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SRT Srt Marine Systems Plc

29.60
-0.40 (-1.33%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Srt Marine Systems Plc LSE:SRT London Ordinary Share GB00B0M8KM36 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.40 -1.33% 29.60 29.00 30.50 30.00 29.75 30.00 125,959 16:35:01
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Communications Services, Nec 30.51M 69k 0.0004 743.75 57.26M

SRT Marine Systems PLC Final Results for the year ended 31 March 2018 (3639V)

23/07/2018 7:00am

UK Regulatory


Srt Marine Systems (LSE:SRT)
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TIDMSRT

RNS Number : 3639V

SRT Marine Systems PLC

23 July 2018

SRT MARINE SYSTEMS PLC

(AIM: SRT)

("SRT" or the "Company")

FINAL RESULTS FOR THE YEARED 31 MARCH 2018

SRT, the AIM-quoted provider of maritime domain awareness technologies, products and solutions, announces its results for the year ended 31 March 2018.

FINANCIAL SUMMARY

   --      Increase in systems business sales opportunity pipeline 
   --      Reduction in revenues due to contract timing 
   --      43% Gross profit margin 
   --      35% increase in product development investment 

OPERATIONAL HIGHLIGHTS

   --      Expansion of transceiver customer base 
   --      Progress with system sales opportunities 
   --      New functionality implemented in GeoVS system 
   --      Transfer of transceiver production to new facility 

Commenting on today's results, Simon Tucker, CEO of SRT said:

"I am very disappointed with the shortfall in our revenues for the year, which was caused by an unexpected contract change. This does not reflect the excellent operational progress the business has made with regards to product development and sales opportunities. I recognise that we are measured on the profits that SRT delivers and to that end expect SRT to measure up to expectations in the near future. "

 
  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 / Anthony Adams (Corporate 
    Finance)                                                  +44 (0) 20 7220 0500 
   Tim Redfern / Richard Chambers (Corporate 
    Broking) 
 
 
 
 
 
 
 
 
   About SRT: 
 
   SRT develops, manufactures and supplies maritime tracking technology 
   and turn-key system solutions to marine stakeholders across 
   the globe with a particular expertise in AIS. The Company's 
   products and solutions are used by individual vessel owners, 
   port authorities, maritime infrastructure owners, coast guards 
   and national security agencies to enhance their maritime domain 
   awareness. Applications include the tracking of commercial 
   and leisure vessels; sustainable fishery; anti-collision; search 
   and rescue; waterway management, port and coast security; pollution 
   management; and environmental management. 
 
   The information communicated in this announcement contains 
   inside information for the purposes of Article 7 of the Market 
   Abuse Regulation (EU) No. 596/2014. 
 

CHAIRMAN'S STATEMENT

 
 This year has been financially challenging for SRT, as we 
  pass through the final stage before a number of significant 
  system projects commence in earnest. Despite a disappointing 
  reduction in revenues compared to last year, we end the 
  year in a satisfactory financial position, with a significantly 
  increased pipeline of system sales opportunities. 
 
  Group revenue decreased year-on-year from GBP11.0 million 
  to GBP5.3 million, resulting in a loss before tax and exceptional 
  items of GBP4.3 million (2017: profit GBP 1.2 million). 
  Our gross profit margin was 43% (2017: 66%) with the year 
  on year movement reflecting the very high weighting of our 
  transceiver business in the current year compared to a much 
  greater weighting of our high margin systems business in 
  the previous year. We are also recording a one-off exceptional 
  impairment charge of GBP1.5m in relation to a systems contract 
  with a European systems integrator who is prime contractor 
  to a SE Asian coast guard. Although we received written 
  re-assurances from the customer, including a letter from 
  the end customer explaining that the delay had arisen due 
  to a lack of budget availability and would re-commence in 
  the future, since in this instance, SRT was not the prime 
  contractor and thus not engaged directly with the end customer, 
  we decided that given this lack of visibility it was prudent 
  for us to write down the full value of the project. This 
  was announced to the market via an RNS on 31 July 2017. 
 
