REG - SRT Marine Systems - Half-year Report
14/11/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221114:nRSN2241Ga&default-theme=true
RNS Number : 2241G SRT Marine Systems PLC 14 November 2022
The information communicated in this announcement contains inside information
for the purposes of the UK Market Abuse Regulations and is dlsclosed in
accordance with the Company's obligations.
SRT MARINE SYSTEMS PLC ("SRT" or the "Group")
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
SRT, the AIM-quoted developer and supplier of maritime surveillance, analytics
and management systems and products announces its unaudited interim results
for the six months ended 30 September 2022 (the "Period").
Financial Highlights
· 300% - year on year H1 period revenue increase to £18.8m (H1
2021 £4.7m).
· 38% - gross profit margin (H1 2021 36%).
· £2.1m - profit after tax (H1 2021 Loss of £3.1m).
Operational Summary
· New NEXUS VHF/AIS radio development enters pre-launch testing.
· Delivery of existing projects accelerating.
· Preparations and planning for major new system projects.
Commenting on today's results, Simon Tucker, CEO of SRT said:
"As we forecast, both our business divisions have performed well, and we
expect this trend to continue going forward driven by fundamental long-term
demand drivers for maritime domain awareness. Our systems business is now busy
delivering on existing projects, preparing for new projects that we expect to
come under contract in H2, as well as progressing a growing list of future
prospects. Despite ongoing component supply issues, our transceivers business
has grown 24%, and our new NEXUS and DAS products are expected to accelerate
this growth from the next year."
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 ("SRT") is a global leader in maritime domain awareness
products and systems. Our solutions integrate multiple technologies, advanced
analytics, innovative digital display systems, logistics and command and
control to provide enhanced maritime surveillance, security, safety and
management for national authorities such as coast guards and fishery
authorities. Applications include coastal and territorial water surveillance
and security, fisheries monitoring, management and IUU detection, search and
rescue, waterway management and aquatic environment monitoring as well as
individual leisure and commercial boat owners.
About SRT:
SRT Marine Systems PLC ("SRT") is a global leader in maritime domain awareness
products and systems. Our solutions integrate multiple technologies, advanced
analytics, innovative digital display systems, logistics and command and
control to provide enhanced maritime surveillance, security, safety and
management for national authorities such as coast guards and fishery
authorities. Applications include coastal and territorial water surveillance
and security, fisheries monitoring, management and IUU detection, search and
rescue, waterway management and aquatic environment monitoring as well as
individual leisure and commercial boat owners.
Chairman's Statement
This has been an excellent start to the current financial year and sets a
clear financial and operational direction for our business that we expect to
continue into the future. The digitisation of the marine domain, from
integrated coastal surveillance systems to environment monitoring and
autonomous navigation has only just begun and our accumulated investments over
many years have placed SRT in a leading position in this global market.
Year on year revenues for the same period grew 300% from £4.7m to £18.8m,
generating a profit after tax of £2.1m, compared to a loss of £3.1m for the
same period last year. Our transceivers business grew 24% year on year
generating £5.2m revenues, with our systems business contributing revenues of
£13.6m compared to £0.5m for the same period last year. It should be noted
that the comparative period (H1-2021) was depressed due to Covid.
Cash balances were £2.4m as at 30(th) September 2022, of which £0.9m was
restricted to support system contract guarantees. As at the period end, we had
substantial receivables of approximately £13.4m, most of which is related to
our systems business. Included in the receivables balance is a significant
amount which was received and banked by way of a government issued cheque from
a systems customer just subsequent to the period end. It is not unusual
(although not always the case) for our government customers to pay us by
cheque, with full cash clearance after banking typically taking between 10 and
90 days depending on the specific customer and country. It is our experience
over many years that our system customers are reliable payers.
Our systems business which provides integrated maritime surveillance and
monitoring systems for coast guards and fisheries was focused on the delivery
of two projects, one in the Philippines with the National Fisheries Ministry
(BFAR) and one in the Middle East with a National Coast Guard which we signed
in January 2022. We are pleased to report that both are progressing well, with
our BFAR project starting to catch up with Covid related implementation
delays, and our Middle East project likely to be completed by the end of 2023
as a result of the customer wanting to proceed with Phases 2 and 3 of the
project in parallel during 2023, which is a year ahead of expectations.
The opportunities for our systems business continue to grow, and the value of
our validated pipeline of new system opportunities now stands at over £600m.
These are prospective contracts for our SRT-MDA System that we have validated
and on which we focus our business development effort. This excludes many
other new opportunities, with both existing and new customers, with whom we
are in discussion, but deem not yet sufficiently mature to include.
