Srt Marine Systems Share Discussion Threads

[countryman5] 16/11/2017 16:30

Comment from Mr T.
I’ve seen some of the debate on buoy tracker. Some observations.

- Chinese AIS manufacturers produce cheap AIS products for their local market where compliance with the AIS standards is not tested and certified. They then try and sell them internationally. In most countries a transmitting item of any kind needs certification. Making AIS properly is tricky stuff in reality.
- Fishermen are desperate for such a solution and so have been buying and illegally using the Chinese stuff for years.
- They have a number of serious issues: 1) the quality is very poor and they do not last long, 2) they transmit an incorrect message type – the target on the screen looks like a boat not a buoy. 3) they block other ais transmissions.
- Authorities have been clamping down on them in recent years because of the dangers. Additionally fishermen have stopped buying them due to the reliability issues and problems with using.
- Buoy-Tracker is a certified AIS AtoN Type 1. It is the only certified device for fishing buoy tracking. One issue for fishermen is that they need to have an AtoN MMSI which they must get from the local radio authority.
- The bracket system is loved by the fishermen. One of things they hate about the Chinese stuff is the cable tie system. Our bracket system means it can be simply fited in seconds and there is no physical on-off switch – its simple, quick and secure. A single bracket costs them $20, so its cheap to equip all their buoys. They love this.
- We have seen enormous interest in this product – Russia, Canada, Europe, USA, New Zealand – fishermen and authorities are cautious and so there is a lot of testing going on. We have even just quoted fishing companies in Vietnam and China this week!

[yumyum] 16/11/2017 09:18

If you believe there are 4 contracts to be signed before the start of next financial year and if you believe there is significant recurring revenue to be gained from own-system satellite tracking then the company's shares look a very attractive investment proposition indeed.

I do believe the above and would expect a first contract announcement in days or weeks rather than months.

Gearing up the company is a brave move. Fortune favours the brave in this case. Significant investment will reap significant rewards.

Meantime we do indeed need to see those projects start to be delivered. I am very confident rather than merely hopeful.

[homeboy] 16/11/2017 09:07

And therein lies the problem.

Beneath the headline figures - which are pretty poor for a company resting on an absurd 45m market cap, not profitable and in debt - the cash isn't actually flowing in. Hence they now have an expensive overdraft facility that they are already tucking into, expect that to continue.

"He is exemplary in his willingness to communicate with PI's and the clarity with which he presents the case for SRT through webcasts etc."

The case for investing should be made on reasons of expected financial return, which is based in part on delivery of objectives. No doubt the CEO is a nice bloke, but that's no rationale for investment.

[dj trading] 16/11/2017 08:56

"yump15 Nov '17 - 23:48 - 6115 of 6115 0 0
I'm asking you what the total contract value is. That, as far as I can see, appears nowhere"

Yump - Mid East Contract value - Page 18 item 2

Debtor value (accrued/invoiced revenue for contract not yet paid) is on page 11


"yump15 Nov '17 - 23:48 - 6115 of 6115 0 0
Or to put it another way: why do you think year end debtors = total project value?"

I don't think year end Debtors=total proj value.
Year end Debtors for that contract = the amount of Revenue recognised in P&L (invoiced or accrued) but not yet paid. (see my original post for detail - 6095)
DJT - FCMA

[yump] 15/11/2017 23:48

DJ Trading

It is not what I think - the data is plain to see. It is what the data represents that is the issue. Perhaps I haven't been clear in what I am asking you.

I'm not asking what value was in the debtors figure at year end, I'm asking you what the total contract value is.

That, as far as I can see, appears nowhere, unless you assume that SRT have booked the entire project into that debtors figure.

Seeing as we don't know what deliverables have not been delivered at year end - how can any conclusion be made about what is yet to be allocated as revenue from the rest of the project which is still ongoing.

You said this:
"So only £0.9m revenue to book this year and all the work to be done (and cash expended.)"

If you are going to make that assumption, then I think you need to explain why you think there is no more revenue to be booked for the rest of the project being delivered.

Or to put it another way: why do you think year end debtors = total project value ?

Or to put it another way: my year end debtors certainly does not equate to my total project values underway.

That's about as many ways of putting it as I can think of.