  As at the year-end our gross cash balances were GBP1.4 million 
  (2017: GBP1.8 million). In the light of the historical challenges 
  with contracts, we have emphasised the future risks around 
  payment timings from large system customers, specifically 
  our existing contract in the Middle East and a going concern 
  risk in the event that these are further extended and or 
  not closed. Recognising these issues, during the year we 
  entered into a GBP10 million loan note programme, of which 
  GBP3.15 million has been drawn-down at the date of this 
  report with repayment over a three year period. And in June 
  2018 we completed a successful fundraise of GBP3 million. 
  This has provided the Group with working capital facilities 
  to fill working capital gaps which arise from time to time 
  due to the nature of government contracts. 
 
  Administrative costs year on year increased to GBP6.5 million 
  from GBP6.0 million. This is largely a result of the adverse 
  foreign exchange impacts on the revaluation of dollar denominated 
  receivables. The underlying overhead position however remains 
  tightly controlled and remains relatively low for a business 
  addressing such a large and global market. As systems projects 
  convert I expect that our overheads will increase driven 
  by an increase in field project management and support resource 
  requirements. 
 
  During the year we continued to invest in our core technologies 
  and products, increasing investment to GBP1.9 million from 
  GBP1.4 million last year. These programs saw the completion 
  of a new range of Class B transceivers, implementation of 
  new system related functionality on other transceivers, 
  and significant functionality enhancements to our GeoVS 
  maritime tracking and management application. We expect 
  to accelerate our R&D activities in the coming year to support 
  the delivery of systems, through the selective expansion 
  of our internal development team around critical core technology 
  areas such as display, data fusion networking, analytics 
  and transceivers, with other components contracted out. 
 
  An important part of our systems business is the provision 
  of vessel monitoring data via satellites when vessels are 
  operating beyond the range of terrestrial sensor systems. 
  As the effective owner of the system contract to the end 
  customer, there is a significant future recurring revenue 
  opportunity for SRT from each system for the supply of such 
  data. We announced our intent to launch our own satellite 
  system, Oceanscan, and have commenced the technical and 
  commercial evaluation of such an investment. This work continues 
  such that we can weigh up the rapidly changing commercial 
  landscape with regards to satellite data sources due to 
  the expected large increase in the number of satellite systems 
  with AIS and other vessel detection capabilities which is 
  causing a decrease in the cost of data coupled with an increase 
  in the data quality. This may mean that it is more profitable 
  for SRT to act as a data aggregator rather than to make 
  the investment ourselves, resulting in our data sales being 
  more profitable with less risk across the business. 
 
 
 
 
 
  CHAIRMAN'S STATEMENT - continued 
 
  Our transceiver business which sells AIS transceivers via 
  a network of marine electronics brands, dealers as well 
  as directly to end users saw revenues decrease year on year 
  by 12%. This was caused primarily due to the introduction 
  of our new range of Class B transceivers which resulted 
  in stock shortages during the second half. I am pleased 
  to report all these products are now in volume production. 
  Going forward we expect to see this business continue its 
  previous growth as the adoption of AIS in the EU and USA 
  leisure and commercial marine markets grows. 
 
  Our systems business which provides turn-key maritime surveillance 
  and management system solutions to coast guards, ports and 
  fishing authorities, delivered revenues of only GBP0.3 million 
  (2017: GBP5.3 million). The decline relates to the fact 
  that minimal system project deliverables were completed 
  during the year, and the delay to the timing of the expected 
  new system contract. However, I am pleased to report that 
  there has been significant progress with a number of specific 
  large system sales opportunities towards contract signing. 
  In all cases SRT is directly engaged with the end customer 
  and going forward we are confident that several of these 
  will convert into contract with installations and payments 
  completed in the new financial year ahead. 
 
  During the year, SRT was awarded a EUR28.5 million contract 
  to supply its VMS system to a SE Asian government customer. 
  In accordance with the contract and customer operational 
  imperatives, deliveries of equipment commenced during the 
  last quarter of the financial year in preparation for commencement 
  of installation in the following months. However, due to 
  a decision by the customer to change the funding source 
  for the project, it has become necessary for the contract 
  to be cancelled in July and thus the deliverables and related 
  invoices being taken back by SRT. At the time of this report 
  we expect that a revised contract that specifies the new 
  funding source will be in place within a few months. 
 
