REG - SRT Marine Systems - Half Year Trading Update
27/03/2025 07:15
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RNS Number : 3994C SRT Marine Systems PLC 27 March 2025
The information communicated in this announcement contains inside information
for the purposes of the UK Market Abuse Regulations and is disclosed in
accordance with the Company's obligations.
SRT MARINE SYSTEMS PLC ("SRT" or the "Group")
HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
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 31 December 2024 (the "Period"). The comparative for
the results was the interim period to 30 September 2023, prior to the Group's
change of year end.
Financial Highlights
· Significant increase in revenues to £26.2m (H1 2023: £5.5m).
· 46% gross profit margin (H1 2023: 37%).
· £2.8m profit before tax and non-cash exceptional finance charge
of £0.7m (H1 2023: Loss before tax £4.6m).
· $213m contract with the Kuwait Ministry of Interior to deliver an
integrated SRT maritime surveillance system signed and commenced delivery in
the period.
· Cash at 31 December 2024 of £4.5m (H1 2023: £3.9m) with
receivables of £32.5m, most of which were paid shortly after period end.
Operational Summary
· Five active nation state customers for the SRT-MDA System.
· £320m systems under contract. £1.2bn of new prospects.
· Expansion of systems delivery team to sustain future growth.
· NEXUS type approved and in final test and smoothing phase prior
to shipping.
Commenting on today's results, Simon Tucker, CEO of SRT said:
"I am delighted with our operational and financial performance during the
first half which is rooted in many years of hard work to build up our
technologies, products and global market position. As we expected we have seen
solid revenues from both transceivers and systems divisions and look forward
to continued growth into H2 and the years ahead."
For further information, please contact:
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)
Kevin Finn (Chairman) Kevin.finn@srt-marine.com (mailto:Kevin.finn@srt-marine.com)
Cavendish Capital Markets Limited (NOMAD & Broker)
Jonny Franklin-Adams / Teddy Whiley / Finn Gordon (Corporate Finance) +44 (0) 20 7220 0500
Tim Redfern / Ondraya Swanson (Corporate Broking)
Yellow Jersey PR
Charles Goodwin / Annabelle Wills +44 (0)774 7788 221
srt@yellowjerseypr.com (mailto:srt@yellowjerseypr.com)
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
I am pleased to report a successful start to our financial year, with both our
transceiver and systems businesses on track and benefiting from our
accumulated investments in technology, product and markets. With a substantial
forward systems contract order book of £320m and a new transceiver product to
start shipping in the near future, the Board is optimistically looking forward
to the second half and the years ahead.
Group revenues for the first half were £26.2m, generating a £2.8m profit
before tax and an exceptional non-cash finance charge. The exceptional
non-cash finance charge of £0.7m has been accounted for in the period in
respect of 20m warrants granted to an investor in exchange for the provision
of a project performance bond, resulting in an overall profit before tax of
£2.1m
Gross cash balances as at 31(st) December 2024 were approximately £22.4m,
including £17.9m of restricted cash held in escrow against project bonds.
Trade and other receivables at period end amounted to £32.5m, most of which
were paid shortly after the period end. During the period the Group completed
an equity raise of £9.5m and issued loan notes of £3.8m to provide working
capital for its systems projects. Furthermore, it received a short-term loan
amounting to £17m from an existing shareholder, Ocean Infinity Group Limited,
to finance a bank guarantee required for a systems project signed during the
period. This loan has been repaid after the period end as the cash backed
guarantee was replaced with a bank guarantee on Ocean Infinity's behalf.
Our profitable transceivers business which provides marine navigation safety
devices generated revenues of approximately £4.5m with a gross profit margin
of 45% blended across all product segments. NEXUS, our new VHF/AIS
communications system reached pre-production and type approval certification
with initial units released to a selected test set of dealers and users to
enable us to refine user functionalities prior to commencement of general
shipping expected during H2 with our network of approximately 5,000
distribution partners.
In H2 we expect to see relatively similar levels of transceiver sales when
compared to last year, reflecting the normalising of market pricing and a
general lull in the boating market due to general economic nervousness which
is delaying purchase decisions and new boat deliveries. However, we do see
opportunities for short term upside and the long-term market opportunity for
our transceivers business is significant, underpinned by a growing list of
regulations, national mandates, and the long-term trend to digitise and
integrate marine navigation. Of particular note is our high margin DAS
division where business development focus over the last few years has seen the
build-up of a number of opportunities as waterway navigation digitises. We
are using our core technologies to develop and deliver compelling solutions
such as NEXUS to specific market segments. We have received an exceptional
market response to this product from our distribution partners with a build-up
of a forward order book. NEXUS is complementary and accretive to our existing
portfolio and takes us into new and larger market segments. Given our
established position in the global marine electronics market and the potential
for NEXUS to be a disruptive product due to its new functionalities, it is
important that functionality is very refined from day one. To that end we are
taking the necessary testing and refinement time to get these details right
prior to wide scale shipping and we expect this to happen towards the end of
H2.
