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SRT Marine Systems plc (SRT), a leading global provider of maritime domain awareness systems and technologies for security, safety, and environmental protection, has issued a trading update that highlights the company's current performance and future outlook.
Project Revenue Delays Impact Financial Year
SRT's business segments, including systems and transceivers, continue to progress well within the strategic global maritime domain awareness market. However, the company has faced unexpected delays in achieving new project revenue milestones within its systems business. These delays are attributed to prolonged customer contract completion administrative processes, which have deferred anticipated revenues into the early part of the next financial year. Consequently, the company's revenue for the current year is expected to be approximately £14 million, primarily derived from the transceivers division, leading to a financial loss for the period.
The two major projects experiencing these delays involve one existing Middle Eastern Coast Guard Customer ("Customer 1") and a new Southeast Asia National Coast Guard Customer ("Customer 2").
Customer 1: Middle Eastern Coast Guard Project
The project with Customer 1 has a total value of £40 million, divided into three phases:
- Phase 1: Completed in 2023, valued at £16 million.
- Phase 2: Valued at £12.5 million, was expected to commence in the second half of the current financial year. However, the finalization and award process has been delayed due to frequent amendments to the project scope and necessary redrafting and verification of project documentation. The scope of Phase 2 is now formally agreed, and the customer expects to issue formal documentation and notice to proceed within the next few weeks. Nonetheless, initial deliveries and milestones worth approximately £9 million are likely to fall into the new financial year.
- Phase 3: Valued at £11.5 million, is scheduled to start in early 2025 as planned.
Customer 2: Southeast Asia National Coast Guard Project
In May 2023, SRT signed a binding project contract worth £140 million to deliver an SRT C5iSR system for a sovereign Coast Guard, financed by an inter-government loan between the UK Export Finance (UKEF) and the respective country. While initial expectations were for the loan process to complete by early 2024, the inter-government interactions have proceeded slower than anticipated. Recent progress suggests a June completion target, but a more realistic expectation is early in the new financial year. This timeline would shift the first milestones, worth approximately £45 million, into the new financial year.
Positive Future Prospects
Despite these delays, SRT has made significant progress on other fronts. Notably, the company has advanced several substantial projects:
- Two projects in Southeast Asia valued at approximately $50 million.
- Two projects in the Middle East worth $9 million and $200 million.
- A project in Africa valued at approximately $200 million.
- Another project in Southeast Asia with an indicative value of $100 million.
These projects, primarily with sovereign coast guards, represent the initial phases of large national maritime surveillance systems and demonstrate the strong demand for SRT's solutions.
Outlook
SRT remains committed to its strategic goals and is optimistic about future opportunities. The company’s focus on enhancing maritime domain awareness for security, safety, and environmental protection continues to drive its growth. With several large-scale projects in the pipeline, SRT is well-positioned for a robust financial performance in the upcoming financial year.