[goodapple] 15/11/2017 22:50

You either have faith in the prospects for SRT, or you don't.
Like several other posters here, I have been on board for a few years now which have been something of a white knuckle ride - seen a few peaks and a few toughs.
The carrot keeps getting bigger, though it always seems the stick gets longer.
Now it's satellites on SRT's menu, and that's another couple of years down the line. Jam the day after tomorrow.
But if you read the big picture for yourself and envisage the future demands for MDM, and you consider the achievements of this little business in MSN which has established itself at the forefront of AIS technology I reckon it's worth staying aboard for the ride. Their technical achievements are impressive.
To call Simon Tucker just a polished performer would be to do him an injustice, as I believe he is totally committed to his vision for the company and its future. He is exemplary in his willingness to communicate with PI's and the clarity with which he presents the case for SRT through webcasts etc.
He and SRT have had a bad press for some time as being a serial disappointment for investors. I am sure he relishes the prospect of proving the doubters wrong.
As somebody else who posted here a couple of weeks ago, I too am of retirement age but I hope to stay around long enough to reach the promised land. Or the promised carrot anyway.

[dj trading] 15/11/2017 18:21

yump15 Nov '17 - 09:20 - 6101 of 6112
"DJT Do you actually know the total value of the Middle East project ?"

Answer - Yes (were you asleep at the AGM?)

yump15 Nov '17 - 14:14 - 6109 of 6112 1 1
"The reason I ask is that SRT have said revenue is booked on deliverables being delivered. They are not operating an Enron style mark-to-market."

Yump _ It doesn't matter what you think. Read the notes to the accounts - revenue recognition and look at the actual numbers. If SRT create a debtor of £4.8m for this contract as at year end it means that they have booked revenue of £4.8m in that year i.e. last year.

From the AGM presentation -
"Balance Sheet: • £7.9m debtors – £7.0m of which due from two contracted system
projects – of which £2.2m has been subject to a delay due to project
re-scoping*."

[yump] 15/11/2017 15:06

orinocor

Unfortunately the thread is suffering from the usual ADVFN hindsight postings.

When the share price is rising, all the positive posts arrive and when its falling all the negative ones do. Both parties feeling justified by the position of the share price, or at least more secure in that they won't look stupid.

The most valuable posts over 20+ years I've seen are the ones that appear at tops and bottoms, being contrary.

I remember when RCG were flying, someone appeared and stated very plainly that they thought a sale was clearly a fraudulent related transaction, after doing a bit of digging. That poster was the least popular on ADVFN for I while, I bet. Subsequently proved right.

Currently there's not much balance here at all now, its swung from one way to the other just like the child's good and bad object split.

[yump] 15/11/2017 14:58

homeboy has at least hit on one thing which of course nobody likes to think about and Brexiteers have never mentioned... and its not specific to SRT...

What is going to happen to UK businesses debtor figures when we start on these incredible opportunities to trade more with the rest of the world ? The US may pay in reasonable time, I don't know, but all contacts I've had with anything East of the Med, result in what you might tactfully call 'flexible payment terms'.

SRT are at least being paid by governments directly, not some intermediary and they are also supplying something that is critical, as against some sort of consumer product.

[orinocor] 15/11/2017 14:50

Even though I believe these shares are comically overvalued it's nice to see some balanced views on this thread. It makes a change.
Clearly the institutional shareholders are holding on to their shares. For now at least.

[homeboy] 15/11/2017 14:14

Concerning that their margins are dipping down too

[homeboy] 15/11/2017 14:06

Indeed it is high risk, the underlying box selling business is no where near profitable and yet this investment used to be sold on the core and mandate offering.

In fact, that business is so dire they now lump core and mandate together, so much for 10m core turnover projections.

The government contracts are lumpy, unpredictable and of late, they haven't even got paid for one of them which suddenly cancelled. SRT used to spout that they get 50% deposit upfront - certainly not on so called contracts which are on extended credit payment terms - no wonder they've had to get an expensive overdraft in place.

Even if they get a much touted Middle East contract, they may declare revenue, but payment is another matter, in real cash terms, SRT are likely to end the year in the red yet again due to lengthy trade receivables payment terms, I'll wager they'll be dipping into the overdraft again. Will they need to hire a cleaner to dust of all the unsold stock they've accrued?

