Pinned straw:
A nice little announcement by Veem today that Strategic Marine are accelerating the purchase of gyros on their crew boats. Instead of purchasing 12 gyros over three years, they will now purchase all 12 by 30 June 2024.
On the one hand it's not new sales - just accelerated sales, but it's a nice validation of the technology. It's also a welcome cash boost given the likelihood the company will either have to raise capital or increase debt to fund expansion of its propellor manufacturing business and support the Sparrow partnership.
What's a little less certain is what the accelerated sales means for the Strategic Marine exclusivity agreement. Are Veem wholly reliant on Strategic Marine's onsale of gyros in FY25 and FY26? I think I'll ask.
Shares are up 10% today. I'm not sure the announcement below would suggest Veem is now a 10% better business but that's the fun of microcaps.
[Holding]
I was fortunate enough to go on a shareholder site tour of the VEEM demo boat when they had it in Sydney harbour a couple of years ago.
I guess they would not demo this product to landlubbers and shareholders if it did not have a WOW factor but I was amazed how effective these things are.
I've actually spent a bit of time at sea in different size vessels and whatever the physics of these things are, it's amazing what a difference they make.
They were able to switch it on and off to show the difference as the swell came through the heads of Sydney harbour. Caveat being that you can't just switch it on - you need to have it 'warmed up' for about 90 mins from memory (I could be wrong) but can then fairly quickly activate it at pretty short notice.
So I can see why committed buyers would want to accelerate their take up of this once they saw it in action, per @Noddy74's comments on this.
There's some strong business cases - for example deep sea drilling workers traveling to and from site as the fatigue reduction from not rolling so much (i.e. sleeping instead of throwing up) can be an important productivity factor when working in a safety conscious environment.
Most deployments are in leisure craft (think large American game fishing boats off Florida and California) but there's a potentially big market in the commercial space I would think - they think so too but have had trouble with marketing this well as they would like.
They have a strong competitor in the US (Seakeeper) who focuses more on the smaller scale gyros at higher volume but VEEM claim to be the global leader in larger scale gyros with some good evidence to back this up. This has not yet converted to a ramp in sales but maybe we are beginning to see more data points in this direction?
Disc: No longer held.
Yes @Noddy74 it is good to see some momentum finally. Not sure if it was intentional but the propellor deal is with Sharrow Marine not Sparrow ????
My understanding is the exclusivity is for SE Asia and windfarm service vessels in Europe. So still leaves open a number of applications and locations. Hopefully the evidence from on the water boosts sales in these areas.
“VEEM has signed an agreement with Strategic Marine for the exclusive use of small and medium size VEEM gyros for fast crew transfer vessels in the Southeast Asian region and specific windfarm crew vessels in Europe.”
Ha ha @laoshi - yes Sharrow, not Sparrow. I can assure you it was ineptitude, not intentional.
As for the gyros agreement, this is what they said:
I can read that a number of ways, from a very general agreement to a hyper-specific agreement. It probably is - as you say - a more narrow agreement that just covers the ship types and territories Strategic Marine is competing in (and the corresponding sized gyros) but they build ferries and general workboats too so...not sure. I'll ask and see what they say.