REG - SRT Marine Systems - Final Results
27/07/2023 07:15
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RNS Number : 3196H SRT Marine Systems PLC 27 July 2023
SRT MARINE SYSTEMS PLC
(AIM: SRT)
("SRT" or the "Company")
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023
SRT Marine Systems PLC, a provider of maritime surveillance, monitoring and
management systems, announces its results for the financial year ending 31
March 2023.
FINANCIAL SUMMARY
· Increased revenues to £30.5m.
· Profit after tax £0.1m.
· £2.2m gross cash at year end. Post year end £5.4m equity raise
and £20m loan note programme headroom increase.
· £160m systems forward contract order book and £1.4bn new
prospects pipeline.
OPERATIONAL HIGHLIGHTS
· Significant transceiver distributor network expansion.
· Continued progress with new NEXUS VHF/AIS radio system and DAS
transceiver products, both of which entered testing phases.
· Expansion of analytics within the SRT-MDA System to improve dark
vessel detection and tracking capabilities.
· Expansion of SRT delivery team to accommodate multiple
simultaneous projects.
NOTICE OF AGM
· The AGM will be held at the Centurion Hotel, Charlton Lane,
Radstock BA3 4BD at 11.00am on September 19, 2023. Prior to the commencement
of the formal AGM there will be an Open Morning at SRT's offices, commencing
at 9.00am.
Commenting on today's results, Simon Tucker, CEO of SRT said:
"Our many years of technology, product and market investments are now starting
to show in our financial results. Our transceivers division grew by 60% and
our systems division is back on track following a pause in government business
during Covid. We go into the new year with an expanded product range and
distribution network, a forward contract order book of £160m and a new
prospects pipeline of system contracts worth approximately £1.4bn. This
position reflects the early strategic decisions made to position SRT at the
centre of these substantial global markets."
Contacts:
SRT Marine Systems plc www.srt-marine.com (http://www.srt-marine.com)
+ 44 (0) 1761 409500
Simon Tucker (CEO) simon.tucker@srt-marine.com (mailto:simon.tucker@srt-marine.com)
Louise Coates (Marketing Manager) louise.coates@srt-marine.com (mailto:louise.coates@srt-marine.com)
finnCap Ltd
Jonny Franklin-Adams / Teddy Whiley (Corporate Finance) +44 (0) 20 7220 0500
Tim Redfern / Charlotte Sutcliffe (Corporate Broking)
About SRT:
SRT Marine Systems PLC is a global company which develops and provides
integrated maritime surveillance, monitoring, management and safety systems
used by coast guards, fishery authorities, infrastructure and vessel owners
for the purposes of managing and controlling their maritime domain.
Applications include security, safety, search & rescue, law enforcement,
fisheries management, illegal fishing detection and environment monitoring.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
CHAIRMAN'S STATEMENT
Whilst not as high as we had hoped, I am pleased to report that we were
profitable on a 273% year on year increase in revenues to £30.5m as our
target markets recovered and recommenced their expansion enabling us to
benefit from our accumulated investments in technologies, products and
customers over many years and enter the new financial year with a £160m
forward order book and substantial new prospects pipeline.
As reported in our year-end trading update in March 2023, year on year group
revenues grew to £30.5m (2022: £8.2m) of which transceivers generated
£12.1m and systems £18.4m. Gross profit margin increased to 36% (2022: 33%),
resulting in a profit after tax of £0.1m (2022: loss £5.8m). As at
year-end, gross cash was £2.2m (2022: £5.9m), and after the year-end we
completed an equity raise of £5.4m and increased our loan note programme
capacity by an additional £20m.
During the period our systems business executed on three projects, two with
coast guards and one with a national fisheries ministry, increased our forward
contract order book to £160m and grew our new prospects pipeline to be worth
an estimated £1.4bn. This growth is driven by the increasing desire of
national agencies to have effective maritime surveillance and intelligence in
line with what has become the norm in air traffic control.
The Philippine BFAR IMEMS system is now fully operational and in daily use,
enabling BFAR to track, monitor and manage all their fisheries within a single
optimised system. This project was originally scheduled to complete in
December 2022, but is now expected to complete during 2023. This delay is a
consequence of COVID where all installation work was suspended for well over a
year due to mandatory travel and work suspensions. We also won and delivered a
small but strategically important project to a national coast guard to enable
the sharing of maritime information between multiple government agencies and
completed the first phase of a £40m SRT-MDA System Vessel Tracking &
Identification systems contract with a major Middle East Coast Guard, the
formal sign-off of which was concluded shortly after our financial year end,
along with preparations for the next and final two phases which are scheduled
to be implemented by the end of 2024.
