SRT Marine Systems PLC Trading Update (9011U)
April 09 2021 - 1:00AM
UK Regulatory
TIDMSRT
RNS Number : 9011U
SRT Marine Systems PLC
09 April 2021
SRT MARINE SYSTEMS PLC
(AIM: SRT)
("SRT" or the "Company")
Trading update
SRT Marine Systems PLC (SRT), a global provider of maritime
surveillance, monitoring and management systems, today announces a
trading update for the year ended 31 March 2021.
The Company expects to report revenues of approximately GBP8.2
million* and loss before tax of GBP5.8 million* with gross cash as
at 31 March 2021 of GBP5.3 million*. During the period, existing
system contract customers made cash payments of GBP13 million per
agreed project payment schedules, with a further GBP5.7 million due
in the coming year. However, because of Covid lockdown related
implementation delays, no invoice milestones were completed and
thus no revenues recognised during the year. A fixed one-year CBILS
support loan of GBP2.5 million from the Company's bankers was drawn
down in April 2020. Following a review of detailed information on
the pending new system contracts the renewal of this facility was
agreed by the bank in March 2021 with repayments to be made on a
quarterly basis commencing in July 2021 through to April 2023.
Given the Covid environment, the transceivers business performed
robustly, achieving marginally higher revenues (+1%) on the
previous year and stable gross profit margins. New system contracts
that had been expected to commence during the year and contribute
significant revenues were delayed due to the extended Covid
lockdowns and are now expected during the new financial year.
In April 2020 we advised that of our pipeline of validated new
system opportunities included three in the Middle East region worth
approximately GBP75 million that were expected to commence within a
few months. However, the unexpected length and frequency of Covid
lockdowns has delayed these into the new financial year. During the
year four new system opportunities in Asia worth approximately
GBP50 million have developed more rapidly than expected and are now
pending their contract processing upon relaxing of Covid
restrictions and normalisation of the government's contracting
procedures. As of this statement, based upon customer guidance, we
expect three of the Asian opportunities and one of the Middle East
opportunities, with an aggregate value of approximately GBP71
million to commence during the first half, a further one in Asia
worth approximately GBP14 million at the beginning of the second
half, with the other two Middle East contracts , with an aggregate
value of approximately GBP40 million, to commence later in the
second half. The implementation and therefore revenue profile of
each project differs, ranging from 9 months to 24 months to
complete and therefore the revenues associated from these projects
will be spread over a 24 calendar month period against delivered
milestones.
Operationally the Company successfully transitioned to a new
Covid safe operating model which we intend will remain largely in
place due to several unexpected efficiencies and advantages of this
modus operandi that have become apparent. Activities such as
transceiver manufacturing, logistics, and product development have
continued as normal and in some cases such as product development
have accelerated. During the year significant new functionality was
added to our GeoVS maritime surveillance platform, and the
development of a strategic new transceiver product commenced which
we expect to be a significant revenue driver from the end of 2022
upon its completion.
The forced delay in new and existing system contracts, whilst
frustrating, has enabled our systems delivery team, in country
partners and customers to substantially restructure and refine our
systems implementation model. We are now able to pre-build and
configure many of the system modules in the UK and ship to in
country partners who can be supported remotely and with less on
site SRT resource application to install and commission the
systems. This will facilitate multiple project implementation scale
up.
The Company expects to publish its audited final results on
Thursday 29(th) July 2021 , and hold its AGM on Wednesday 22(th)
September 2021.
SRT CEO, Simon Tucker said:
"At the beginning of the year when Covid restrictions started,
we took immediate action to secure the necessary working capital
and operational changes to protect and sustain our business. These
actions have ensured that we are now in a good and secure position
to quickly recover and thrive. Covid lockdowns have prevented
system customers from moving forward with new contracts during the
year, resulting in a lost year for SRT financially. We now have
seven new system contracts worth a total of GBP125 million which
are pending commencement as the respective countries relax
restrictions and contracting processes catchup and normalise. Five
worth GBP85 million are of primary short-term focus for us given
customer guidance regarding their contracting processing status.
These systems are vitally important to our customers and we
maintain very close liaison with them whilst we both wait for the
relevant government contracting agencies to normalise
operations.
The forced delay has provided valuable time for our delivery
team, in-country partners and customers to restructure and
consolidate our systems delivery methods, implementing key method
changes and equipment preparations that will facilitate the
necessary significant scaling as lockdowns ease in the coming
months and customer contracting proceeds.
I am pleased to report that due to a combination of high-quality
products and consistently reliable service to customers around the
world, our transceivers business performed very well, achieving the
same level of sales as the previous year, and maintaining its gross
profit margins.
In such an exceptional time, I feel it is appropriate that I use
this statement to firstly thank our staff who have continued to
work throughout, some from home and some in our offices and
logistics centre. They have ensured that all our customers have had
their orders efficiently processed and filled, and that our product
development has continued. An exceptional effort and commitment to
SRT. And secondly, to our shareholders who I know, like me,
expected and hoped for a great financial result this year, but will
today be disappointed. I am very sorry for this disappointment and
would like to personally thank you for your support and patience
which I expect to be rewarded in the coming year as our system
customers are able to proceed as planned with the implementation of
these essential systems."
*subject to audit
For further information, please contact:
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 (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 integratedmaritime 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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