Our systems business which provides the sophisticated SRT-MDA integrated Ai
driven C5iSR maritime surveillance system to sovereign agencies such as Coast
Guards and Fishing Agencies generated revenues of approximately £21.7m. This
was derived from four separate customers, three of which are existing
customers and came from follow on projects and one of which is a new customer
systems project signed in October 2024, worth $213m. During the period our
systems business signed a total of four new system contracts and received a
formal notice of award for a fifth which we subsequently contracted in January
2025. The €167m MDA system contract with Bakamla in Indonesia which we
signed in May 2023 has been awaiting the completion of a UK to Indonesia
inter-government loan. I am pleased to report that the Loan Agreement has now
been signed, and as of this report the final condition precedents required to
activate the loan are near to completion. Whilst we are largely a passive
observer of the loan process, we are a close observer and thus are confident
we shall be commencing this project shortly with first deliveries scheduled
for H2.
As such going into H2, our systems business has £320m of active system
projects all of which are scheduled for implementation over the coming 2
years, and some of which then have ongoing support contract periods of between
5 and 10 years. This will provide the Company with long term recurring
revenues from data and support services.
The future of our systems business is increasingly bright, driven by a
long-term global trend of sovereigns wanting to digitise and dramatically
enhance their understanding, oversight and management of their marine domains.
In addition to our system contract order book, we have a validated new
contract prospect pipeline of opportunities from existing and new customers
worth up to £1.2bn, some of which customers are indicating they could proceed
to contract before the end of calendar year 2025. As the global leader in this
growing market with proven technologies, products and all-important
references, we expect to continue to convert and grow this pipeline as the
market for maritime domain awareness continues to develop.
Our large forward contract order book of approximately £320m, combined with a
developing global market for our technologies which are underpinned by
fundamental factors such as national security, navigation safety and marine
environment protection and sustainability, all mean we are optimistic about H2
and the years ahead.
Kevin Finn
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Six months ended Six months ended 15 months
ended
31 Dec 2024 30 Sep 2023 30 June
2024
Unaudited Unaudited Audited
Notes £ £ £
Revenue 26,203,635 5,502,316 14,814,532
Cost of sales (14,129,320) (3,441,404) (10,612,259)
Gross profit 12,074,315 2,060,912 4,202,273
Administrative costs (8,468,392) (6,268,250) (17,393,882)
Operating profit / (loss) 3,605,923 (4,207,338) (13,191,609)
Finance costs
(1,622,018) (411,355) (1,253,090)
Broken down as:
Finance expenditure excluding exceptional item
Non-cash exceptional finance cost (944,340) (411,355) (1,253,090)
6 (677,678) - -
Finance income 123,023 13 44,073
2,106,928 (4,618,680) (14,400,626)
Profit / (loss) before income tax
Income tax credit - - 746,807
Profit / (loss) for the period 2,106,928 (4,618,680) (13,653,819)
Total comprehensive profit / (loss) for the
period 2,106,928 (4,618,680) (13,653,819)
Earnings / (loss) per share:
Basic 2 0.93p (2.47)p (6.76)p
Diluted 2 0.92p (2.47)p (6.76)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024 As at As at As at
31 Dec 30 Sep 30 June
2024 2023 2024
Unaudited Unaudited Audited
Notes £ £ £
Assets
Non-current assets
Intangible assets 15,033,129 12,989,804 14,170,410
Property, plant and equipment 1,109,108 1,246,425 1,131,528
Total non-current assets 16,142,237 14,236,229 15,301,938
Current assets
Inventories 6,980,222 4,304,490 8,050,899
Trade and other receivables 32,475,688 4,268,348 2,355,402
Current tax recoverable 831,164 973,188 831,085
Cash 4,474,859 3,930,126 2,777,083
Restricted cash 17,945,770 949,115 949,115
Total current assets 62,707,703 14,425,267 14,963,584
Liabilities
Current liabilities
Trade and other payables (21,910,683) (7,189,712) (3,807,712)
Borrowings 3 (30,088,427) (9,690,000) (10,711,673)
Lease liabilities (224,594) (250,840) (241,098)
Total current liabilities (52,223,704) (17,130,552) (14,760,483)
Net current assets / (liabilities) 10,483,999 (2,705,285) 203,101
Total assets less current assets 26,626,236 11,530,944 15,505,039
Long-term liabilities
Borrowings 3 (2,164,927) - (2,955,864)
Lease liabilities (411,943) (638,159) (496,003)
