Srt Marine Systems Share Discussion Threads

[astralvision] 23/3/2018 17:52

Many thanks for your reply LaValmy, some interesting info.I still maintain it will be some time before SRT gets significant satellite recurring revenue. $1.25m would be a start, but to have an impact on SRT's valuation and therefore share price needs to be something like $5m+, imo.That $5m will be highly valued, very high profit margins and recurring revenue backed by govt or govt agencies. So long as it doesn't get swallowed up by general overheads and the like.

[jimpubes] 23/3/2018 16:02

Fair and honest points. Thank you. Let's hope for good news soon.

[lavalmy] 23/3/2018 15:21

Much of that over £1 guessing was based on the the Indonesian contract carrying on. I, for one, was disappointed at the way shareholders were kept in the dark about the lack of progress. Lots of talk from SRT that they wouldn't/couldn't give a blow by blow account of progress on contracts when no blows were struck at all.

I think that these projects we are waiting for, and some of the others to follow, are much more advanced than was ever the case before, down to the nitty gritty of what goes where. The VMS connect thing which Simon explained to me in the context of Vietnam is the spitting image of that described in the Philippines tender. All the bells and whistles have been added not on a let's see if people will buy this basis, but as a direct reflection of what the government customers need the system to do. Moons ago the were hoping to sell AIS boxes, then it was 'systems' in a generic sense, now it seems to be very developed almost as a customer-led thing. You worry about stable revenues not showing up for 5-10 years. I am more worried about what happens in five years when these 14 are installed. Where will the big bucks come from? Africa? South America?

Sure recurring revenues will be more highly valued, but significantly less in size, compared to say an average of £30 million a year for the next seven from systems/boxes. Simon talks about up-selling etc and that may prove to be true. Selling anything at all at the moment would be a start.

[jimpubes] 23/3/2018 14:39

All this positivity and troll bashing is wonderful.
But but but... gentlemen - the share price!

Without wishing to get personal, there were parties guessing that the share price would be well over £1 by now, or even a year ago.

And now the talk is maybe next year, or perhaps stable revenues in maybe 5 to 10 years.

OK I am sitting on a huge value loss at the moment. Maybe good things are around the corner. If so I will celebrate.

But 5 to 10 years is a very long time in a technology market. I would not be surprised if some disruptor had rolled over the market by then.

Does Tucker really have another 5 years of none delivery?

[lavalmy] 23/3/2018 14:04

astral

Whilst I agree with your main points, the transponders on some of these contracts could well be installed much sooner than you think. Firstly, because the numbers are not always enormous, e.g. 5,000 for the Philippines (plus however many extra in the increased budget). Secondly, they are better prepared or at least should be for the travails of doing the installation. Also look at the timeline in the Philppines contract.

I know for a fact that one of the contracts we are waiting for includes $1.25 million in satellite revenues, which suggests in the region of 12-20,000 vessels, which would be more of a challenge, but that doesn't mean that all have to be installed before the revenues start flowing.

But, I suppose, the overarching point is that once some are installed and producing revenues and other contracts are announced which include satellite revenues investors will look at those future revenues as a dead cert and discount accordingly allowing for delays in installation

[astralvision] 23/3/2018 11:19

LaValmy

I feel end of next calendar year is far too early got any significant satellite revenues, call it 5 years as a reasonable estimate, imo.

Why?
because they first of all need to get the transponders out there into the relevant markets.
The main area for transponder sales has, to date, been the M.east and they don't need satellite data, they can see everything they want from shore-based AIS receivers.

The area where it could be rich pickings for satellite is SEAsia and perhaps, to a lesser extent, S.America.

SEAsia looks to be an excellent area for SRT, with many significant projects at various stages of development. Shame about Indonesia, that could have given the area, from SRT's point of view, a massive kick start. We shall just have to see when or if it returns. But there is still Philippines, Vietnam, Thailand etc but first they have to win the contracts. Second, fit all the transponders. That is not an easy or quick job. Then and only then can they look at satellite revenues. I think they would be doing well to start something in three years, but five seems more realistic, imo.

[pugugly] 23/3/2018 11:08

Countyman1 - Odds on (imo) for 1 - Nomad will have no option if an expected contracts fail to materialise - If did not allow would be at significant risk (imo) of regulatory action - Could be seeing an SPRP type reaction - Down over 30% and still falling at the moment and they have sales and might still be profitable - Might being the operative word.

[lavalmy] 23/3/2018 11:06

astral

Good point about the dichotomy.

I would agree that the p/e for mere box shifting, which is what these systems sales will look like, is likely to be low. Once it becomes clear that there is an ongoing element, whether software, upselling or satellite, things may well be different. And the market may start to anticipate that boxes sold today will be cash generative in the future. I don't think satellite revenues are that far away - end of next calendar year maybe?

[astralvision] 23/3/2018 11:04

m.cap down now to £25m, certainly looks as if a fair chunk of any possible pw is priced in, but there again a company making consistent profits of £2.5m might expect a p/e of 10 thus giving £25m m.cap and SRT seem some way off being consistent. OK, it's never that simple and there is a price for 'potential' but I think investors are probably less willing to pay for that 'potential' upfront and want to see a few sets of decent results, which have proved somewhat elusive over the last few years.

