TIDMSRT
RNS Number : 8151T
SRT Marine Systems PLC
19 November 2019
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014 and is disclosed in accordance
with the Company's obligations under Article 17 of those
Regulations.
SRT MARINE SYSTEMS PLC ("SRT" or the "Group")
HALF YEARLY REPORT FOR THE SIX MONTHSED 30 SEPTEMBER 2019
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 2019 (the "Period").
Financial Highlights
-- Year on year period revenue increased by 9.8% to GBP3.5m (H118: GBP3.2m)
-- Gross profit margin of 38% (H118: 41%)
-- Gross cash of GBP1.7 million as at the period end (H118: GBP1.4m)
-- Active new systems contracts pipeline increased to approximately GBP580m
Operational Summary
-- Completion of first iteration of new fisheries monitoring transceiver (VMS-100)
-- Completion of first phase of new AIS transceiver development program
-- Significant functionality upgrade to GeoVS maritime domain awareness application
-- Growth of delivery, product management and development teams
Chairman's Statement
I am pleased to report that during the first half of our
financial year the Group performed operationally in line with our
plans and expectations and I look forward to reporting a busy and
productive second half and next financial year.
Revenues grew year on year by 9.8% to GBP3.5m generating a gross
profit margin of 38% and a loss before tax of GBP1.5m after
administration costs of GBP2.7m and net finance costs of GBP0.2m.
Cash balances as at 30 September 2019 were GBP1.7m, with trade and
other debtors of GBP14.3m.
The vast majority of revenues during the first half were
generated by our transceivers business with only a minimal
contribution from our MDA systems business as no performance
milestones were completed during this period. A significant cash
payment was received from a systems customer as scheduled,
counterbalanced by further significant purchases of equipment to
complete milestones scheduled for the second half. Subsequent to
the period end I can report that we have received a further GBP4.9m
as scheduled from a systems customer, which related to revenue
recognised on performance milestones completed during the previous
financial year.
Our raw overhead cash expenditure which excludes adjustments
such as exchange rate adjustments, depreciation, amortisation and
development capitalisation amounted to GBP4.2m compared to GBP2.8m
for the same period last year. This increase reflects a doubling of
product development investment from GBP0.7m to GBP1.4m and relates
to new transceivers and significant acceleration and expansion of
GeoVS software development as well as our investments in our
systems delivery and product management teams.
Our transceivers business enjoyed growing demand in both our OEM
and em-trak sub-divisions, driven primarily by the continuing
long-term adoption trend of AIS transceivers as standard equipment
on boats, both commercial and leisure, coupled with steady
expansion of our various OEM and em-trak sales channels.
Underpinned by our strategy of focusing on developing core
technology that delivers the best performance and so maximum AIS
data, and derivative products that are robust and reliable with
functionality that is practical and useful to the end user. All at
price points which are affordable to the majority of boat owners.
We have also started to generate new revenue streams from
customised versions of standard products such as specialist
ruggedized and encrypted AIS transceivers for coast guards and
emergency services applications.
During the period the first of a new range of products, the B900
series, were completed which will be exclusive to em-trak and will
launch in November 2019 and commence shipping from January 2020.
These new products deliver maximised AIS data and simultaneous
multi-device connectivity to meet the market demand for maximum
navigation functionality flexibility through an increasing use of
feature rich tablets, PCs, phones and wearables for navigation on
commercial and leisure boats. This development program, which
commenced in 2018, will yield further innovative AIS related
products during 2020 and 2021 for both our OEM and em-trak
sub-divisions all of which will leverage our internal core radio
communications technology development capabilities to produce
robust, high performance integrated products that are affordable
and desirable to the mass leisure and commercial marine markets. We
therefore see many exciting growth opportunities for our
transceivers business for the second half and beyond.
During the first half we have made significant progress with our
systems business, both in respect of existing contracts and pending
contract opportunities. This business delivers a turn-key
integrated maritime surveillance, monitoring and management system
(SRT-MDA System) which is configurable in scale and functionality
depending on the customer. The system is used by coast guards or
fishery authorities to enable them to detect and manage suspicious
and illegal activities such as drug smuggling, piracy and illegal
fishing.
Our systems delivery team has continued to make good progress
with our fisheries contract with the Philippine Government.