The SRT-MDA System is a flexible and scalable integrated surveillance system
solution that can be configured for either coast guard or fisheries use. After
many years of continuous development, it offers an extensive range of
innovative functionalities and capabilities that deliver enhanced maritime
domain awareness. I am pleased to report that our development and product team
have continued to enhance existing functionalities and introduce new
capabilities. Of particular note is our focus on multi-sensor and
multi-platform network integration, data fusion and management and intelligent
analytics in the area of automated vessel detection and identification, along
with specialist fisheries functionalities such as aquatic modelling and
electronic catch reporting and auditing. This continuous development of the
SRT-MDA System falls to our expanding development team which we have carefully
built over many years and today combines a rare blend of scale, talent and
experience.
The transceivers division grew year on year by 60% to a turnover of £12.1m,
generating a blended gross profit of 45%, with some product and application
areas generating margins as high as 80% and some 20%. We believe that growth
has come from the compound effect of our reputation for having the best
products, being a reliable supplier, expanding our distribution channels and
the slow but steady rolling adoption and proliferation of AIS across
commercial and leisure vessels. We remain in the early stages of AIS adoption
with an estimated 500,000 vessels out of 26 million now having an AIS device,
and most navigation aids at an even earlier stage. We therefore see very
significant opportunity for steady long-term growth from our transceivers
business driven by the same fundamentals of recent years.
The primary focus of our transceiver development team has been the development
of our NEXUS VHF/AIS product. This product moves SRT into the voice
communications segment of the leisure and commercial marine electronics market
which has much greater volumes than data only AIS due to its greater maturity.
NEXUS is a significant investment for SRT and the project is now in its third
year, with the expectation that it will start commercial shipments in early
2024. In 2023 we decided to delay the commencement of shipping by
approximately up to 9 months to allow for further testing. This decision was
made in the context of our global reputation for excellence and wishing to
enter this new segment with a truly innovative product that matches our
history of reliable and trustworthy products. NEXUS will therefore not
contribute material revenues during the coming financial year, but we do
expect it to make an impact thereafter.
In the meantime, we have seen a significant growth in our distribution network
and have added additional sales and marketing resource, particularly with our
first in-territory presence in the USA, the effects of which we expect to see
in the coming financial year. During the year we soft launched our DAS product
offer and have received a good response with visibility of some substantial
new projects. DAS targets the aids to navigation market which is integral to
the digitisation of the marine domain and the realisation of safer and more
efficient navigation. In the coming year we will invest more in this segment,
including the hiring of a dedicated salesperson.
Shortly after the year end, we signed a new systems contract worth £140m to
deliver an integrated maritime surveillance and intelligence system to a
National Coast Guard increasing our forward systems order book to £160m. This
opportunity was previously in our new systems prospects pipeline, which
continues to grow and now contains prospects at various stages of the sales
cycle with an aggregate value of £1.4bn, and I expect to see some of these
convert into contracts in the coming months In the first half of the new
financial year, we expect to commence the implementation of the next and final
phases of our Middle East project, whilst the newly signed £140m National
Coast Guard contract, with associated revenue milestone completion will
commence first implementation milestones in the second half of the financial
year. As usual, our transceivers business will be more balanced but with the
traditional second half weighting.
In summary, the year has seen both our businesses grow strongly as a result of
our long-term technology, product and market investments that have placed SRT
at the centre of the global digitisation of maritime domain awareness and
navigation. With over 3,000 transceiver distribution partners, established
products, £160m of forward contracts and a pipeline of new prospects that has
grown to £1.4bn, we feel very confident, although not complacent, about the
future. This year really has been operationally tough, with a lot of product
development and sales and contracts work to keep up with market demands, so I
would like to take this opportunity to thank our staff, partners and
shareholders for their hard and diligent work throughout the year.
Kevin Finn, Chairman
26 July 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE YEAR ENDED 31 MARCH 2023
2023 2022
Note
£ £
Revenue 30,506,152 8,172,900
Cost of sales (19,467,188) (5,500,942)
Gross profit 11,038,964 2,671,958
Administrative costs (10,723,838) (8,721,560)
Foreign exchange losses (180,102) (147,754)
Total administrative costs and foreign exchange losses (10,903,940) (8,869,314)
Operating profit / (loss) 135,024 (6,197,356)
Finance expenditure (781,547) (615,648)
Finance income 351 421
Loss before tax (646,172) (6,812,583)
Income tax credit 715,692 974,578
Profit / (loss) for the year after tax 69,520 (5,838,005)
Total comprehensive income / (expense) for the year 69,520 (5,838,005)
Earnings / (loss) per share: 4
Basic 0.04p (3.53)p
Diluted 0.04p (3.53)p
About SRT:
SRT Marine Systems PLC is a global company which develops and provides
integrated maritime surveillance, monitoring, management and safety systems
used by coast guards, fishery authorities, infrastructure and vessel owners
for the purposes of managing and controlling their maritime domain.