  Looking forward, whilst I understand that these results 
  are disappointing, during the year the Group has made very 
  significant operational progress, in particular with its 
  system sales discussions. These are very significant sales 
  opportunities which our teams have been working on for several 
  years in a consultative fashion to enable the end customer 
  to convert a general vision or intent into a detailed system 
  specification, implementation plan and supporting legislation. 
  The potential value of these contracts to SRT of these over 
  the next few years is in excess of GBP400 million, plus 
  ongoing satellite data sales which are locked into these 
  contracts. The procurement imperative for the end customers 
  are strong and clear and range from national security to 
  international regulations such as the EU Commission fishing 
  catch certification program. As these customers are governments 
  the accurate forecasting of contract dates and delivery 
  schedules is and will always remain challenging and, to 
  some degree, out of our control. However, we are confident 
  that due to the capabilities of our technologies and systems 
  and our references that these will convert. And given their 
  size this will be transformational for the financial performance 
  of SRT and will reward the patience and support of our shareholders 
  and employees. 
 
 
 
  Kevin Finn 
  Chairman 
 
  Date: 20 July 2018 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE 
  INCOME FOR THE YEARED 31 MARCH 2018 
 
 
                                           Note            2018           2017 
                                                            GBP            GBP 
 
   Revenue                                            5,331,559     11,025,730 
 
 Cost of sales                                      (3,026,374)    (3,786,176) 
 
 
 Gross profit                                         2,305,185      7,239,554 
 
 Administrative costs                               (6,469,102)    (5,961,393) 
 
 
   Operating (loss) / profit before 
   exceptional items                                (4,163,917)      1,278,161 
 Impairment charge                         4        (1,490,315)              - 
 
 
 Operating (loss) / profit after 
  exceptional items                                 (5,654,232)      1,278,161 
 
 Finance expenditure                                  (125,426)       (43,980) 
 
 Finance income                                             224            220 
 
 
 
 (Loss) / profit before tax and 
  exceptional items                                 (5,779,434)      1,234,401 
 
 Income tax credit                                      551,866        216,327 
 
 
   (Loss) / profit for the year after 
   tax                                              (5,227,568)      1,450,728 
 
 
 
   Total comprehensive (expense) / 
   income for the year                              (5,227,568)      1,450,728 
 
 (Loss) / Earnings per share: 
 
  Basic                                    5            (4.09)p          1.14p 
 Diluted                                                (4.09)p          1.09p 
 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2018

 
 
                                                  2018          2017 
                                                   GBP           GBP 
 
 Assets 
  Non-current assets 
 Intangible assets                           6,222,819     5,810,954 
 Property, plant and equipment                 177,479       184,854 
 Deferred tax                                  272,688             - 
 
 
 Total non-current assets                    6,672,986     5,995,808 
 
 Current assets 
 Inventories                                 3,443,685     3,281,521 
 Trade and other receivables                 4,433,000     7,926,686 
 Cash and cash equivalents                   1,364,437     1,760,861 
 
 
 Total current assets                        9,241,122    12,969,068 
 
 Liabilities 
  Current liabilities 
  Trade and other payables                 (2,529,630)   (3,055,819) 
 Financial liabilities                     (1,650,000)     (500,000) 
 
 
 Total current liabilities                 (4,179,630)   (3,555,819) 
 
 Net current assets                          5,061,492     9,413,249 
 
 
 Total assets less current liabilities      11,734,478    15,409,057 
 
 Long term liabilities 
 Financial liabilities                     (2,000,000)     (500,000) 
 Deferred tax                                        -     (279,178) 
                                          ------------  ------------ 
 
 Total long term liabilities               (2,000,000)     (779,178) 
 
 
 Net assets                                  9,734,478    14,629,879 
 
 
 Shareholders' equity 
 Share capital                                 127,743       127,613 
 Share premium account                       4,905,549     4,872,779 
 Retained (loss) / earnings                  (789,410)     4,138,891 
 Other reserves                              5,490,596     5,490,596 
 
 
 Total shareholders' equity                  9,734,478    14,629,879 
 
 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARED 31 MARCH 2018

 
 
 
                                                      2018                 2017 
                                                       GBP                  GBP 
 
 Cash (used in) / generated 
  from operating activities                      (993,536)            1,235,380 
 
 Corporation tax received                                -              202,342 
                                            --------------       -------------- 
 
 Net cash (used in) / generated 
  from operating activities                      (993,536)            1,437,722 
                                            --------------       -------------- 
 
 Investing activities 
 
 Expenditure on product development            (1,876,920)          (1,389,371) 
 Purchase of property, plant 
  and equipment                                   (83,666)            (122,928) 
 Interest received                                     224                  220 
 