[astralvision] 23/3/2018 10:59

ah I see yump, you are going for the 'greater fool theory'!

[yump] 23/3/2018 09:50

Good point about the p/e. The high p/e's go to the businesses that show consistent growth. However, excitement soon gets rid of the past and new investors often don't look too far back, so perhaps not quite such a long hold - assuming the dips don't continue. If at some point there was £25mln revenue, but then it dipped to £18mln, that would lead to another period of doom and gloom, even it were still nicely profitable.

[astralvision] 23/3/2018 09:45

In some ways it’s quite peculiar in that you have a company who are as open and investor friendly as SRT, yet, with 4 trading days left in the f/y investors are left with not a clue as to whether the t/o will be £5m or £15m or all stages in between.
That’s the problem with this business model.
I’m not sure the market is going to award SRT a high p/e, once they are making consistent profits, as it’s difficult to see the situation changing, least in the near/medium term. Long term satellite revenues offer the possibility of some stability and revenue visibility. But that’s probably 5-10 years away, that’s a long hold!

[yumyum] 23/3/2018 09:41

LaValmy, you are probably right.

[countryman5] 23/3/2018 07:54

I concur with LAv's three options and there will probably be a RNS next week. I don't believe the NOMAD would allow No 1 at this late hour. Of 2 and 3 I support No. 3. Both of these would result in a serious share price rise. If the share price is at this level at the time of the RNS then I expect SRT to appear at the top of the share price rise leader board.

[lavalmy] 23/3/2018 06:36

I suppose I should add that, despite my cynicism about the timing aspects, these contracts are solid and that SRT have been busy working with their customers in great detail as to what to put where and what will be required to get the systems to work. That work not only means that they can hit the ground running once these things are signed, but also serves, at least for me, as a great reassurance that these things are happening.

[lavalmy] 23/3/2018 06:21

Yum

I can't see them making the numbers without a couple of contracts - the gap is £7-8 million, probably too large to fill with just one. And remember that they have a history of managing to pull last gasp contracts out of nowhere, as well as a history of not pulling them out. So either they miss big time, or they half fill the gap with one contract or they make it with more than one.

I am not entirely convinced that boatowners are queuing up for AIS and, if they are, they have a choice of producers. The leisure market is broadly in developed countries where governments are distinctly not forcing the issue. Elsewhere, yes governmemts are beginning to act, sometimes with coercion from e.g. the EU, but the logic of AIS is turned on its head with encryption. Nobody except state sponsored actors can see the boats. Even then the fishermen have to be persuaded that it is for their well-being, safety etc.

[kendonagasaki] 22/3/2018 21:48

Gentlemen, Ladies and Genderless!Please support Simon Tuckers new remuneration package for the new financial year.I support his 15% wage increase and more free shares and a lofty cash bonus at every opportunity given for failure!Hip, Hip Huzzah!Hip, Hip Huzzah!

[lavalmy] 22/3/2018 17:48

YumYum

I would agree that a profit warning is maybe in the price - a 20% drop in the week. But I see three scenarios:

1. A profit warning without any new contracts announced but some waffle about how projects don't fall neatly into accounting years/decades and that they have £60 million about to sign.

2. A profit warning with one or two contracts announced, some of which will be booked this FY reducing the magnitude of the warning.

3. No profit warning, with one or more contracts announced, some of which will be booked this FY.

Your guess is as good as mine as to what the share price reaction might be. I suspect that No. 2 would see a decent fillip in the share price. No. 3 would probably see a large increase. No. 2 would be preferable over the medium term as only some of the revenue would be used towards this year's target, leaving more for next year and Countryman's targets. As to No 1, well, we saw this week how panic can set in on no news whatsoever, so would a profit warning be treated as a surprise by these people? Or would they forget completely that SRT have promised jam forever and believe that the contracts are coming in?

My money is on number two.

[yump] 22/3/2018 16:24

The boards seem to be a repository for alternative facts. This is like a discussion with someone holding a bible - just quoting the bits they like as they go along.

ADVFN should have an award for the first poster to say 'I'm not sure'.

[yumyum] 22/3/2018 15:20

btw fft, you say 'the directors exercised loads of zero cost options'. Did they exercise options or was it a share award ? The big share awards on reaching 50p were rescinded as far as I understand.

[yumyum] 22/3/2018 15:12

Seems like the profit warning is priced into the shares already, perhaps?

I think £30m turnover next FY is very optimistic, but possible.

[srtshare2] 22/3/2018 12:23

Where are all the doomsters? Are they getting ready to come back in?

[lavalmy] 22/3/2018 11:49

Extrader

Certainly a possibility. However, they didn't expect to use much of the finance, more just in case was the impression. Kuwait should have paid the £4 million odd by now, so the gross cash position should be fine. The £2 million loan note was refinanced in December at 8% for three years, callable at SRT's option.