Extensive work has been completed by our Delivery team that
includes surveying and preparing over 100 sites, as well as
assembling large volumes of complex equipment shipped from our
warehouse in the UK ready for installation and commissioning at
these sites. We expect the monitoring system to start to come
online from January 2020 whereupon the customer will commence day
to day use of the system for fisheries management. This project
benefits from our new ruggedized VMS-100 fisheries monitoring
transceiver with electronic fish catch reporting interface which
will start being installed on 5,000 vessels from early 2020. In
validation trials, I am pleased to report that our system has
proven its ability to receive status reports from fishing boats of
any size once every 15 minutes. An exceptional performance level
not seen until now in fisheries monitoring made possible by core
technology innovation by the SRT transceiver development team.
On the development side, at the heart of the SRT-MDA system is
our GeoVS platform. This is a sophisticated professional integrated
software application which enables the fusion and processing of
large amounts of surveillance data from multiple terrestrial and
satellite sensor sources. It applies configurable real time and
historical analytics to identify and detect threats and illegal
activities along with advanced visualisation and integrated command
and control to enable customer operatives to have enhanced
situational awareness and manage appropriate action. During the
first half we have continued to expand and accelerate our GeoVS
development program and have made significant progress with the
development and implementation of additional functionality. Areas
of long-term focus include data fusion, data analytics, alert
management, fish catch reporting and auditing and command and
control. I am pleased to report that our considerable investments
in GeoVS over many years have resulted in it becoming a significant
asset for SRT and provides our systems offer with a differentiated
level of integrated functionality and ultimately delivering
enhanced maritime domain awareness for our customers.
As one of the pioneers of integrated maritime domain awareness
systems, SRT has built a global reputation as a reliable and
trusted supplier of such systems and as such given the continuing
growing strategic importance to countries of their marine domain,
we receive many inquiries and are engaged in many discussions with
multiple authorities around the world. Each opportunity has
different characteristics such as scale, budget, system
composition, implementation concept, timescales and processes as
dictated by the specific authority; however all have the same
fundamental operational requirements which we deliver with the
SRT-MDA system.
Most of our system discussions are confidential in nature and
usually have a long gestation period due to the nature of a
government turning a general idea into a real system with all the
necessary regulations, budgets and approvals. Over the last few
years, we have followed a very steep learning curve in respect of
understanding the realities of the intricacies and complexities of
the processes that each of these large contracts must complete
prior to SRT being contracted. Whilst predicting timescales remains
imperfect, this knowledge now enables us to more accurately
characterise system opportunities with regards to their status
within a customer's process and better understand the real time
window within which we would expect to be contracted and start
implementing an SRT-MDA system. We hope this will reflect in an
improving ability to provide market updates on the status of future
system contract opportunities.
In a world where maritime surveillance has become of strategic
importance to most countries, our daily challenge is to ensure that
we focus the majority of our sales resources on those opportunities
where we have verified that they have clarity on the system they
want, have taken the decision to implement a system and most
importantly have the budget, and therefore the route to a contract
is a matter of process and time. We call this our validated sales
pipeline (VSP) which is robustly reviewed and discussed by the
Board and senior company management on a regular basis. During the
first half the value of potential contracts in our VSP has
increased to approximately GBP580m. This is largely due to the
increase in value and scope of our opportunities in SE Asia. Each
opportunity within our VSP requires considerable engagement from
SRT across the business, including sales, product Management and
delivery in order to support the customer in their process to bring
the project to formal contract. This support will include
activities such as advising on the writing of supporting laws and
regulations, undertaking in country site surveys to determine the
exact equipment specifications required and any practical
challenges such as suitability of site power and connectivity and
if not, identifying the solution.
I am pleased to report we have made very good progress with all
our VSP opportunities, however, the precise status of each varies
in respect of how far they are from contracting. Of the overall
VSP, there are six specific projects in SE Asia and Middle East
with an aggregate value of approximately GBP300m which we are
confident are nearing the point of contract. These are of
particular focus for our teams and work on them has been intense
during the first half to support the customers final processes.
Typically, the final contracting process is an entirely internal
one to the customer and we are called upon as is necessary to
resolve any administrative issues or understandings amongst their
internal departments.
Each of our system contracts vary greatly in size and scope,
from GBP1m to GBP150m and initial system implementation periods of
anywhere between 6 months and 4 years. Each offers long term
recurring revenue opportunities through the provision of regular
customised satellite data feeds and/or system updates and expansion
after the initial phase. Our SRT-MDA system combines real time
coastal surveillance with long range satellite surveillance data to
provide an optimised gapless picture of their maritime domain.