Within our validated pipeline there are five sizeable projects with a total
worth of approximately £230m which have been in their final pre-contract
stages for some time whilst their respective final approval and contracting
processes complete. I am pleased to report there has been steady and
consistent engagement with the counterparties and we are optimistic that these
will fall under contract in the coming months. Whilst we are confident, at
this stage we are a passenger on their respective statutory procurement
processes and there is no guarantee that SRT will be contracted within the
indicated timeframe.
Our systems business is built on our internally developed SRT-MDA System
product which is a sophisticated fusion of hardware and software that enables
a fully integrated high performance surveillance system. At the heart of the
system is our GeoVS suite of software, that provides users with a multitude of
sophisticated maritime surveillance and monitoring functionality. The
capabilities of the SRT-MDA System continue to evolve as our development team
pushes forward with our roadmap, with particular focus on areas of customer
relevant differentiation such as data fusion, intelligent analytics and
certain command and control functionalities. This is a process that will
continue and aims to ensures our product offer remains the market leader.
Despite the continuing component supply issues which constrain production, our
transceivers business grew 24% year on year. The reputation of our products
for quality and performance mean that we have been able to increase prices to
offset increased production prices and thus maintain margins, whilst ensuring
we remain a reliable and competitive source supplier to our customers. We
continue to see growing demand from the commercial vessel segment where
existing regulations and are settling into long term renewal cycles which is
augmented by a general trend of adoption of AIS in the commercial vessel
world. We believe that in the coming years most commercial vessels will fit
and operate AIS as standard. In the leisure segment we see a trend for boaters
to travel further afield and thus a desire to acquire AIS as an important
safety item; again, we believe this trend will continue.
Our recently formed Digital Aids-to-Navigation System (DAS) unit within the
transceivers business is focused on aids to navigation (buoys), infrastructure
(bridges, locks, wind turbines etc) and environmental monitoring. Here
specialist complex AIS transceivers, called AIS-AtoN, are used to transmit
live information to vessels and authorities. SRT pioneered the use of AIS for
this purpose, developing the world's first AIS AtoN transceiver many years ago
and today is the world's leading supplier. Today we have a growing network of
distribution partners, and through our DAS initiative increasing direct
engagement with port and waterway authorities. We believe AIS AtoN is central
to the digitisation of marine navigation, and that this, coupled with improved
DAS product packages that are easier for end users to deploy themselves, offer
a very substantial opportunity that we are now targeting. We have taken the
first few steps to do this and seen very good results thus far, with an
expectation of good future growth.
The current primary focus of our transceiver's development team is our NEXUS
combined VHF-DSC/AIS radio. NEXUS is a very innovative product that will bring
a new level of user convenience for maritime voice and data communications and
take SRT into a new and larger commercial and leisure marine electronics
segment. NEXUS is now in its test and approval phase, which due to our
extremely rigorous focus on product quality we expect to take at least a
further 6 to 9 months to complete. Therefore we forecast that we will start
delivering NEXUS products to customers in the summer of 2023.
These results are now starting to show the benefits of the significant
technology, product and market investments we have made over many years. The
marine domain remains one where there is a significant gap in knowledge and
these new technologies enable that gap to be filled, resulting in long-term
growing demand for our products across the globe. There will undoubtedly be
challenges along the way as is the nature with large system contracts with
governments and complex electronics and systems. However, over the years we
have built a great team and accumulated significant sector knowledge such that
we are able to maximise the opportunities that the digitising of the marine
domain presents. Most importantly, I would like to thank our staff, partners,
customers and shareholders for the continued hard work and support as we
continue to build SRT into a world class company.
