31.03.2025
Last Tuesday, 25th March, I highlighted that the shares of one of my favourites, SRT Marine Systems (LON:SRT) had so much to come, and that its shares then at 45p were being given away!
“Watch out this Thursday morning for the Interim Results being published by the maritime domain awareness systems and technologies group.
We already have had guidance that the six months to end-December 2024 will have shown a 363% uplift in revenues to £25.5m (£5.5m), with a big swing from £4.6m pre-tax losses breaking into £2.5m Interim profits.
I just love this stock – it is an investors dream play!
Rumours and counter-rumours have taken its shares up and down over the years however, it has not stopped increasing its product advancement as it increases its order books, dealing with some international Governments and companies.
Yes, I am a big fan of just what the company offers, and I reckon that its potential is absolutely ginormous.
Its shares, now at 45p, would be several times the price if the company’s shares were quoted on NASDAQ.”
So, what is Maritime Domain Awareness?
MDA entails the gathering of information and intelligence relating to any ship or vessel navigating within a country’s maritime boundaries.
By harnessing this wealth of data, a more complete understanding can be derived, and specifically around those maritime regions that pose potential threats to safety, the environment, and a nation’s economic interest.
This process is commonly referred to as ‘actionable intelligence.’
Through the application of actionable intelligence, authorities are empowered to effectively enforce maritime laws.
Furthermore, MDA plays a pivotal role in addressing a wide spectrum of issues, including anti-piracy, the interception of drug smuggling activities via maritime routes, and the prevention of other illicit endeavours associated with marine transportation.
SRT is an established leader in Maritime Surveillance
This £150m-capitalised group is an established leader in the rapidly developing global maritime surveillance and navigation safety market, which is now entering a long-term phase of rapid growth.
Its technology-driven products and systems enable marine stakeholders from nation-states to individual mariners to enhance their marine domain awareness and improve surveillance, intelligence, safety and security at sea, in ports, along waterways and coastlines.
SRT is leading the new generation of maritime security, safety and sustainability.
From national agencies such as Coast Guards to infrastructure owners and vessel operators, its technologies and systems are being adopted and rolled out globally, enabling a new era of maritime security, sustainability and navigation safety.
Coast Guards
Integrated national scale Dynamic-Ai powered systems that deliver a new horizon of maritime surveillance capability.
Fisheries
Professional fisheries monitoring and management systems that enable effective and efficient management of national fleets and IUU detection.
Ports & Waterways
Sophisticated devices for infrastructure that support the next generation of digital navigation.
Vessels
Communication devices for vessels that enable commercial and leisure vessels to operate more safely and efficiently.
Robust, Reliable, Proven
The marine environment is harsh and with over twenty years of experience SRT knows that and it has seen every extreme in every corner of the world.
Every SRT product and system is extensively product-engineered, manufactured and installed to operate reliably for many years in such environments.
Multiple features from the use of high-quality materials to embedded design features that mitigate the effects of shock, temperature, salt, water etc are found in every SRT solution.
The result are products that customers trust to perform with relentless reliability.
Speaking To Simon Tucker
On Thursday morning, 27th March, I spoke to Simon Tucker, boss of SRT, upon the release of a Trading Update for the group’s first-half results to end-December 2024.
I found him to be totally open about the group’s progress to date, its potential and its marketplace.
The first-half Trading Update for the six months to end-December reported a 476% increase in revenues to £26.2m (£5.5m), while swinging into a £2.8m pre-tax profit against the previous £4.6m loss.
The developer and supplier of maritime surveillance, analytics and management systems and products reported that it had five active nation states as customers for its SRT-MDA System.
Massive Order Book
It had some £320m systems business under contract, while it has a potential pipeline of £1.2bn of new prospects.
Commenting upon the Trading Update, Simon Tucker stated that:
"I am delighted with our operational and financial performance during the first half which is rooted in many years of hard work to build up our technologies, products and global market position.
As we expected we have seen solid revenues from both transceivers and systems divisions and look forward to continued growth into H2 and the years ahead."
That Order Book of £320m worth of ‘active system projects’ are due to be implemented over the coming two years, with the added buck of ongoing support contracts stretching between five to ten years thereafter.
As regular readers will know by now, I just love to see recurring revenues, and that is what follows on from systems delivery.
The Equity
There are some 249.9m shares in issue.
The larger holders include Hargreaves Lansdown Asset Management (8.75%), David Brierwood (8.22%), David Newlands (2.13%), Barclays Bank Private Banking (1.87%), Amati Global Investors (1.54%), Toscafund Asset Management (0.52%), HSBC Global Asset Management (0.51%), Jarvis Investment Management (0.27%) and iDealing.com (0.25%).
My View
SRT Marine has taken some 20 years to create, develop and then sell its systems and ongoing support services to its multi-national Government customers – and this year will see the start of the rewards from that process.
It has £320m of orders and a £1.2bn pipeline of potential business – so expect a stream of further contract news over the next few years.
The group’s shares put on a useful 33% last week, from 45p to 60p in price.
I would now expect some profit-taking to pull them back, BUT unless you are a very keen and smart market player, I would suggest that existing holders should stay firm, while new risk-tolerant investors should be looking to pick up cheap stock if it falls back.
However, I have no doubt that the group will be declaring new business over the next year or so, which will shoot its profits skywards, with its shares being pulled higher in the process.
I see them hitting at least 100p in 2025.
(Profile 14.09.20 @ 39.5p set a Target Price of 50p*)
(Profile 10.11.23 @ 39.75p set a Target Price of 60p*)
(Profile 25.04.24 @ 22p set a Target Price of 35p*)
Asterisks * denote that Target Prices have been achieved since Profile publication
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