Given the nature of large marine domains, we believe that the
provision of satellite data such as relaying transmissions from our
vessel transceivers, optical and Infrared imagery directly into the
monitoring systems we have delivered, offer a significant long-term
recurring revenue opportunity and as such we continue to
investigate ways in which we can maximise the opportunity that our
system contracts provide in this respect.
Looking to the second half I expect to see our transceivers
business benefitting from the increased sales channels and new
product launches during the seasonal buying period. I also expect
to see our systems business completing several major performance
milestones on our existing contracts and, subject to customer
processes and timings, the conversion and commencement of new
system contracts. As such, the Board remains comfortable with
achieving market expectations.
Kevin Finn
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Six months Six months Year
ended ended ended
30 Sep 30 Sep 31 Mar
2019 2018 2019
Unaudited Unaudited Audited
Notes GBP GBP GBP
--------------------------------- ------ -------------- --- -------------- ----------------
Revenue 3,541,039 3,223,804 20,559,699
Cost of sales (2,181,374) (1,915,550) (11,229,754)
--------------------------------- ------ -------------- --- -------------- ----------------
Gross profit 1,359,665 1,308,254 9,329,945
Administrative costs (2,673,611) (2,472,004) (5,877,445)
-------------- --- -------------- ----------------
Operating (loss) / profit (1,313,946) (1,163,750) 3,452,500
Finance expenditure 1 (231,833) (143,609) (275,195)
Finance income 803 224 363
--- ----------------
(Loss) / profit before income
tax (1,544,976) (1,307,135) 3,177,668
Income tax credit 3 160,434 113,829 230,703
--------------------------------- ------ -------------- --- -------------- ----------------
(Loss) / profit for the period (1,384,542) (1,193,306) 3,408,371
--------------------------------- ------ -------------- --- -------------- ----------------
Total comprehensive (loss)
/ profit for the period (1,384,542) (1,193,306) 3,408,371
--------------------------------- ------ -------------- --- -------------- ----------------
(Loss) / earnings per share:
Basic
Diluted 2 (0.90)p (0.88)p 2.43p
2 (0.90)p (0.88)p 2.36p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2019
As at As at As at
30 Sep 30 Sep 31 Mar
2019 2018 2019
Unaudited Unaudited Audited
Notes GBP GBP GBP
------------------------------- ------ ------------ ------------ --------------
Assets
Non-current assets
Intangible assets 7,314,999 6,275,385 6,625,203
Property, plant and equipment 1 1,681,063 175,431 355,509
Deferred Tax 214,731 386,517 54,297
------------------------------- ------ ------------ ------------ --------------
Total non-current assets 9,210,793 6,837,333 7,035,009
Current assets
Inventories 4,304,690 3,353,330 2,234,378
Trade and other receivables 14,329,314 4,660,048 18,012,279
Cash and cash equivalents 1,747,439 1,426,402 3,942,167
------------------------------- ------ ------------ ------------ --------------
Total current assets 20,381,443 9,439,780 24,188,824
Liabilities
Current liabilities
Trade and other payables (4,855,621) (1,431,387) (6,318,987)
Financial liabilities 1 (214,473) (250,000) (18,055)
Total current liabilities (5,070,094) (1,681,387) (6,377,042)
Net current assets 15,311,349 7,758,393 17,851,782
Total assets less current
liabilities 24,522,142 14,595,726 24,886,791
Long term liabilities
Financial liabilities 1 (6,009,050) (3,150,000) (5,016,981)
Total long term liabilities (6,009,050) (3,150,000) (5,016,981)
Net assets 18,513,092 11,445,726 19,869,810
------------------------------- ------ ------------ ------------ --------------
Shareholders' equity
Share capital 4 154,794 139,743 153,223
Share premium account 11,543,989 7,738,311 11,510,773
Other reserves 6 5,490,596 5,490,596 5,490,596
Retained earnings / (loss) 1,323,713 (1,922,924) 2,715,218
Total shareholders' equity 18,513,092 11,445,726 19,869,810
------------------------------- ------ ------------ ------------ --------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Six months Six months Year ended
ended ended
30 Sep 30 Sep 31 Mar
2019 2018 2019
Unaudited Unaudited Audited
Notes GBP GBP GBP
-------------------------------- --------- ------------- -------------- --------------
Cash used in operating
activities 5 (335,916) (1,635,351) (3,636,473)
Corporation tax received - - 449,094
------------------------------------- ---- ------------- -------------- --------------
Net cash used in operating
activities (335,916) (1,635,351) (3,187,379)
------------------------------------- ---- ------------- -------------- --------------
