I had mentioned an initial figure approaching $6.00 where I would consider selling a small percentage of my holding, Probably, fewer than 5% would be likely.
My target, after several tier 1 airlines have their fleets fitted with sensors, based on the number of shares on issue, after options were exercised, being about 143 million & earnings of $85 million with a P/E of 30 calculates to a share price of $17.83. This, of course, would take several years to occur & be limited by the time it takes to outfit each airline.
What we need to know, is how smart are SMN negotiators in coming up with the best outcome. Hopefully, they can negotiate a license fee of, say, $20,000 per aircraft up to a maximum of 500 aircraft. Additional aircraft would not attract any further license fee. That would attract maximum license fee per tier 1 airline of $10 million p.a. which was a figure mentioned by SMN a number of years ago.
There would also be a huge profit margin on the sale of sensors.
SMN should be able to negotiate charges that represent 10% of the savings of an airline in using the CVM technology.
Is anyone able to come up with the current estimated costs per aircraft, on a per annum basis, that can be saved by using sensors? If we had that information, our expectations would have more chance of being accurate.
SMN Price at posting:
83.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)