Applications include security, safety, search & rescue, law enforcement,
fisheries management, illegal fishing detection and environment monitoring.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
CHAIRMAN'S STATEMENT
Whilst not as high as we had hoped, I am pleased to report that we were
profitable on a 273% year on year increase in revenues to £30.5m as our
target markets recovered and recommenced their expansion enabling us to
benefit from our accumulated investments in technologies, products and
customers over many years and enter the new financial year with a £160m
forward order book and substantial new prospects pipeline.
As reported in our year-end trading update in March 2023, year on year group
revenues grew to £30.5m (2022: £8.2m) of which transceivers generated
£12.1m and systems £18.4m. Gross profit margin increased to 36% (2022: 33%),
resulting in a profit after tax of £0.1m (2022: loss £5.8m). As at
year-end, gross cash was £2.2m (2022: £5.9m), and after the year-end we
completed an equity raise of £5.4m and increased our loan note programme
capacity by an additional £20m.
During the period our systems business executed on three projects, two with
coast guards and one with a national fisheries ministry, increased our forward
contract order book to £160m and grew our new prospects pipeline to be worth
an estimated £1.4bn. This growth is driven by the increasing desire of
national agencies to have effective maritime surveillance and intelligence in
line with what has become the norm in air traffic control.
The Philippine BFAR IMEMS system is now fully operational and in daily use,
enabling BFAR to track, monitor and manage all their fisheries within a single
optimised system. This project was originally scheduled to complete in
December 2022, but is now expected to complete during 2023. This delay is a
consequence of COVID where all installation work was suspended for well over a
year due to mandatory travel and work suspensions. We also won and delivered a
small but strategically important project to a national coast guard to enable
the sharing of maritime information between multiple government agencies and
completed the first phase of a £40m SRT-MDA System Vessel Tracking &
Identification systems contract with a major Middle East Coast Guard, the
formal sign-off of which was concluded shortly after our financial year end,
along with preparations for the next and final two phases which are scheduled
to be implemented by the end of 2024.
The SRT-MDA System is a flexible and scalable integrated surveillance system
solution that can be configured for either coast guard or fisheries use. After
many years of continuous development, it offers an extensive range of
innovative functionalities and capabilities that deliver enhanced maritime
domain awareness. I am pleased to report that our development and product team
have continued to enhance existing functionalities and introduce new
capabilities. Of particular note is our focus on multi-sensor and
multi-platform network integration, data fusion and management and intelligent
analytics in the area of automated vessel detection and identification, along
with specialist fisheries functionalities such as aquatic modelling and
electronic catch reporting and auditing. This continuous development of the
SRT-MDA System falls to our expanding development team which we have carefully
built over many years and today combines a rare blend of scale, talent and
experience.
The transceivers division grew year on year by 60% to a turnover of £12.1m,
generating a blended gross profit of 45%, with some product and application
areas generating margins as high as 80% and some 20%. We believe that growth
has come from the compound effect of our reputation for having the best
products, being a reliable supplier, expanding our distribution channels and
the slow but steady rolling adoption and proliferation of AIS across
commercial and leisure vessels. We remain in the early stages of AIS adoption
with an estimated 500,000 vessels out of 26 million now having an AIS device,
and most navigation aids at an even earlier stage. We therefore see very
significant opportunity for steady long-term growth from our transceivers
business driven by the same fundamentals of recent years.
The primary focus of our transceiver development team has been the development
of our NEXUS VHF/AIS product. This product moves SRT into the voice
communications segment of the leisure and commercial marine electronics market
which has much greater volumes than data only AIS due to its greater maturity.
NEXUS is a significant investment for SRT and the project is now in its third
year, with the expectation that it will start commercial shipments in early
2024. In 2023 we decided to delay the commencement of shipping by
approximately up to 9 months to allow for further testing. This decision was
made in the context of our global reputation for excellence and wishing to
enter this new segment with a truly innovative product that matches our
history of reliable and trustworthy products. NEXUS will therefore not
contribute material revenues during the coming financial year, but we do
expect it to make an impact thereafter.