Kevin Finn
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Six months ended Six months ended Year
ended
30 Sep 2022 30 Sep 2021 31 Mar
2022
Unaudited Unaudited Audited
Notes £ £ £
Revenue 18,836,044 4,703,107 8,172,900
Cost of sales (11,633,644) (2,995,675) (5,500,942)
Gross profit 7,202,400 1,707,432 2,671,958
Administrative costs (4,742,197) (4,544,238) (8,869,314)
Operating profit / (loss) 2,460,203 (2,836,806) (6,197,356)
Finance expenditure (337,628) (291,599) (615,648)
Finance income 137 381 421
Profit / (loss) before income tax 2,122,712 (3,128,024) (6,812,583)
Income tax credit - - 974,578
Profit / (loss) for the period 2,122,712 (3,128,024) (5,838,005)
Total comprehensive profit / (loss) for the period 2,122,712 (3,128,024) (5,838,005)
Earnings / (loss) per share:
Basic 2 1.17 (1.91)p (3.53)p
Diluted 2 1.16 (1.91)p (3.53)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
As at As at As at
30 Sep 30 Sep 31 Mar
2022 2021 2022
Unaudited Unaudited Audited
Notes £ £ £
Assets
Non-current assets
Intangible assets 10,705,675 8,542,558 9,368,069
Property, plant and equipment 1,287,004 1,553,099 1,328,842
Tax asset - 793,602 -
Total non-current assets 11,992,679 10,889,259 10,696,911
Current assets
Inventories 2,672,582 2,352,351 2,359,922
Trade and other receivables 13,434,163 2,840,470 3,847,735
Current tax recoverable 978,963 - 978,963
Cash 1,522,079 1,998,747 5,924,601
Restricted cash 906,245 - 906,245
Total current assets 19,514,032 7,191,568 14,017,466
Liabilities
Current liabilities
Trade and other payables (11,592,880) (1,862,600) (6,459,635)
Borrowings 3 (3,962,500) (6,530,000) (7,245,000)
Lease liabilities (223,137) (239,067) (201,402)
Total current liabilities (15,778,517) (8,631,667) (13,906,037)
Net current assets / (liabilities) 3,735,515 (1,440,099) 111,429
Total assets less current liabilities 15,728,194 9,449,160 10,808,340
Long term liabilities
Borrowings 3 (2,985,000) (937,500) (312,500)
Lease liabilities (704,026) (770,383) (703,317)
Total long term liabilities (3,689,026) (1,707,883) (1,015,817)
Net assets 12,039,168 7,741,277 9,792,523
Shareholders' equity
Share capital 4 180,677 164,282 180,677
Share premium account 18,067,612 13,441,305 18,067,612
Other reserves 5,490,596 5,490,596 5,490,596
Retained loss (11,699,717) (11,354,906) (13,946,362)
Total shareholders' equity 12,039,168 7,741,277 9,792,523
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Six months ended Six months ended Year ended
30 Sep 2022 30 Sep 31 Mar 2022
2021
Unaudited Unaudited Audited
Notes £ £ £
Cash (used in) / generated from operating activities 5 (794,348)
(202,248) 1,405,136
Corporation tax received - - 789,217
Net cash (used in) / generated from operating activities
(794,348) (202,248) 2,194,353
Investing activities
Expenditure on product development (2,483,961) (1,499,267) (3,327,011)
Purchase of property, plant and equipment
(57,955) (143,081) (183,802)
Interest received 137 381 421
Net cash used in investing activities (2,541,779) (1,641,967) (3,510,392)
Financing activities
Gross proceeds on issue of shares - 9,600 4,919,130
Costs of issue of shares - - (266,828)
New loans issued 15,000 - 1,000,000
Loan repayments (625,000) (1,047,500) (1,957,500)
Lease repayments (139,323) (139,691) (267,458)
Loan interest paid (317,072) (265,879) (566,891)
Net cash (used in) / generated from financing activities (1,066,395) (1,443,470)
2,860,453
Net (decrease) / increase in cash and cash equivalents
(4,402,522) (3,287,685) 1,544,414
Net cash and cash equivalents at beginning of period
6,830,846 5,286,432 5,286,432
Net cash and cash equivalents at end of period
2,428,324 1,998,747 6,830,846
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
Share Share Retained Earnings Other Reserves Total
Capital Premium
£ £ £ £ £
At 31 March 2021 164,252 13,431,735 (8,362,800) 5,490,596 10,723,783
Total comprehensive loss for the period - - (3,128,024) - (3,128,024)
Share based payment charge - - 135,918 - 135,918
Issue of equity share capital 30 9,570 - - 9,600
At 30 September 2021 164,282 13,441,305 (11,354,906) 5,490,596 7,741,277
- - (2,709,981) - (2,709,981)
Total comprehensive loss for the period
Share based payment charge - - 118,525 -
118,525
Issue of equity share capital 16,395 4,893,135 - 4,909,530
Cost of issue of equity share capital - (266,828) - (266,828)
At 31 March 2022 180,677 18,067,612 (13,946,362) 5,490,596 9,792,523
- - 2,122,712 - 2,122,712
Total comprehensive profit for the period
Share based payment charge - - 123,933 - 123,933
At 30 September 2022 180,677 18,067,612 (11,699,717) 5,490,596 12,039,168
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 United Kingdom. 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 UK Endorsement Board. The financial
information has been prepared on the basis of IFRS that the Directors expect
to be adopted by the UK Endorsement Board and applicable as at 31 March 2023.
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 2022 have been filed
with the Registrar of Companies. 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 report drew attention by way of
emphasis to a material uncertainty relating to going concern.