Investing activities
Expenditure on product
development (1,359,127) (711,324) (1,690,516)
Purchase of property, plant
and equipment (238,873) (42,737) (240,247)
Interest received 803 224 363
------------------------------------- ---- ------------- -------------- --------------
Net cash used in investing
activities (1,597,197) (753,837) (1,930,400)
------------------------------------- ---- ------------- -------------- --------------
Financing activities
Gross proceeds on issue
of shares 34,787 3,000,000 7,031,530
Costs of issue of shares - (155,238) (400,826)
Repayments on loan - (250,000) (500,000)
New loans issued - - 1,840,000
Finance lease repayment (64,569) - -
Interest paid (231,833) (143,609) (275,195)
------------------------------------- ---- ------------- -------------- --------------
Net cash (used in) / generated
from financing activities (261,615) 2,451,153 7,695,509
------------------------------------- ---- ------------- -------------- --------------
Net (decrease) / increase
in cash and cash equivalents (2,194,728) 61,965 2,577,730
------------------------------------- ---- ------------- -------------- --------------
Net cash and cash equivalents
at beginning of period 3,942,167 1,364,437 1,364,437
------------------------------------- ---- ------------- -------------- --------------
Net cash and cash equivalents
at end of period 1,747,439 1,426,402 3,942,167
------------------------------------- ---- ------------- -------------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Share Share Retained Other Reserves Total
Capital Premium Earnings
GBP GBP GBP GBP GBP
At 31 March 2018 127,743 4,905,549 (789,410) 5,490,596 9,734,478
Total comprehensive loss
for the period - - (1,193,306) - (1,193,306)
Share based payment charge - - 59,792 - 59,792
Issue of equity share
capital 12,000 2,988,000 - - 3,000,000
Costs of issue of equity
share capital - (155,238) - - (155,238)
At 30 September 2018 139,743 7,738,311 (1,922,924) 5,490,596 11,445,726
Total comprehensive income
for the period - - 4,601,677 - 4,601,677
Share based payment charge - - 36,465 - 36,465
Issue of equity share
capital 13,480 4,018,050 - - 4,031,530
Costs of issue of equity
share capital - (245,588) - - (245,588)
At 31 March 2019 153,223 11,510,773 2,715,218 5,490,596 19,869,810
Total comprehensive loss
for the period - - (1,384,542) - (1,384,542)
Share based payment credit - - (6,963) - (6,963)
Issue of equity share
capital 1,571 33,216 - - 34,787
At 30 September 2019 154,794 11,543,989 1,323,713 5,490,596 18,513,092
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 European
Union. 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 European Commission. The financial
information has been prepared on the basis of IFRS that the
Directors expect to be adopted by the European Union and applicable
as at 31 March 2020.
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 2019 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 the disclosure in the financial
statements surrounding the recoverability of debtors greater than
twenty-four months old which had not been provided as well as a
material uncertainty relating to going concern.
The financial information for the six months ended 30 September
2019 and 30 September 2018 is unaudited. The interim financial
statements will be available to download on the Company's website
www.srt-marine.com from 19 November 2019.
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 2019, except for the adoption during
the period of IFRS 16 "Leases".
IFRS 16 has been adopted using the modified retrospective
approach and therefore the comparative information has not been
restated and continues to be reported under IAS 17.
The impact on the financial statements for the period ended 30
September 2019 has been to recognise a right of use asset within
property, plant and equipment of GBP1,216,897 and a finance lease
liability of GBP1,233,523, of which GBP214,473 is presented within
current financial liabilities and the remaining is presented within
long term financial liabilities. These leases were previously
reported as operating leases within administrative costs. Interest
charged on the finance leases for the period ended 30 September
2019 amounted to GBP31,531 and in included within finance
expenditure. Depreciation charged on the right of use assets
amounted to GBP84,302 for the period. Another significant change
due to the impact of this standard has been to the presentation of
cash flows, whereby finance lease repayments are now presented for
the capital element of the lease and interest now being charged is
presented within the same cash flow section. Depreciation has also
increased in the presentation of cash used in operating activities.
