TIDMSRT
RNS Number : 1405P
SRT Marine Systems PLC
15 November 2016
SRT MARINE SYSTEMS PLC ("SRT" or the "Group")
HALF YEARLY REPORT FOR THE SIX MONTHSED 30 SEPTEMBER 2016
SRT, the AIM-quoted developer and supplier of maritime
identification and tracking technologies, announces its unaudited
interim results for the six months ended 30 September 2016 (the
"Period").
Financial Highlights
-- Revenue of GBP2.7 million (2015: GBP3.6 million)
-- 45% gross profit margin (2015: 51%)
-- Overheads GBP2.4 million (2015: GBP2.6 million)
-- Loss before tax of GBP1.2 million (2015: loss before tax of GBP0.7 million)
-- Cash of GBP1.8 million at the Period end (2015: GBP2.4 million)
-- Inventories of GBP4.4 million at the Period end (2015: GBP5.2 million)
Operational Summary
-- Continued evolution of GeoVS maritime display and management system
-- Launch of new Apollo AIS Class A and Class B transceivers
-- Em-trak dealer acquisition and merchandising programme
-- Significant progress with multiple project opportunities
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.
Contacts:
SRT Marine Systems plc www.softwarerad.com
+ 44 (0) 1761 409 500
Simon Tucker (CEO) simon.tucker@softwarerad.com
Louise Coates (Marketing media@softwarerad.com
Manager)
WH Ireland Limited www.whirelandplc.com
Tim Feather
Ed Allsopp +44 (0) 113 394 6600
Chairman's Statement
Revenues for the first half were GBP2.7 million (2015: GBP3.6
million), resulting in a loss before tax of GBP1.2 million (2015:
GBP0.7 million) and a cash balance of GBP1.8 million (2015: GBP2.4
million) as at 30 September 2016. First half revenues were lower
this year due to there not being any significant project
deliverables completed during the Period. Gross profit margin for
the Period was 45% (2015: 51%), which is below our long term
average target of 50% reflecting the revenue weighting of our lower
margin OEM business. Overheads were slightly lower than the same
period last year, consistent with our tight controls and strategy
of out sourcing non-core and low value add activities such as
manufacturing and in-country project installation work. Saleable
stock, valued at cost, stood at GBP4.4 million and comprised a
mixture of standard AIS transceivers which are configured at the
point of dispatch for the relevant customer and project.
During the first half, sales of our individual AIS transceiver
products into the EU and US commercial and leisure markets via our
OEM and em-trak sales channels were consistent with those of the
previous year and accounted for the majority of revenues. Sales via
these channels are determined either by voluntary purchases by
leisure and commercial vessel owners driven by their own perception
and understanding of the benefits of AIS, or demand driven by a
regulation/mandate each of which has their own demand pattern
determined by the terms and conditions of each specific regulation
and underpinning enforcement.
There are now several AIS regulations/mandates active around the
world: EU Fisheries, EU Commercial Inland Waterways, Russia, China,
Singapore, Mauritius and USA. Rigorous enforcement of such
regulations on affected vessels is key to the creation of demand
for our transceivers through our OEM and em-trak dealer networks.
In our experience enforcement is usually variable and patchy, and
in some instances such as USA and EU Fisheries results in demand
spread over several years in a random pattern.
The USCG AIS regulation, which requires a significant number of
large commercial vessels in the USA to fit an AIS transceiver, came
into effect in March 2015. However due to a lack of strict
enforcement action by the relevant authorities, demand from this
market has been minimal to date and is now considered likely to
take a number of years to come through as enforcement is
undertaken. We continue to work closely with our OEM partners to
ensure they have a compelling AIS product offering in their marine
electronics portfolio and aggressively grow our own em-trak dealer
network and per-dealer sales throughput by the introduction of
enhanced point of sale merchandising which highlights the features
and benefits of AIS to non-regulated leisure and commercial vessel
owners.
Our systems business provides turn-key maritime monitoring
solutions for national maritime security, safety, fisheries
monitoring, ports and waterways. We have developed three core
offers which target specific maritime domain awareness market
segments. Our MDM system offer provides national scale integrated
functionality for coast guards, our VMS system provides a
comprehensive national fisheries monitoring solution and our VTS
system provides functionality that is optimised for port and
infrastructure applications. This business is driven by a general
global trend to significantly increase the monitoring of maritime
activity and the prevalence of AIS as a critical path technology in
maritime monitoring. Typically these are complex, large government
projects and thus involve extensive pre-implementation and
regulatory evaluation and planning work prior to contract signing.
Once contracts are signed and work commences, the completion and
therefore invoicing of project milestone deliverables can take many
months due to component lead times, shipping and customs, and
finally installation and commissioning.
During the first half we received high profile orders for our
VTS systems from the Panama Canal, Trinity House and a second large
port in Malaysia. These are important references for the market and
are now proving to be valuable for SRT in building up our
relatively new ports and infrastructure business. In addition, I am
pleased to report that during the Period we saw significant
progress in a number of large VMS and MDM projects that we expect
will result in the completion of significant deliverables during
the second half as well as other projects moving towards contract
phase from our validated sales opportunity pipeline. The nature of
these projects is that they are very lumpy with extended periods
between deliverables and often change unexpectedly in terms of
timing and scale. However, we expect that SRT will soon have
multiple projects underway which we hope will provide a natural
hedge in regards to revenue timings across our reporting periods.