The financial information for the six months ended 30 September 2022 and 30
September 2021 is unaudited. The interim financial statements will be
available to download on the Company's website www.srt-marine.com
(http://www.srt-marine.com) from 14 November 2022.
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 2022.
2. Earnings / (loss) per share
The basic earnings / (loss) per share has been calculated using the profit for
the period of £2,122,712 (six months ended 30 September 2021 - loss of
£3,128,024, year ended 31 March 2022 - loss of £5,838,005) divided by the
weighted average number of ordinary shares in issue of 180,676,939 (six months
ended 30 September 2021 - 164,252,431 and year ended 31 March 2022 -
165,167,407).
During the period the calculation of diluted earnings per share has been
calculated on profit for the period of £2,122,712. 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 to be
issued for no consideration. The number of dilutive shares under option was
1,787,866 and the weighted average number of ordinary shares for the purposes
of dilutive earnings per share was 182,464,805.
During the period ended 30 September 2021 and the year ended 31 March 2022,
the Group has incurred losses for the periods and therefore there is no impact
of the share options granted on diluted earnings per share.
3. Financial liabilities
30 Sep 2022 30 Sep 2021 31 Mar 2022
Unaudited Unaudited Audited
£ £ £
Less than one year:
Bank loan 937,500 1,250,000 1,250,000
Other loan 3,025,000 5,280,000 5,995,000
Total 3,962,500 6,530,000 7,245,000
More than one year:
Bank loan - 937,500 312,500
Other loan 2,985,000 - -
Total 2,985,000 937,500 312,500
The bank loan was drawn down in April 2020 as a one year loan
provided under the UK government Coronavirus Business Interruption Loan Scheme
(CBILS) at an interest rate of 0%. During the year ended 31 March 2022, the
renewal of this facility was agreed with quarterly repayments commencing in
July 2021 through to April 2023 at an interest rate of 2.59% above base rate
Other loans all relate to drawdowns on a £20 million secured
loan note programme which has been arranged by LGB Capital Markets and which
is secured by a floating charge over the Group's assets. In total, the group
has outstanding headroom of £5,900,000 on the available £20 million. The
loans have terms of up to 3 years and interest rates of 8-10%.
During the previous period and year, a covenant in relation
to debt service cover was breached and a waiver from loan note holders was
obtained shortly after the period/year end. Due to the waiver not being
received prior to the period/year end, IAS 1 requires that the loans are
classified as being repayable in less than one year.
4. Share capital
30 Sep 30 Sep 2021 31 Mar 2022
2022
Unaudited Unaudited Audited
£ £ £
Allotted:
Ordinary shares of 0.1p each 180,677 164,282 180,677
Reconciliation of movement in share capital Number of shares
Shares outstanding at 31 March 2021
164,251,939
Exercise of share options
(a)
30,000
Shares outstanding at 30 September 2021 164,281,939
Share placing March 2022
(b)
16,365,000
Exercise of share options
(c)
30,000
Shares outstanding at 31 March 2022
and 30 September 2022
180,676,939
Notes:
a) 30,000 share options were exercised at a price of 32p in
September 2021
b) The placing in March 2022 took place at 30p per share raising
gross proceeds of £4,909,500 before costs of £266,828
c) 30,000 share options were exercised at a price of 0.1p in January
2022
5. Cash (used in) / generated from operating activities
Six months ended Six months ended Year ended
30 Sep 2022 30 Sep 2021 31 Mar 2022
Unaudited Unaudited Audited
£ £ £
Operating profit / (loss) 2,460,203 (2,836,806) (6,197,356)
Depreciation of property, plant and equipment
241,005 278,494 543,472
Amortisation of intangible fixed assets 1,146,354 1,230,879 2,233,112
Share-based payment charge 123,933 135,918 254,443
(Increase) / decrease in inventories (312,660) 15,933 8,361
(Increase) / decrease in trade and other receivables
(9,586,428) 759,717 (247,548)
Increase / (decrease) in trade and other liabilities
5,133,245 213,617 4,810,652
Net cash (used in) / generated from operating activities
(794,348) (202,248) 1,405,136
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFFSILSLVLIFRecent news on SRT Marine Systems
See all newsREG - SRT Marine Systems - Response to reports in Philippine press
AnnouncementREG - SRT Marine Systems - Change of Year End and Business Update
AnnouncementREG - SRT Marine Systems - Holding(s) in Company
AnnouncementREG - SRT Marine Systems - Holding(s) in Company
AnnouncementREG - SRT Marine Systems - Result of General Meeting and Total Voting Rights
Announcement