REG - SRT Marine Systems - Year End Trading Update

SRT Marine SystemsAnnouncement

05/04/2022 07:00

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RNS Number : 2908H  SRT Marine Systems PLC  05 April 2022

SRT MARINE SYSTEMS PLC

(AIM: SRT)

("SRT" or the "Company")

 

Year End Trading Update

 

SRT Marine Systems PLC (SRT), a global provider of maritime surveillance,
monitoring and management systems, today announces a year end trading update
for the financial year ended 31 March 2022.

We are pleased to announce that trading for the year ending 31 March 2022 has
been in line with market forecast expectations. Subject to audit, we expect to
report revenues for the year of £8.2million, and loss before tax of £6.9m.
Gross cash balances were £5.9m as at year end, following the successful
closing of a £4.9m equity raise during March 2022.

The Company's transceivers business performed well during the period but
suffered from constrained production due to very inconsistent component
supply. This resulted in revenues being lower than possible during the year,
and a significant forward order book as at year end. We expect demand to
continue to grow, and for the component supply chain issues to take up to a
further 12 months to normalise. As such we are now seeking to actively manage
this situation through strategic 'grey-market' purchases of components and
adjusting selling prices to cover the premiums being paid to secure supply in
order to maintain profit margins.

Our transceiver development activities have primarily focused on NEXUS, our
innovative VHF/AIS marine radio system, which will start shipping in early
calendar 2023. In addition to this major project, we have undertaken various
smaller projects to enhance and update some of our other transceivers. In the
year ahead we will continue our focus on delivering NEXUS as well as
developing our DAS digital navigation and environment monitoring product
offers.

The Company's systems business made good progress with the development of our
GeoVS platform which sits at the heart of the SRT-MDA System, improving our
project delivery capabilities and efficiency to facilitate multi-project
implementation, with implementing contracted system projects and progressing
new projects towards contract.

During the year, despite significant installation disruptions caused by
regular Covid restrictions, we made good progress commissioning the SRT-MDA
System with specialist fisheries functionality modules for The Philippines
Fisheries (BFAR). The core system is now in full operation and use by the
customer in multiple BFAR monitoring centres providing them with the
functionality and capacity to manage their fisheries and detect and prevent
illegal unlicensed and unregulated (IUU) fishing. The commissioning of the
core monitoring system marked the commencement of satellite data sales, which
we expect to continue into the future. During the period, no revenue
milestones were completed, and we continued to receive cash payments as per
contract. We expect the final revenue milestones to complete during the new
financial year.

In January, we signed a new SRT-MDA Systems supply contract with a new
sovereign coast guard customer for a project with a final aggregate value of
£40m upon completion. It will be implemented in three phases which we
currently expect to take approximately two years. We are pleased to report
that as a result of early strategic purchasing and preparation of monitoring
system equipment last year, following the contractually required inspection of
equipment prior to shipment by the customer at our logistics centre in
Somerset, the first components of the system were shipped in March and are
expected to undergo a final pre-installation inspection and acceptance by the
customer in country during April. This will trigger the first invoice and
payment and thereafter installation and commissioning of the equipment with
further related invoice and payment milestones. Upon completion of this
project we expect there will be further follow on projects to further expand
the capabilities of the system.

As of March 2022, we have a validated sales pipeline (VSP) of active new
system contract opportunities with an aggregate value of approximately £600m.
This comprises of multiple projects which are the primary focus of our systems
sales team. They each vary in size from £1m to £130m, and are at different
stages in their sales cycle. Many of these projects were delayed as sovereigns
focused their attention to Covid related issues, however in the last year they
have re-engaged with us as their attention returns to their long-term strategy
of wanting to acquire independent maritime surveillance capabilities. Several
of these new opportunities are in the late stages of the sales cycle prior to
contract, and we expect to be updating the market in the coming few months.

Our systems development activities have focused on our GeoVS integrated
maritime surveillance platform, which comprises multiple networking,
operator-station and field operator modules. GeoVS is the core operating
platform software upon which our turn-key SRT-MDA System solution is built
enabling integration of multiple sensor systems and operators within a single
secure maritime and border surveillance system. Our development focus of GeoVS
and the complete SRT-MDA System solution is across several key functionality
pillars that includes intelligent multi-sensor networking and data fusion,
dynamic AI analytics, visualisation and command and control functionalities,
all of which seamlessly integrate into a single operating environment.  The
SRT-MDA System today is the product of many years of diligent and continuous
development and we consider it to be a uniquely functional and integrated
maritime surveillance system solution that meets the next generation maritime
surveillance and management requirements of sovereign maritime agencies. The
development of our system will continue, integrating more functionality and
capabilities.

The Company expects to publish its audited final results on Thursday 28(th)
July 2022, and hold its AGM, along with an investor open day, on Wednesday
21(st) September 2022 at its offices in Midsomer Norton, Somerset.

SRT CEO, Simon Tucker said:

"This has been another challenging year and I am disappointed with the poor
final financial result. However, I believe we have made best use of this time
to improve our products and global distribution networks and where possible
continue to develop customer relationships. These factors now combine with an
improved sales outlook to provide a solid foundation for the year ahead to be
significantly different."

 

 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 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.

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