This year's poor financial performance belies the material progress across both our business divisions towards sustained profitability as the global economy and SRT recover from Covid. Government agencies such as Coast Guards, have returned to their long-term plans to build up sovereign maritime surveillance capabilities and restarted their processes. Whilst our transceivers business is experiencing strong demand as the macro digital-marine trend continues in both commercial and leisure sectors. Both are reflective of the strong fundamentals of our target markets coupled with our long-term strategy and significant cumulative investments over many years in the development of market leading products which we expect to be reflected in future financial performance.

As reported in our post year end trading update (April 2022), year on year group revenues were flat at £8.2m (2021: £8.3m) resulting in a loss after tax of £5.8m (2021: £5.1m) with gross cash as at the year-end of £5.9m (2021:  £5.3m) following a successful £4.9m equity placing in March. The systems business did not complete any revenue milestones and thus only generated £0.6m of revenues during the period from the ongoing sale of data services to system customers. Cash payments amounting to £6.1m were received during the year from existing system customers. The transceivers business thus accounted for £7.6m of our revenues (2021: £8.2m).

Our systems business continued to execute on our project with BFAR-Philippines, with a number of operational milestones achieved, including the full commissioning of the core fisheries monitoring and management centre which is now in full daily operation. We expect this project to complete within the next 12 months, and for further follow-on data sustainability and system expansion contracts to follow. A contract for the first phase of a new £40m three-phase project for an SRT-MDA System with a new national coast guard agency customer was signed in January 2022. I am pleased to report that following customer inspection and factory acceptance at SRT in March, first equipment shipments were completed in April, and as of publication of this report installation is well underway. This project is currently scheduled to be implemented over 2 years, although the customer has now requested a faster implementation timescale. We consider this new customer to be of considerable long-term value to SRT and likely to generate further contracts as they build up their maritime surveillance capabilities.  

The SRT-MDA System is a complex combination of systems networking and integrated functionality built around our core GeoVS technology. GeoVS has been developed entirely inhouse over many years to realise our starting vision of a being able to provide a national scale integrated system solution that delivers a full range of sophisticated maritime surveillance, command, control and management functionality. The development of the SRT-MDA System has continued during the year, with new functionalities and capabilities implemented. Notably we have innovated in the areas of marine activity analytics, enabling much greater insight and detection of suspicious and illegal events and vessels, and further enhanced our ability to integrate multiple sensor systems located on different platform types such as coastal installations, drones, patrol vessels and satellites. These are substantial uplifts in system capability which we believe further extend the unique offer of the SRT-MDA System and meet the maritime surveillance aspirations of our customers. SRT has built up a formidable development systems capability of which we are very proud and is in itself a very valuable asset and will enable us to continue this process and thus ensure the SRT-MDA System remains a market leader.

Our transceivers business has performed solidly, with demand exceeding our current ability to supply, resulting in a growing order book backlog of £3.2m as at year end. This reflects the ongoing issues in global electronics component supply which has constrained our production. This continues to be problematic with component order lead times being highly variable at best and our product costs increasing substantially as we seek to fill supply chain gaps through grey-market premium component buying to maximise production. Over the years we have built a global reputation as the leading supplier of marine transceivers with customers expecting both the best products and reliable consistent supply. We have therefore actively engaged with our customers to explain the issues and why supply is constrained and thus why we have had to increase prices to cover these additional costs. I am pleased to report that this approach has been well understood and we have not experienced a drop in demand following the necessary price increases. Unfortunately, market indicators suggest that this issue will remain until the end of 2023, but we are increasingly confident of our capability to gradually increase production capacity through strategic component purchasing. 

