REG - Software Radio Tech - Half Yearly Report - Amendment <Origin Href="QuoteRef">SORA.L</Origin>

SRT Marine SystemsAnnouncement

17/11/2014 08:20

RNS Number : 1295X
Software Radio Technology PLC
17 November 2014
The 'Half yearly report for the six months ended 30 September 2014' announcement for Software Radio Technology PLC released on Friday 14 November 2014 at 15:47 under RNS No 1178X has been re-released in the interests of market clarity.
The announcement text is unchanged and is reproduced in full below.
SOFTWARE RADIO TECHNOLOGY PLC
("SRT" or the "Group")
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014
SRT, the AIM-quoted developer and supplier of maritime identification and tracking technologies, announces its unaudited interim results for the six months ended 30 September 2014 (the "Period").
Financial Highlights
 Revenue of 5.4 million, a 71% increase over H1 2013/14
 Profit before tax of 517,000 (H1 2013/14: loss of 434,000)
 Profit after tax of 943,000, as a result of R&D tax credit (H1 2013/14: loss of 434,000)
 Cash of 2.6 million at 30 September 2014
 Stock of 5.0 million valued at cost and manufactured for pending orders
Operational Summary
 Market penetration and market share targets achieved for the Period
 Increasing demand from projects with conversion of major Middle East order and accelerated progression of existing projects
 Considerable pipeline with several new significant opportunities
 Increased revenue sources smoothing overall financial performance
Chairman's Statement
For the six months ended 30 September 2014, revenue and profit before tax were 5.4 million and 517,000 respectively. As at 30 September 2014, the Group had cash of 2.6 million, with drawn down borrowings of 1.0 million and stock valued at cost of 5.0 million, manufactured for pending orders. 
The gross margin for the Period was 55%, reflecting the greater weighting of project business during the Period over lower margin core, OEM and module business. We continue to expect our gross margin to average around 50% over a 12 month period. Group cash overheads, inclusive of administration and research and development costs, but excluding amortisation and depreciation, increased to 2.6 million from 2.0 million in the corresponding period last year. This was due to the impact of the acquisition of SRT Marine System Solutions Ltd (formerly GeoVs Ltd) in October 2013, together with increased investment in new product development.
During the Period, whilst our market penetration and market share targets were achieved, the generally subdued economic landscape resulted in sales derived from the non-mandated leisure and commercial market sectors for onboard AIS transceivers to be below our expectations. However, this segment remains an important opportunity for SRT due to an expected long-term trend of AIS penetration matching that of radar. Our investment in core technology, derivative products and relevant OEM and module customers ensures that sales from this segment will grow with general market demand in the future. 
Demand from existing mandates such as in Russia and the EU Inland Waterways and Fisheries, both of which had final deadlines during calendar year 2014, is expected to be second half weighted due to enforcement schedules and therefore made little contribution during the Period. The long pending USA mandate remains outstanding, but at the time of this statement the scheduled implementation appears likely to start to generate revenues for the Group during the second half.
Driven by a widespread requirement to track and monitor fishing fleets and other small commercial vessels, our project business was focused on the conversion of a major Middle East opportunity during the Period, accelerated progression of most existing project opportunities and the addition of several new opportunities. Most of these are very significant projects and take time to reach their implementation stage and revenue generation for SRT. However, we now have a considerable pipeline of these opportunities, some of which are expected to reach their implementation phase in the near future. Again, our investments in technologies such as ABSEA and GeoVS dynamic 3D visualisation, coupled with established local customers, is now starting to bear fruit as demonstrated by the project conversion during the Period. 
For the first time our fledgling AtoN business started to make meaningful progress in respect of developing a pipeline of sales opportunities through an increasingly established sales network. We have continued to invest in new product development both on the transceiver and display side, as well as commencing a sustained marketing programme to train our customers and educate the market. 
During the second half we expect our core OEM and module business to remain flat, but see our projects and mandates business performing strongly due to existing and new mandates along with the conversion of some significant vessel tracking projects into their implementation phases. We anticipate that AtoN will continue to make steady progress, and the recent launch of the first series of stand-alone GeoVS licences and ABSEA related data sales could see SRT generating its first recurring revenue. 
Finally, we were pleased that during the period the broadening of our revenue sources across multiple market segments have smoothed our overall financial performance. We have delivered a 71% increase in revenues compared to the same period last year despite one of our target segments experiencing a lull in its long-term growth trend. Our leading position within the global AIS market will continue to drive the growth of our company and with a significant pipeline of future opportunities we look forward to a busy second half and beyond. 
Simon Rogers
Chairman
Contacts:



