Source - LSE Regulatory
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 

+ 44 (0) 1761 409500

 

Simon Tucker (CEO)

simon.tucker@srt-marine.com

Louise Coates (Marketing Manager)

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.

 


 

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 30th 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

£


£


£

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

Diluted

 

 

2

2

 

 

1.17

1.16


 

 

(1.91)p

(1.91)p


 

 

(3.53)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

 2021


31 Mar 2022



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

Capital

Share

Premium

Retained Earnings

Other Reserves

Total








£

£

£

£

£













 

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

 

Total comprehensive loss for the period

-

-

(2,709,981)

-

(2,709,981)

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

 

Total comprehensive profit for the period

 

-

-

2,122,712

-

2,122,712

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 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

 2022


30 Sep 2021


31 Mar 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

 

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