Total long-term liabilities (2,576,870) (638,159) (3,451,867)
Net assets 24,049,366 10,892,785 12,053,172
Shareholders' equity
Share capital 4 249,863 192,428 222,634
Share premium account 42,178,358 23,245,908 33,179,666
Other reserves 6,168,274 5,490,596 5,490,596
Retained loss (24,547,129) (18,036,147) (26,839,724)
Total shareholders' equity 24,049,366 10,892,785 12,053,172
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Six months ended Six months ended 15 months ended
31 Dec 2024 30 Sep 30 Jun 2024
2023
Unaudited Unaudited Audited
Notes £ £ £
Cash used in operating activities 5 (5,546,593) (1,683,914) (13,277,621)
Corporation tax (paid)/ received - (203,707) 685,205
Net cash used in operating activities (5,546,593) (1,887,621) (12,592,416)
Investing activities
Expenditure on product development (2,260,381) (2,494,889) (5,732,755)
Purchase of property, plant and equipment
(171,843) (83,042) (267,865)
Interest received 123,023 13 44,073
Net cash used in investing activities (2,309,201) (2,577,918) (5,956,547)
Financing activities
Gross proceeds on issue of shares 9,530,000 5,408,231 15,947,332
Costs of issue of shares (504,079) (364,484) (939,621)
New loans issued 20,996,655 2,000,000 7,190,020
Loan repayments (2,410,837) (312,500) (1,524,983)
Lease repayments (132,103) (124,357) (319,848)
Loan interest paid (929,411) (392,773) (1,208,402)
Net cash generated from financing activities 26,550,225 6,214,117
19,144,498
Net increase in cash and cash equivalents
18,694,431 1,748,578 595,535
Net cash and cash equivalents at beginning of period
3,726,198 3,130,663 3,130,663
Net cash and cash equivalents at end of period
22,420,629 4,879,241 3,726,198
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Share Share Retained Earnings Other Reserves Total
Capital Premium
£ £ £ £ £
At 31 March 2023 181,517 18,213,072 (13,577,566) 5,490,596 10,307,619
- - (4,618,680) - (4,618,680)
Total comprehensive loss for the period
Share based payment charge - options
- - 160,099 - 160,099
Issue of equity share capital 10,911 5,397,320 - - 5,408,231
Cost of issue of shares - (364,484) - - (364,484)
At 30 September 2023 (unaudited) 192,428 23,245,908 (18,036,147) 5,490,596
10,892,785
Total comprehensive loss for the period - - (9,035,139) - (9,035,139)
Share based payment charge - options
- - 231,562 - 231,562
Issue of equity share capital 30,206 10,508,895 - - 10,539,101
Cost of issue of shares - (575,137) - - (575,137)
At 30 June 2024 222,634 33,179,666 (26,839,724) 5,490,596
12,053,172
Total comprehensive profit for the period - - 2,106,928 - 2,106,928
Share based payment charge - options
- - 185,667 - 185,667
Warrants charge - - - 677,678 677,678
Issue of equity share capital 27,229 9,502,771 - - 9,530,000
Cost of issue of shares - (504,079) - - (504,079)
At 31 December 2024 (unaudited) 249,863 42,178,358 (24,547,129) 6,168,274
24,049,366
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Accounting Policies
Basis of preparation
The Group has not applied IAS34 Interim Financial Reporting, which is not
mandatory for UK AIM listed companies, in the preparation of this half yearly
report.
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 30 June 2025.
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 15 months ended 30 June 2024 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 an emphasis of matter paragraph in relation to the
recoverability of intangible assets, investment value, intercompany debtors,
goodwill and inventory.
The financial information for the six months ended 31 December 2024 and 30
September 2023 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 27 March 2025.
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 15 months ended
30 June 2024.
2. Earnings / (loss) per share
The basic earnings / (loss) per share has been calculated using the profit for
the period of £2,106,928 (six months ended 30 September 2023 - loss of
£4,618,680, 15 months ended 30 June 2024 - loss of £13,653,819) divided by
the weighted average number of ordinary shares in issue of 226,777,564 (six
months ended 30 September 2023 - 187,174,103 and 15 months ended 30 June 2024
- 202,114,658).
During the period, the calculation of diluted earnings per share has assumed
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 at 31 December 2024 was 2,058,370 and the weighted average number of
ordinary shares for the purposes of dilutive earnings per share was
228,600,072.
During the period ended 30 September 2023 and 15 months ended 30 June 2024,
the Group incurred a loss for the period and therefore there is no impact of
the share options granted on diluted earnings per share.
