REG - SRT Marine Systems - Systems Contract & Trading Update

SRT Marine SystemsAnnouncement

23/03/2023 07:15

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RNS Number : 9123T  SRT Marine Systems PLC  23 March 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS
DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF
MAR.

 

 

SRT MARINE SYSTEMS PLC

(AIM: SRT)

("SRT" or the "Company")

 

Systems Contract & Trading Update

SRT Marine Systems plc ('SRT'), a global provider of maritime domain awareness
systems and technologies for security, safety and environmental protection
provides an update on current year trading, contracts and the forthcoming new
financial year.

The Company expects revenues for the year ending 31(st) March 2023 to be
approximately £30.0m, a 265% increase on the previous year, generating an
EBITDA profit of £2.5m and an expected loss before tax of £1.0m.

Our systems business will have generated revenues of approximately £18.0m
(prior year: £0.6m) and our transceivers business approximately £12.0m
(prior year: £7.6m). These results are lower than market expectations for the
current year primarily due to material systems business project milestones
that had been expected to be completed by the end of the current year being
delayed to the early part of the new financial year.

New Systems Contract

We are pleased to announce that, following an extensive selection and
negotiation process, earlier this week we signed a formal Letter of Intent
('LOI') for a new Coast Guard project worth £145m.

The project is for the delivery of a turn-key maritime surveillance system
that will enable enhanced maritime safety, security and protection of large
areas of environmentally sensitive marine areas. The customer is financing the
project by way of a loan organised and supported by the UK government overseas
UKEF agency.  The LOI states that the project will proceed upon completion of
the loan arrangement process between the two governments. These discussions
are at an advanced stage and expected to conclude within the next few months.
Once underway, we expect the majority of the project to be delivered within
two years, and thus generate significant revenues in the coming financial year
alongside our existing system projects. We will make a further announcement in
due course.

Validated Sales Pipeline ('VSP')

As the global market for digital integrated marine surveillance systems
continues to develop, SRT continues to grow a pipeline of prospective new
future project opportunities with existing and new customers. Today this
contains identified specific projects where we have ongoing discussions with
an estimated aggregate value of approximately £1.4 billion. However, many of
these are in their early stages and usually take several years to develop into
defined projects and contracts, and so the board are mostly focused on a
validated subset of these worth approximately £535.0m where our discussions
with the customer and the project are the most mature. The Company's VSP
contains £260.0m of new follow-on projects from existing customers who are
now looking to move on with the next phase of their long-term maritime
surveillance strategies and £275.0m of new projects from new customers -
including the £145m contract described above.

In addition to the pending conversion of the LOI contract, there have also
been some recent material events which have significantly improved timing
confidence of two other potential projects. Firstly, a series of meetings at
the highest level for another prospective new coast guard customer who wishes
to build up a very significant national scale system over the next ten years
in a series of incremental annual projects with an indicated annual project
budget in the region of £50.0m commencing from 2024. Secondly an existing
customer who has secured funding of up to £150.0m to undertake a significant
expansion of their existing SRT supplied system starting from 2024.

Our transceivers business grew year on year by an estimated 58% in the current
year, through the simple mechanics of a long-term macro-market trend of
increasing adoption of AIS across leisure and commercial vessels coupled with
quality products and services and an extensive global network of over 1,500
distributors, dealers and OEMs. The coming year will see a focus to
significantly expand distribution in the North American market, and the launch
of new products which will expand our addressable market opportunity. Of
particular note is NEXUS which combines marine voice and data communications
into a single device along with innovative mobile device connectivity, and
DAS-Express which targets the navigation segment and enables digital marking
of buoys and other navigation aids to facility safety and autonomous shipping.

Simon Tucker, CEO of SRT Marine Systems, commented:

"The £145.0m LOI signed earlier this week is a major milestone for SRT. Not
only because it is a significant project in itself, but because it adds
another Coast Guard customer who has an active long-term strategy to move to
an intelligence lead operational model and therefore have an active plan to
build up their independent maritime surveillance and intelligence
capabilities; and therefore future follow-on contracts.

Whilst I will be surprised if our transceivers division can maintain its
exceptional 58% year on year growth, the adoption of digital systems like AIS
in the marine world is at its early stages, our products are the market
leaders in all categories, we have significant new products coming and
established and motivated distribution, and therefore the ingredients are
there for continued excellent performance.

Notwithstanding the deferral of some revenue to our next financial year, the
prospects look extremely promising for both our business divisions. There will
of course be significant challenges to manage scaling, however we have made
investments in product and people and learnt many lessons and so SRT is in a
very favourable position."

 

 

 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
 Louise Coates (Marketing Manager)                           louise.coates@srt-marine.com

 finnCap Ltd (NOMAD & Broker)
 Jonny Franklin-Adams / Teddy Whiley (Corporate Finance)     +44 (0) 20 7220 0500
 Tim Redfern / Charlotte Sutcliffe (ECM)

About SRT Marine Systems plc:

SRT Marine Systems PLC is an established leader in the growing global market
for maritime domain awareness. We provide advanced technologies, products and
systems that enhance maritime safety, security and environmental protection
and sustainability. Our customers range from governments to vessel owners
around the world.

 

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