 
   Net cash used in investing 
   activities                                  (1,960,362)          (1,512,079) 
                                            --------------       -------------- 
 
   Financing activities 
 
  Net proceeds on issue of shares                   32,900               17,150 
   Repayments on loan                            (500,000)                    - 
   New loans issued                              3,150,000                    - 
   Interest paid                                 (125,426)             (43,980) 
                                            --------------       -------------- 
 
 Net cash generated from / (used 
  in) financing activities                       2,557,474             (26,830) 
 
 
  Net decrease in cash and cash 
  equivalents                                    (396,424)            (101,187) 
                                            --------------       -------------- 
 
   Net cash and cash equivalents 
   at beginning of year                          1,760,861            1,862,048 
                                            --------------       -------------- 
 
   Net cash and cash equivalents 
   at end of year                                1,364,437            1,760,861 
                                            ==============       ============== 
 

Notes

   1.         Status of financial information 

SRT is a public limited company incorporated in England and Wales whose ordinary shares of 0.1p each are traded on the AIM Market of the London Stock Exchange. The Company's registered office is Wireless House, Westfield Industrial Estate, Midsomer Norton, Bath BA3 4BS.

The Board of Directors approved this preliminary announcement on 20 July 2018. Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union, this announcement does not itself contain sufficient information to comply with all the disclosure requirements of IFRS and does not constitute statutory accounts of the Company for the years ended 31 March 2018 or 31 March 2017.

The financial information has been extracted from the statutory accounts of the Company for the years ended 31 March 2018 and 31 March 2017. The auditors reported on those accounts; their reports were unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006. The auditors, in forming their opinion on the financial statements, which is not modified have included in their report an emphasis of matter on the recoverability of receivables of GBP3.5m as disclosed in note 14 of the financial statements. The auditors also considered the adequacy of the disclosure made in note 1 of the financial statements concerning the Group's ability to continue as a going concern. Their opinion is not modified in respect of this matter.

The statutory accounts for the year ended 31 March 2017 have been delivered to the Registrar of Companies, whereas those for the year ended 31 March 2018 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

   2.         Basis of preparation 

This financial information has been prepared in accordance with the principles of International Financial Reporting Standards ("IFRS") as adopted by the European Union and International Financial Reporting Interpretations Committee ("IFRIC") recommendations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. For the purposes of the preparation of the consolidated financial information, the Group has applied all standards and interpretations that are effective for accounting periods beginning on or after 1 April 2017. There have been no changes in accounting policies during the year. The financial information has been prepared under the historical cost convention unless otherwise stated.

   3.         Dividends 

The Board is not recommending the payment of a final dividend.

   4.        Impairment charge 

During the year, the Company was advised by its customer that the contract to supply an MDM system in SE Asia had been postponed due to an internal project review and budget issues in the current year. The Board has therefore considered the project indefinitely suspended from an accounting point of view and has incurred an impairment charge of GBP1,490,315 during the year. The trade receivables balance was fully provided against.

   5.         Earnings per Ordinary Share 

The basic earnings per share has been calculated on the loss on ordinary activities after taxation of GBP5,227,568 (2017: profit GBP1,450,728) divided by the weighted number of ordinary shares in issue of 127,701,597 (2017: 127,583,214).

During the year, the Group incurred a loss on ordinary activities after taxation and therefore there is no dilution of the impact of the share options granted.

During the year ended 31 March 2017 the calculation of diluted earnings per share has been calculated on profit on ordinary activities after taxation of GBP1,450,728. 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 that could have been acquired at fair value, based upon the monetary value of subscription rights to outstanding share options. The number of dilutive shares under options was 5,775,672 and the weighted average number of ordinary shares for the purposes of dilutive earnings per share was 133,358,885.

   6.     Annual Report and AGM 

The Annual Report will be available from the Company's website, www.srt-marine.com from 23 July 2018. To locate the report, click "Investors" and then scroll down the page to "Reports and Presentations". The Annual Report and Notice of AGM will be posted to shareholders on 1 August 2018. The AGM will take place at the Centurion Hotel, Charlton Lane, Midsomer Norton, Radstock BA3 4BD at 11.00 a.m. on 5 September 2018.

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

FR LLFFRDVIIFIT

(END) Dow Jones Newswires

July 23, 2018 02:00 ET (06:00 GMT)

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