In the meantime, we have seen a significant growth in our distribution network
and have added additional sales and marketing resource, particularly with our
first in-territory presence in the USA, the effects of which we expect to see
in the coming financial year. During the year we soft launched our DAS product
offer and have received a good response with visibility of some substantial
new projects. DAS targets the aids to navigation market which is integral to
the digitisation of the marine domain and the realisation of safer and more
efficient navigation. In the coming year we will invest more in this segment,
including the hiring of a dedicated salesperson.
Shortly after the year end, we signed a new systems contract worth £140m to
deliver an integrated maritime surveillance and intelligence system to a
National Coast Guard increasing our forward systems order book to £160m. This
opportunity was previously in our new systems prospects pipeline, which
continues to grow and now contains prospects at various stages of the sales
cycle with an aggregate value of £1.4bn, and I expect to see some of these
convert into contracts in the coming months In the first half of the new
financial year, we expect to commence the implementation of the next and final
phases of our Middle East project, whilst the newly signed £140m National
Coast Guard contract, with associated revenue milestone completion will
commence first implementation milestones in the second half of the financial
year. As usual, our transceivers business will be more balanced but with the
traditional second half weighting.
In summary, the year has seen both our businesses grow strongly as a result of
our long-term technology, product and market investments that have placed SRT
at the centre of the global digitisation of maritime domain awareness and
navigation. With over 3,000 transceiver distribution partners, established
products, £160m of forward contracts and a pipeline of new prospects that has
grown to £1.4bn, we feel very confident, although not complacent, about the
future. This year really has been operationally tough, with a lot of product
development and sales and contracts work to keep up with market demands, so I
would like to take this opportunity to thank our staff, partners and
shareholders for their hard and diligent work throughout the year.
Kevin Finn, Chairman
26 July 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR
THE YEAR ENDED 31 MARCH 2023
Note
2023
2022
£
£
Revenue
30,506,152
8,172,900
Cost of sales
(19,467,188)
(5,500,942)
Gross profit
11,038,964
2,671,958
Administrative costs
(10,723,838)
(8,721,560)
Foreign exchange losses
(180,102)
(147,754)
Total administrative costs and foreign exchange losses
(10,903,940)
(8,869,314)
Operating profit / (loss)
135,024
(6,197,356)
Finance expenditure
(781,547)
(615,648)
Finance income
351
421
Loss before tax
(646,172)
(6,812,583)
Income tax credit
715,692
974,578
Profit / (loss) for the year after tax
69,520
(5,838,005)
Total comprehensive income / (expense) for the year
69,520
(5,838,005)
Earnings / (loss) per share:
Basic
4
0.04p
(3.53)p
Diluted
0.04p
(3.53)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
2023 2022
Note £ £
Assets
Non-current assets
Intangible assets 11,756,717 9,368,069
Property, plant and equipment 1,256,223 1,328,842
Total non-current assets 13,012,940 10,696,911
Current assets
Inventories 3,465,626 2,359,922
Trade and other receivables 5,828,652 3,847,735
Current tax recoverable 968,607 978,963
Cash 2,181,548 5,924,601
Restricted cash 949,115 906,245
Total current assets 13,393,548 14,017,466
Liabilities (7,009,926) (6,459,635)
Current liabilities
Trade and other payables
Borrowings 5 (8,002,500) (7,245,000)
Current tax liabilities (199,126) -
Lease liabilities (237,371) (201,402)
Total current liabilities (15,448,923) (13,906,037)
Net current (liabilities) / assets (2,055,375) 111,429
Total assets less current liabilities 10,957,565 10,808,340
Non-current liabilities
Borrowings 5 - (312,500)
Lease liabilities (649,946) (703,317)
Total non-current liabilities (649,946) (1,015,817)
Net assets 10,307,619 9,792,523
Shareholders' equity
Share capital 181,517 180,677
Share premium account 18,213,072 18,067,612
Retained loss (13,577,566) (13,946,362)
Other reserves 5,490,596 5,490,596
Total shareholders' equity 10,307,619 9,792,523
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2023
2023 2022
£ £
Cash generated from operating activities 778,840 1,405,136
Corporation tax received 925,174 789,217
Net cash generated from operating activities 1,704,014 2,194,353
Investing activities
Expenditure on product development (4,795,292) (3,327,011)
Purchase of property, plant and equipment (199,061) (183,802)
Interest received 351 421
Net cash used in investing activities (4,994,002) (3,510,392)
Financing activities
Gross proceeds on issue of shares 146,300 4,919,130
Costs of issue of shares - (266,828)
New loans issued 1,695,000 1,000,000
Loan repayments (1,250,000) (1,957,500)
Lease repayments (258,835) (267,458)
Loan interest paid (742,660) (566,891)
Net cash (used in) / generated from financing activities (410,195) 2,860,453
Net (decrease) / increase in cash and cash equivalents
(3,700,183) 1,544,414
Net cash and cash equivalents at beginning of year 6,830,846 5,286,432
Net cash and cash equivalents at end of year 3,130,663 6,830,846
Notes
1. Status of financial information
SRT is a public limited company incorporated in England and Wales whose
ordinary shares of 0.1p each are traded on the AIM Market of the London Stock
Exchange. The Company's registered office is Wireless House, Westfield
Industrial Estate, Midsomer Norton, Bath BA3 4BS.