3. Borrowings
31 Dec 2024 30 Sep 2023 30 June 2024
Unaudited Unaudited Audited
£ £ £
Less than one year:
Bank loan - 2,000,000 1,500,000
Loan notes 11,610,000 7,690,000 7,830,000
Equipment loan 1,481,773 - 1,381,673
Investor loan 16,996,654 - -
Total 30,088,427 9,690,000 10,711,673
More than one year:
Loan notes 490,000 - 490,000
Equipment loan 1,674,927 - 2,465,864
Total 2,164,927 - 2,955,864
The bank loan was drawn down in September 2023 as a
short-term loan provided under the UK Government Recovery Loan Scheme (RLS) at
an interest rate of 3.5% above base rate. It was repaid during the six months
ended 31 December 2024.
Loan notes relate to drawdowns on a secured note programme
which has been arranged by LGB Capital Markets. The loan note liabilities are
secured by a floating charge over the Group's assets. The loans have terms of
up to 3 years and interest rates of 8-12%.
During the 15 months ended 30 June 2024, an equipment loan of
£4,145,020 was drawn in respect of purchases for a systems project. The loan
is repayable in quarterly instalments over a 3-year period with an interest
rate of 4%.
On 28(th) October 2024, an existing shareholder, Ocean
Infinity Group Limited provided a $21.4m guarantee to enable the group to
issue a performance bond of a similar value in respect of a project contract
worth $213m which was signed on 30(th) October 2024. This guarantee was
initially provided as a cash loan of $21.4m at an interest rate of 0.75% per
month. After the period end the loan was repaid as the guarantee was replaced
with a bank guarantee on Ocean Infinity's behalf. The intention is to replace
this bank guarantee with a combination of SRT's own cash resources and the
UKEF guarantee program. In return for providing this guarantee, Ocean Infinity
has been granted 20,000,000 warrants at a strike price of 35p, with an
exercise period of 3 years - see note 6.
4. Share capital
31 Dec 30 Sep 2023 30 June 2024
2024
Unaudited Unaudited Audited
£ £ £
Allotted:
Ordinary shares of 0.1p each 249,863 192,428 222,634
Reconciliation of movement in share capital Number of shares
Shares issued at September 2023
192,427,939
Exercise of share options (a)
206,000
Share placing December 2023 / January 2024 (b) 30,000,147
Shares issued at 30 June 2024
222,634,086
Placing of shares (c)
___ 27,228,570
Shares issued at 31 December 2024 _ 249,862,656
Notes:
a) 30,000 share options were exercised at a price of 25p in November
2023 and a further 126,000 share options were exercised in December 2023 at
the same price. A further 50,000 share options were exercised at a price of
0.1p in December 2023.
b) The placing in December 2023 and January 2024 took place at 35p
per share raising gross proceeds of £10,500,051 before costs of £575,138.
c) The placing in December 2024 took place at 35p per share raising
gross proceeds of £9,530,000 before costs of £504,079.
5. Cash used in operating activities
Six months ended Six months ended 15 months ended
31 Dec 2024 30 Sep 2023 30 June 2024
Unaudited Unaudited Audited
£ £ £
Operating profit / (loss) 3,605,923 (4,207,338) (13,191,609)
Depreciation of property, plant and equipment
210,871 200,296 517,504
Amortisation of intangible fixed assets 1,397,662 1,261,803 3,319,062
Share-based payment charge - options 185,667 160,099 391,661
(Increase) / decrease in inventories 1,070,677 (838,864) (4,585,273)
Increase in trade and other payables 18,102,971 179,786 3,473,250
(Increase) / decrease in trade and other receivables
(30,120,364) 1,560,304 (3,202,216)
Net cash used in operating activities (5,546,593) (1,683,914) (13,277,621)
6. Exceptional finance charge
As set out in note 3, during the period Ocean Infinity was granted 20,000,000
warrants at a strike price of 35p, and an exercise period of 3 years for the
provision of a guarantee in respect of a project performance bond.
In accordance with international accounting standards, these warrants have
been valued during the period over the expected life of the services that are
provided, being the guarantee. The expected life of the guarantee is the
period to June 30 2025, by which point it will be replaced with a combination
of SRTs own cash resources and the UKEF guarantee program. This has generated
a notional non-cash exceptional finance charge in the statement of
comprehensive income for the period of £677,678.
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. END TSTSEUEEMEISEDDRecent news on SRT Marine Systems
See all newsREG - AIM - AIM Notice - 08/04/2025
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AnnouncementREG - SRT Marine Systems - Issue of Equity
AnnouncementREG - SRT Marine Systems - Half Year Trading Update
AnnouncementREG - AIM - AIM Notice - 04/03/2025
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