[ramnik007] 15/11/2017 13:55

SRT is high risk because it relies on Govt contracts, but require nth number of meetings to convince / entertain all the bureaucrats. Unreliable for contract timing and payments. If only they were selling in the consumer electronic market!

[countryman5] 15/11/2017 13:40

Website gallery photograph of Emtrak stand at METS, Amsterdam.

[bypooh] 15/11/2017 12:42

Nor much about finance.

The bulk of the £250k is certainly for establishing the loan note programme, a one-off cost, which should be spread over the period of the programme - this will be at least three years. Think about it, to borrow a phrase. The due diligence, documentation etc.

Secondly, LGB do not get any interest, as it is not their £2m.

[hjb1] 15/11/2017 12:14

as he admits, he knows sweet F.A about the business or what they do.

[walbrock82] 15/11/2017 11:51

The problem I see with SRT involved three factors:

1). Lumpy sales and delay in orders; - this caused profits to be inconsistent.
2). The volatility between inventory levels and sales.
3). After fulfilling their orders, SRT has to wait for an extremely long time to receive cash payments (now it is over 250 days).

Add in the loan conditions of 9.5% coupon interest and the 12.5% in gross fee (SRT received £1.75m in net proceeds, check cash flow statement), it looks like SRT is serving LGB Corporate Finance very well. Think about it, a £2m senior loan note generates £250k in fees and 9.5% in coupon interest giving LGB a total of £450k in interest in the first year, or 22% return.

Hope their new business produces profits.

For full analysis and illustration click here:

[yump] 15/11/2017 09:20

DJT

Do you actually know the total value of the Middle East project ?

[hjb1] 15/11/2017 09:06

well they could always sell with or without the bracket, can't see it though!

[dj trading] 15/11/2017 08:28

No not joking!
Fishing buoys (in the UK/Europe at least) are no more than a small football sized buoy with a 5ft stick/flag on top. In the UK they are often used to mark each end of a string of lobster pots. Fisherman will record position from GPS so don't require aton to locate. However, other boats often run over them (or trawlers drag up/damage lobster pots - as not aware they are there particularly when working at night. So an aton is of use in indicating to trawlers or any boat at night that there is fishing equipment.

So going back to my suggestion. The buoys are small with a thin diameter post/flag and are moved around equipment. Fisherman might have one aton but many buoys so want to move/attach quickly. They wouldn't want to pay for many fixing clips to fit to each buoy just in case they wanted to fit the aton. (and the clips are too big to go onto most fishing buoy posts) It looks like SRT have just modified their Identifier without thinking about the practical side.

You will note that the Chinese version that has been on the market for 8+years has two slits down the side presumably for locating two attachment straps. (and looks somewhat smaller) - Given that these are likely to get lost over time - price will also be a consideration - best electronics not an issue - if it doesn't work properly not really the end of the world as most (99%+) fishing equipment won't be marked anyway.

[smartmoney100] 15/11/2017 01:20

Too funny DJ :-)

[hjb1] 14/11/2017 20:51

oh that would look really stylish wouldn't it, a serious bit of expensive kit held on by a cable tie ha ha, love it! I've got a good idea too, maybe they can attach their Atons with blue tack..lol! DJ I take it you were joking?

[dj trading] 14/11/2017 18:43

Goodapple - Re Fishing buoy trackers - perhaps Tucker read my post in 2013!

DJ Trading22 Feb '13 - 18:13 - 1993 of 9351 0 0 Edit
TP - Re Identifier competition - there is a competing identical looking product which has been on the market for 12-18 months to my knowledge. Originally designed as a fishing net marker (there's another AIS opportunity) but now also marketed as an Identifier for boats as well. Spec looks pretty similar to SRT but it's manufactured in China!


That is TCB who were the original manufacturers of SRT's first class B



SRT's video
Why does it have to go into a bracket? Better to just tie/strap on then easily transferable between buoys - just a suggestion Simon

[dj trading] 14/11/2017 18:19

Countryman Re post 6089 above $7.5m (£5.7m) Mid East Project.
£4.8m was booked as Revenue last year on Contract signing just one day before year end!
See Debtors in AGM presentation page 11

So only £0.9m revenue to book this year and all the work to be done (and cash expended.)

Re cash - with this project to complete and fund (cash) and another £0.5m bank debt to repay before year end (current liability) cash will start to get tight again if they don't receive some payments for the Mid East Proj in 2H.