21.01.2025
This coming Thursday, 23rd January, SRT Marine Systems (LON:SRT) will be holding its AGM and an Open Day at its premises near Bath.
The group, which is one of the UK Investor Shares Of 2025 selected on 30th December 2024, has seen its price increase from a then 42p up to 53p at one time yesterday, before closing at 50.50p.
Now could be an opportune time to pick up more stock before the meeting and subsequent market action on any subsequent corporate news.
The Business
The company is an established leader in the growing global market for maritime domain awareness.
It provides advanced technologies, products and systems, that integrate multiple proprietary technologies such as advanced analytics, data fusion, augmented visualisation, that enhance maritime safety, security and environmental protection and sustainability.
The group’s customers range from governments to vessel owners around the world.
It develops and supplies automatic identification system (AIS) based maritime domain awareness technologies, products, and systems.
The company offers systems, such as DAS-Digital ATON, a system that enhances port and waterway traffic control and navigation safety; NAIS-National Vessel Tracking System, a vessel identification and tracking system solution; MDM-Coastguard, a maritime domain surveillance system; VMS-Fisheries, a system for monitoring, managing, and controlling fishing vessels; and VTS-Ports and Waterways, a monitoring, managing, and controlling system for maritime infrastructure, ports, and waterways.
It also provides AIS Aids, VMS, search and rescue, vessel, and navigation transceivers; small boat trackers; fishing buoy trackers; base stations; display and data solutions; satellite data solutions; OEM AIS transceivers; and AIS transceiver modules, as well as develops and sells maritime communication products and systems.
The company's solutions are used in a range of maritime applications, such as maritime safety, security, management, and efficiency in waterways, ports and infrastructures, coasts, and open ocean.
It serves mariners, infrastructure owners, coast guards, and fishing authorities in the United Kingdom, rest of Europe, the Middle East, North America, South East Asia, and internationally.
Trading Update
On Thursday 16th January the group provided a Trading Update for the six months to end-December last year.
It reported that the first half-year saw a 363% advance in group revenue to £25.5m (£5.5m), which enabled the group to show a pre-tax profit of £2.5m (loss of £4.6m).
In that period the group signed up some £182m of new contracts, three of the four were from existing customers, while the other was from a new client.
Since the start of this year the group has also been given formal notice to proceed on another £12m of further system contracts.
The group’s transceivers business, providing marine navigation safety devices, received around £4.5m of orders, generated from its network of over 5,000 distribution partners.
They market to commercial and leisure vessel markets, as well as port and waterway authorities with the company’s specialist DAS product range.
The company, in November last year, officially launched its new NEXUS VHF communications transceiver to its distribution network and is now expecting to start shipments during the second half of this financial year to end-June.
The second half is expected to see increased seasonal driven demand from the retro-fit and new-build delivery leisure boat market and to commence shipments of the new NEXUS radio systems.
In the commercial vessel market, existing and new regulations that require vessels to fit and operate AIS transceivers will continue to drive demand, alongside several new national scale vessel fit mandates that are expected to commence during 2025.
Over at the larger systems business side, it generated revenues of some £21m, providing the sophisticated SRT-MDA integrated Ai driven C5iSR maritime surveillance system to sovereign agencies, such as Coast Guards and Fishing Agencies.
Going into the second half the group’s systems business will have £334m of active system projects covering the next two years.
Driven by the global macro-trend of sovereigns wanting to digitise and dramatically enhance their understanding, oversight and management of their marine domains, the company has a pipeline of specific new system opportunities from existing and new customers worth up to £1.2bn.
Management Comment
With the Trading Update CEO Simon Tucker stated that:
"This is a solid start to the year.
The combination of our transceivers business, a £334m active contract book from multiple sovereign customers, each with long term system development plans and a £1.2bn pipeline of further prospects gives us significantly improved visibility over future financial performance.
Both of our businesses are now well established and our future is underpinned by our portfolio of sophisticated technology and products, an established market position, and a global MDA market at the beginning of its growth curve."
In My View
I would expect to see some upgraded broker analyst estimates being published very soon.
As the market for maritime domain awareness continues to develop, the group expects to continue to convert and grow its £1.2bn pipeline of business.
I believe that this little £125m capitalised company has absolutely masses of value being created, with stacks more due to become apparent over the next few years.
The group will be holding its AGM in Midsommer Norton, near Bath, this Thursday and at the same time holding an Open Day for institutional and private investors to nose around.
Its shares, which were up to a 69p High in June 2023 and are now just 50.50p, will soon be on the run-up again and could well head over 70p and up to break the 100p level.
Don’t underestimate its potential.
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