to get to that position, perhaps another set (or two) of results, be it interims or full year.
I tend to agree with ee, I can't see the broker's pushing things out too much, I expect a modest forecast which will probably mean SRT will remain under the radar, but firmly on the AIS map!
By modest perhaps a forecast t/o in the range of £12.5m-£15m for the year ahead. I do expect that any forecast will get upgraded moving forwards. And the size of the contracts are such that any upgrade is likely to be very meaningful.

[dj trading] 07/6/2017 11:13

123P - I'm glad somebody has actually bothered to read the annual report
Likely to be Indonesia contract.
And overall level of Debtors should be of concern relative to turnover!

[yumyum] 07/6/2017 11:10

123, Presumably that is Indonesia.

This share is totally under the radar. Forward p/e in single figures. Maybe very low single figures with a current 3-year order book of £77m and likely another £60m to be added on over the next few months.

SRT shares offer amazing value. They should be over £1 just on what we know already and without rose-tinted (carefully ground lenses must make them a bit sore for a while) sunglasses looking far into the future.

[123prezzie] 07/6/2017 10:56

Debtors include £2.166m which is well over a year old and is awaiting customer sign-off, which the directors are confident will happen. Quite a lot of money. Anyone able to comment in more detail?

[yumyum] 07/6/2017 10:53

TP, and much credit to Cardiff you forgot to say !

[eagle eye] 07/6/2017 10:49

Well done to everyone at SRT for delivering solid results.

Considering phase 1 of the Far East contract was paused to rescope and revise the contract, this was a sterling effort.
Although completion has been extended a year to 2020, it appears this could be meaningfully upgraded, rather than postponed.

The VSP has been increased from £200m to £270m, though it has been well documented here as to what this actually means. More concrete is that significant progess has been reported towards signing four further projects valued at approx £60m during the year so it looks like further announcements will be made during the year.
Hopefully FinnCap's note will have a forecast, though as management has learnt from the past, better to keep things tight and upgrade as the year evolves.
Staff levels increased from 50 to 55 as annual overheads increased from $4.8m to £5.6m. Trade receivables are £7.9m which is high, vs £4.7m last year.

The outlook looks encouraging.
See you all at the AGM,
Eagle Eye

[the prophet] 07/6/2017 10:48

A strong set of results with a very detailed commentary that is worth reading carefully.
great to see the VSP has increased 33% over the last year, with several other large additions possible to that figure and the contracted order book has increased by 10% over the last year.
It looks like the large Asian contract is set to have a significant increase in value, we start the financial year with two active projects and 4 further projects in M.east/Asia worth £60m that sound like they are not too far away as in hopefully might sign this f/y.
SRT has been transformed from a 'box shifter' to a systems supplier and all credit to ST and the team at MSN for a very impressive achievement.
Lots, lots more to come here, lovely!
Look forwards to seeing folk at the agm next month.

[visionon] 07/6/2017 09:27

Plus they have desire to grow core business and there is the prospect for satellite recurring revenue. Very difficult to value because at some stage large one offs would presumably dry up and need recurring revenue to kick in i.e. In say 5-7 yrs time.

Lots of potential questions for the AGM.

More importantly the unopened jam pot is getting in the way of the peanut butter jar. What to do ?

[donemyhomework2] 07/6/2017 08:57

Not far off loobrush.Possibly the margin will start reducing towards what they accept should be lower % of 50 but still there is a massive possibility for this company.

[loobrush] 07/6/2017 08:47

Quick calculation-
£26 million per annum turnover would be an increase of £15 million per annum at 65% gross margin = an extra £9.75 million to the bottom line.
say an extra £1 million for overheads and that would give a total profit of £9.95 million per annum
With a market cap of £66million p/e ratio would be 7

Any views anyone ?

[zoolook] 07/6/2017 08:36

Sales growth of only 3% !

[donemyhomework2] 07/6/2017 07:57

Pugugly see my earlier post re massive increase in turnover over the next three years. It's conceivable that at these levels the forward PE ratio is now in single figures.

[visionon] 07/6/2017 07:55

I think you have to assume more than 3yrs because opportunities are not yet orders and then would be spread. Over 5yrs that would be £26m pa. which gives more credence to current cap. And still with upside from assumed 20% conversion.