The impact on opening reserves was not material to these interim
financial statements and therefore a decision has been made to
present this in the statutory financial statements.
2. (Loss) / earnings per share
The basic loss per share have been calculated using the loss for
the period of GBP1,384,542 (six months ended 30 September 2018 -
loss of GBP1,193,306; year ended 31 March 2019 - profit of
GBP3,408,371) divided by the weighted average number of ordinary
shares in issue of 154,660,183 (six months ended 30 September 2018
- 135,807,993 and year ended 31 March 2019 - 140,059,460).
During the six months ended 30 September 2019 and 2018, the
Group has incurred losses for the periods and therefore there is no
impact of the share options granted on diluted earnings per share.
During the year ended 31 March 2019 the number of dilutive shares
under option was 4,237,894 and the weighted average number of
shares for the purposes of dilutive earnings per share was
144,297,354.
3. Income tax credit
During the period, the Group credited GBP160,434 of income tax
to the profit and loss account in respect of an increase in its
deferred tax asset. During the period ended 30 September 2018,
GBP113,829 was credited in respect of an increase in the Group's
deferred tax asset and during the year ended 31 March 2019
GBP230,703 was also credited due the receipt of an income tax
credit in respect of the Group's research and development
activities offset by a deferred tax charge.
4. Share capital
30 Sep 30 Sep 31 Mar
2019 2018 2019
Unaudited Unaudited Audited
GBP GBP GBP
-------------------------------- ---------- ---------- ----------
Allotted:
Ordinary shares of 0.1p each 154,794 139,743 152,223
--------------------------------- ---------- ---------- ----------
Reconciliation of movement Number of
in share capital shares
Shares outstanding at 31 March 2018 127,742,419
Placing of shares - May 2018 (a) 12,000,000
Shares outstanding at 30 September 2018 139,742,419
Placing of shares - January 2019 (b) 13,400,000
Exercise of share options (c) 80,000
Shares outstanding at 31 March 2019 153,222,419
Exercise of share options (d) 1,571,500
Shares outstanding at 30 September 2019 154,793,919
Notes:
a) The placing in May 2018 took place at 25p per share raising
gross proceeds of GBP3,000,000 before costs of GBP155,238;
b) The placing in January 2019 took place at 30p raising gross
proceeds of GBP4,020,000 before costs of GBP245,587;
c) 50,000 share options were exercised at a price of 23p in
December 2018 and 30,000 at a price of 0.1p in March 2019;
d) 35,000 share options were exercised at a price of 0.1p in
April 2019, followed by 1,375,000 at a price of 2.5p in April 2019,
152,500 at a price of 0.1p in June 2019 and 9,000 at a price of
2.5p in July 2019.
5. Cash used in operating activities
Six months Six months Year ended
ended ended
30 Sep 30 Sep 31 Mar
2019 2018 2019
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------ -------------- -------------- ---------------
Operating (loss) / profit (1,313,946) (1,163,750) 3,452,500
Depreciation of property,
plant and equipment 166,376 44,785 107,253
Amortisation of intangible
fixed assets 669,330 658,758 1,288,132
Share-based payment (credit)
/ charge (6,963) 59,792 96,257
(Increase) / decrease in
inventories (2,070,312) 90,355 1,209,307
Decrease / (increase) in
trade and other receivables 3,682,965 (227,048) (13,579,279)
(Decrease) / increase in
trade and other liabilities (1,463,366) (1,098,243) 3,789,357
Net cash used in operating
activities (335,916) (1,635,351) (3,636,473)
------------------------------- -------------- -------------- ---------------
6. Other reserves
Other reserves consist of a capital redemption reserve of
GBP2,857 (six months ended 30 September 2018 - GBP2,857 and year
ended 31 March 2019 - GBP2,857), a warrant reserve of GBP62,400
(six month ended 30 September 2018 - GBP62,400 and year ended 31
March 2019 - GBP62,400) and a merger reserve of GBP5,425,339 (six
months ended 30 September 2018 - GBP5,425,339 and year ended 31
March 2019 - GBP5,425,339). There were no movements in these
reserves during the period.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFFALVLTLIA
(END) Dow Jones Newswires
November 19, 2019 02:00 ET (07:00 GMT)
Grafico Azioni Srt Marine Systems (LSE:SRT)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Srt Marine Systems (LSE:SRT)
Storico
Da Apr 2023 a Apr 2024