Our new NEXUS transceiver product development has made substantial progress during the year. NEXUS is a VHF voice and AIS data radio combined transceiver with a range of very innovative functionalities that deliver a new level of convenience for the mariner - commercial and leisure. This product will significantly expand our target market from data only into marine voice communications. We have developed NEXUS from scratch, enabling us to deploy the full capabilities of our experienced transceiver team who are working alongside selected external contractors to deliver this exceptional product. This has enabled the development of an all-new optimal core technology platform unconstrained from historical architectures.  As of this report, we have undertaken a soft teaser market awareness campaign, and the product is at early prototype and type approval testing stage. As is typical for an SRT product, NEXUS will undergo very extensive testing to ensure exceptional performance of both the core radio transceiver and user functionality before shipping commences. We have commenced the component purchasing process and expect that the first units will start shipping towards the middle of 2023.

Our standard vessel transceivers continue to be recognised as the leading quality product in the market, with customers seeking SRT based products from our OEM partners and our own em-trak brand. We are working on further enhancements to these products as part of continuous improvement. Our Digital Aids to Navigation System (DAS) offer is being further developed to enable us to offer ready to install kits directly to ports and waterway authorities who, following a Covid induced lull, have re-engaged with their plans to digitise navigation. The first DAS products have been launched with further to come.

Looking to the new financial year, we expect to see a material recovery in our financial results driven by existing and new contracts in our systems division and moderate, production constrained, growth, in our transceivers business.

In the first half we expect to show the first signs of that growth from the completion of revenue milestones from existing contracts, and during the second half from some substantial new system contracts that have been pending for some time and form part of the £600m worth of new contract opportunities on which our sales team are focused. We recognise and share the frustration at the time these are taking to convert into signed contracts, however in the last year, as reported we have seen vigorous re-engagement from these customers who have in many cases had to restart their approval processes due to internal time-out rules. We have close engagement with these customers, and several are now in the late-sales stage administrative process that leads to contract awards. Whilst these late-stage processes are defined by the customer's respective legal procurement processes and thus entirely out of our control, we do have good visibility of their status and this underpins our confidence of new system contracts. An example of this is our January £40m project award where we had a high degree of certainty of the contract award well before the actual contract was signed and announced. I therefore expect a succession of substantial new contracts during the second half of the new financial year which will drive revenues in the new year and subsequent years. And thereafter further contracts driven by the long-term trend of countries wanting to build up sovereign maritime surveillance capability.

Our transceivers business will continue to benefit from increasing demand for AIS in both commercial and leisure markets, underpinned by existing and new legislation and general trend of digitising marine navigation. We also expect to see good results from our ongoing DAS strategy, that targets environment monitoring and navigation safety, where we have a market leading portfolio of products. Whilst we expect the component supply issue to remain until the end of 2023, we are confident that we can expand production to meet demand at the higher pricing and will continue to work closely with our valued customer base to that end. NEXUS will start to make a contribution in the next financial year (2023/24) and based upon initial market feedback we expect this growth to be substantial.  

SRT's fundamental business model remains the same in that we focus on developing advanced core technologies and that deliver products with innovative functionalities for the marine market. These are delivered to customers through a global network of over 1,000 established partners, that range from marine electronic dealers, OEM marine electronic brands and system integrators. This enables us to focus our investment and resources primarily on product development and maintain low overheads whilst targeting a significant global market and multiple substantial projects. This means that we are structured to deliver substantial growth without commensurate growth in our cost base. However, it also means that we must have and maintain the very best core technology and product development capability as we have done in the past financial year, something that our management team has carefully built over many years and continues to evolve. Our transformation to a flexible hybrid work location model is enabling us to harness global talent and this process has accelerated during the past year and will continue going forward, enabling SRT to extend its product lead. In that regard I want to thank our team for their hard and intelligent work that enables us to have the products that are the foundation of our business and future. 

In final summary, the year was one of operational and market recovery and we expect this to be reflected in our financial performance in the new financial year and years ahead - as such we as a board look forward to the future with confidence. I would like to thank both our staff and shareholders for their continued support that has enabled SRT maintain its business through this difficult period. 

      Kevin Finn, Chairman, Date: 27 July 2022

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2022