Software Radio Technology plc

Simon Tucker, Chief Executive Officer
+44 (0) 1761 409500

simon.tucker@softwarerad.com
WH Ireland Limited

Tim Feather
Liam Gribben
+44 (0) 113 394 6600


Yellow Jersey PR Limited
Dominic Barretto
www.yellowjerseypr.com
+44 (0)7768 537739
Anna Legge
+44 (0)7747 788221
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014


Six months ended
Six months ended

Year
ended


30 Sep 2014
30 Sep 2013

31 Mar
2014


Unaudited
Unaudited

Audited












Revenue 

5,410,060

3,164,711

6,110,359
Cost of sales

(2,430,584)

(1,666,429)

(3,479,159)
Gross profit
2,979,476
1,498,282
2,631,200
Administrative expenses

(2,462,516)

(1,935,916)

(4,141,823)
Operating profit / (loss)

516,960

(437,634)

(1,510,623)
Investment revenues

162

3,194

4,249
Profit / (loss) before income tax
517,122
(434,440)
(1,506,374)
Income tax credit
3
425,469

-

-
Profit / (loss) for the period

942,591
(434,440)
(1,506,374)
Total comprehensive income / (loss) for the period

942,591
(434,440)
(1,506,374)
Earnings / (loss) per share:
Basic
Diluted
2
2
0.77p
0.75p
(0.37)p
(0.37)p

(1.3)p
(1.3)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2014


As at
As at
As at


30 Sep
30 Sep
31 Mar


2014
2013
2014


Unaudited
Unaudited
Audited



Notes






Assets






Non-current assets






Intangible assets

5,847,995

4,523,541

5,685,301
Property, plant and equipment 

142,963

146,618

185,397
Total non-current assets
5,990,958
4,670,159
5,870,698







Current assets






Inventories

4,990,882

3,275,295

4,170,726
Trade and other receivables

2,824,440

1,745,594

2,620,825
Cash and cash equivalents 

2,651,359

2,184,997

1,290,539
Total current assets
10,466,681
7,205,886
8,082,090







Liabilities






Current liabilities






Trade and other payables

(2,117,881)

(814,487)

(2,023,508)
Financial liabilities

(1,000,000)

-

(1,000,000)







Total current liabilities

(3,117,881)
(814,487)
(3,023,508)

Net current assets

7,348,800
6,391,399
5,058,582







Net assets
13,339,758
11,061,558
10,929,280













Shareholders' equity





Ordinary shares 
4
127,453

115,920

119,003
Share premium 

4,844,989

2,471,121

3,400,538
Other reserves
6
5,490,596

5,490,596

5,490,596
Retained earnings 

2,876,720

2,983,921

1,919,143
Total shareholders' equity
13,339,758
11,061,558
10,929,280
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014


Six months ended
Six months ended

Year ended


30 Sep 2014
30 Sep
2013

31 Mar 2014


Unaudited
Unaudited

Audited





Notes














Cash generated from operating activities
5
491,341

1,426,010

509,013
Corporation tax received 

425,469

-

-
Net cash generated from operating activities
916,810
1,426,010
509,013







Investing activities






Expenditure on product development

(999,892)

(705,661)

(1,596,901)
Cash acquired

-

-

1,973
Purchase of property, plant and equipment

(9,161)

(73,922)

(163,171)
Interest received

162

3,194

4,249
Net cash used in investing activities
(1,008,891)
(776,389)
(1,753,850)
Cash (outflow) / inflow before financing
(92,081)
649,621
(1,244,837)






Financing activities






Short term loan

-

-

1,000,000
Net proceeds from issue of ordinary share capital

1,452,901

-

-
Net cash generated from financing activities
1,452,901
-
1,000,000
Net increase / (decrease) in cash and cash equivalents
1,360,820
649,621
(244,837)
Cash and cash equivalents at beginning of period

1,290,539

1,535,376

1,535,376
Cash and cash equivalents at end of period
2,651,359
2,184,997
1,290,539
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2014

Share
Capital
Share
Premium
Retained Earnings
Other Reserves
Total









Balance at 31 March 2013
115,920
2,471,121
3,401,211
5,490,596
11,478,848





Comprehensive loss for the period
-
-
(434,440)
-
(434,440)
Share based payment expense
-
-
17,150
-
17,150