The Board of Directors approved this preliminary announcement on 26 July 2023.
This announcement does not itself contain sufficient information to comply
with all the disclosure requirements of IFRS and does not constitute statutory
accounts of the Company for the years ended 31 March 2023 or 31 March 2022.
The financial information has been extracted from the statutory accounts of
the Company for the years ended 31 March 2023 and 31 March 2022. The report of
the auditors on those statutory accounts was unqualified and did not contain a
statement under section 498(2) or (3) of the Companies Act 2006. The audit
reports for the years ended 31 March 2023 and 2022 drew attention by way of
emphasis to a material uncertainty relating to going concern and
recoverability of certain assets.
The statutory accounts for the year ended 31 March 2022 have been delivered to
the Registrar of Companies, whereas those for the year ended 31 March 2023
will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
2. Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
international accounting standards. For the purposes of the preparation of
the consolidated financial information, the Group has applied all standards
and interpretations that are effective for accounting periods beginning on or
after 1 April 2022. The financial information has been prepared under the
historical cost convention unless otherwise stated.
3. Dividends
The Board is not recommending the payment of a final dividend.
4. Earnings / (loss) per ordinary Share
The basic earnings per share has been calculated on the profit after taxation
of £69,520 (2022: loss £5,838,005) divided by the weighted number of
ordinary shares in issue of 180,961,021 (2022: 165,167,407).
During the year the calculation of diluted earnings per share has been
calculated on profit on ordinary activities after taxation of £69,520. It
assumes conversion of all potentially dilutive ordinary shares, all of which
arise from share options. A calculation is performed to determine the number
of shares that could have been acquired at fair value, based upon the monetary
value of subscription rights to outstanding share options. The number of
dilutive shares under option was 1,958,724 and the weighted average number of
ordinary shares for the purposes of dilutive earnings per share was
182,919,745.
During the previous year, the Group incurred a loss on ordinary activities
after taxation and therefore there is no dilution of the impact of the share
options granted.
5. Borrowings
Bank loan
The bank loan (amount owed at 31 March 2023: £312,500) was drawn down in
April 2020 as a £2,500,000 one year loan provided under the UK government
Coronavirus Business Interruption Loan Scheme (CBILS) at an interest rate of
0%. During the previous year, the renewal of this facility has been agreed
with quarterly repayments commencing in July 2021 through to April 2023 at an
interest rate of 2.59% above base rate.
Loan notes
As of 31 March 2023, the outstanding balance of loan notes amounted to
£7,690,000. These all relate to drawdowns on a secured note programme which
has been arranged by LGB Capital Markets and which is secured by a floating
charge over the Group's assets. The loan notes have terms of up to 3 years and
an interest rate of 8%-12%. Subsequent to the year end, the capacity on the
secured note programme has been increased from £20 million to £40 million.
During the year ended 31 March 2023 the covenants in relation to debt service
cover and gearing were breached and a waiver from loan note holders was
obtained subsequent to the year end on May 2 2023. Due to the waiver not being
received prior to the year end and the covenants being re-tested on 30
September 2023, IAS 1 requires that the loans are all classified as being
repayable in less than one year, despite their maturity dates.
6. Annual Report and AGM
The Annual Report will be available from the Company's website,
www.srt-marine.com (http://www.srt-marine.com) once it is published. To
locate the report, click "Investors" and then scroll down the page to "Reports
and Presentations". The Annual Report and Notice of AGM will be posted to
shareholders on 18 August 2023.
The AGM will be held at the Centurion Hotel, Charlton Lane, Radstock BA3 4BD
at 11.00am on September 19, 2023. Prior to the commencement of the formal AGM
there will be an Open Morning at SRT's offices, commencing at 9.00am.
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