Balance at 30 September 2013
115,920
2,471,121
2,983,921
5,490,596
11,061,558
Comprehensive loss for the period
-
-
(1,071,934)
-
(1,071,934)
Shares issued on acquisition
3,083
929,417
-
-
932,500
Share based payment expense
-
-
7,156
-
7,156






Balance at 31 March 2014
119,003
3,400,538
1,919,143
5,490,596
10,929,280




Issue of equity share capital
8,450
1,512,550
-
-
1,521,000
Costs of issue of equity share capital
-
(68,099)
-
-
(68,099)
Share based payment expense
-
-
14,986
-
14,986


942,591
Comprehensive profit for the period
-
-
942,591
-
942,591









Balance at 30 September 2014
127,453
4,844,989
2,876,720
5,490,596
13,339,758
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Accounting Policies
 
Basis of preparation
The interim financial information in this report has been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 31 March 2015. 
Non-statutory accounts
Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 ("the Act"). The statutory accounts for the year ended 31 March 2014 have been filed with the Registrar of Companies. The report of the auditors on those statutory accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act.
The financial information for the 6 months ended 30 September 2014 and 30 September 2013 is unaudited.
The interim financial statements will be available to download on the Company's website www.softwarerad.com.
Accounting policies
The accounting policies as applied by the group are the same as those applied by the Group in the consolidated financial statements for the year ended 31 March 2014 except that IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint Arrangements' and IFRS 12 'Disclosure of Interests in Other Entities' have been adopted from 1 January 2014. The adoption of these standards has had no material effect on the results of the Group.
2. Earnings per share
The basic earnings per share have been calculated using the profit for the period of 942,591 (six months ended 30 September, 2013 - loss of 434,440; year ended 31 March, 2014 - loss of 1,506,374) divided by the weighted average number of ordinary shares in issue of 123,111,982 (six months ended 30 September, 2013, 115,919,774 and year ended 31 March, 2014 117,355,526). 
During the 6 months ended 30 September 2014, the diluted earnings per share have been calculated using weighted diluted shares of 125,919,549. During the six months ended 30 September 2013 and year ended 31 March 2014 the group has incurred losses for the period and therefore there is no impact of the share options granted on diluted earnings per share. 
3. Income tax credit
 During the period, the Group received income tax credits of 425,469 in respect of its Research and Development activities.
4. Called up share capital


30 Sep
2014
30 Sep 2013

31 Mar 2014


Unaudited
Unaudited

Audited



Allotted: (Ordinary shares of 0.1p each): 

127,453

115,920

119,003






Share capital reconciliation:

Number of shares








Shares outstanding at 31 March 2013 and 30 September 2013

115,919,774







Shares issued on acquisition

3,082,645




Shares outstanding at 31 March 2014

119,002,419







Placing July 2014

8,450,000





Shares outstanding at 30 September 2014

127,452,419




a) The shares issued on acquisition were as consideration for the investment in SRT Marine System Solutions Limited (formerly Geovs Ltd). The shares were issued at a price of 30.25p per share resulting in a total consideration of 932,500.
b) The placing in July 2014 took place at 18p per share raising gross proceeds of 1,521,000 before costs of 68,099.
5. Cash from operations


Six months ended
Six months ended

Year ended


30 Sep 2014
30 Sep 2013

31 Mar 2014


Unaudited
Unaudited

Audited










Operating profit / (loss)
516,960
(437,634)
(1,510,623)
Depreciation of property, plant and equipment

51,595

57,934

118,969
Amortisation of intangible fixed assets

837,198

563,624

1,221,656
Share-based payment charge

14,986

17,150

24,306
(Increase) / decrease in inventories

(820,156)

144,226

(751,205)
(Increase) / decrease in trade and other receivables

(203,615)

1,704,192

829,155
Increase / (decrease) in trade and other liabilities

94,373

(623,482)

576,755
Net cash generated from operations
491,341
1,426,010
509,013
6. Statement of movement in shareholders' equity
Other reserves consist of: Capital Redemption Reserve 2,857 (2013: 2,857), Warrants Reserve 62,400 (2013: 62,400) and Merger Reserve 5,425,339 (2013: 5,425,339). There were no movements during the period.

This information is provided by RNS
The company news service from the London Stock Exchange
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