Most of our projects are considered to be of national strategic
importance and thus SRT is subject to strict confidentiality which
places significant restrictions on the details we can provide
shareholders on the status of these projects.
Operationally, we continued to invest in new core technologies,
derivative products and the development of new functionality for
existing products. Approximately half our R&D effort is focused
on AIS transceiver equipment and half on the evolution of our GeoVS
network management, display and analytics software which forms an
important component in our MDM, VTS and VMS system offers. Notable
milestones during the Period include the launch of the world's
first SOTDMA 5W Class B which targets small commercial and larger
off-shore leisure vessels, our new Class A which is being marketed
as a premium product to Navies and Coast Guards and new releases
with added functionality of our GeoVS data network management,
display and analytics system for our respective MDM, VMS and VTS
system offers.
In August we successfully negotiated a revised agreement with
exactEarth such that it was non-exclusive to enable us the freedom
to maximise future recurring revenue satellite data opportunities
in relation to our projects. Our transceivers and systems can now
be configured and optimised to different satellite constellations
and data feeds according to customer requirements, providing both
SRT and our customers with great flexibility and opportunities.
Looking to the future, SRT's strategy has placed it as the
global leader in AIS technology, products and systems and our
ongoing R&D investments are realising real and notable
innovations. Our recent successful completion of a national
maritime monitoring system in Bahrain in under nine months and the
supply of VTS systems to the Panama Canal and leading ports in
Malaysia has further helped establish SRT and its partners as the
go-to company in this field for authorities. The development of
projects in our sales opportunity pipeline and the emergence of new
opportunities are driven by AIS having become established as a
critical path technology in virtually every maritime domain
awareness initiative. As such we continue to look to the future
with great optimism and will update the market with further
announcements and guidance as project deliverables are completed
and new projects commence.
Simon Rogers
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2016
Six months Six months Year
ended ended ended
30 Sep 30 Sep 31 Mar
2016 2015 2016
Unaudited Unaudited Audited
GBP GBP GBP
---------------------------- ---- -------------- --- -------------- ----------------
Revenue 2,658,748 3,635,090 10,683,639
Cost of sales (1,454,393) (1,792,936) (5,515,775)
---------------------------- ---- -------------- --- -------------- ----------------
Gross profit 1,204,355 1,842,154 5,167,864
Administrative expenses (2,382,172) (2,562,323) (4,847,591)
Operating (loss) / profit (1,177,817) (720,169) 320,273
Finance expenditure (23,298) (24,590) (45,549)
Finance income 153 285 645
(Loss) / profit before
income tax (1,200,962) (744,474) 275,369
Income tax credit 3 244,931 228,874 158,305
---------------------------- ---- -------------- --- -------------- ----------------
(Loss) / profit for
the period (956,031) (515,600) 433,674
---------------------------- ---- -------------- --- -------------- ----------------
Total comprehensive
(loss) / income for
the period (956,031) (515,600) 433,674
---------------------------- ---- -------------- --- -------------- ----------------
(Loss) / earnings per
share:
Basic
Diluted 2 (0.75)p (0.40)p 0.34p
2 (0.75)p (0.40)p 0.33p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2016
As at As at As at
30 Sep 30 Sep 31 Mar
2016 2015 2016
Unaudited Unaudited Audited
Notes GBP GBP GBP
------------------------------ ------ -------------- ------------ -------------
Assets
Non-current assets
Intangible assets 6,057,548 5,975,813 6,076,204
Property, plant and
equipment 134,228 115,265 139,269
------------------------------ ------ -------------- ------------ -------------
Total non-current
assets 6,191,776 6,091,078 6,215,473
Current assets
Inventories 4,372,392 5,182,750 4,258,556
Trade and other receivables 4,109,957 1,140,981 4,726,522
Cash and cash equivalents 1,817,786 2,367,002 1,862,048
------------------------------ ------ -------------- ------------ -------------
Total current assets 10,300,135 8,690,733 10,847,126
Liabilities
Current liabilities
Trade and other payables (3,160,835) (1,583,923) (2,849,583)
Financial liabilities (250,000) (1,000,000) -
------------------------------ ------ -------------- ------------ -------------
Total current liabilities (3,410,835) (2,583,923) (2,849,583)
Net current assets 6,889,300 6,106,810 7,997,543
Long term liabilities
Financial liabilities (750,000) - (1,000,000)
Deferred tax (250,573) (222,593) (293,163)
------------------------------ ------ -------------- ------------ -------------
Total long term liabilities (1,000,573) (222,593) (1,293,163)
------------------------------ ------ -------------- ------------ -------------
Net assets 12,080,503 11,975,295 12,919,853
------------------------------ ------ -------------- ------------ -------------
Shareholders' equity
Ordinary shares 4 127,593 127,513 127,513
Share premium 4,867,599 4,855,729 4,855,729
Other reserves 6 5,490,596 5,490,596 5,490,596
Retained earnings 1,594,715 1,501,457 2,446,015
Total shareholders'
equity 12,080,503 11,975,295 12,919,853
------------------------------ ------ -------------- ------------ -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2016
Six months Six months Year
ended ended ended
30 Sep 30 Sep 31 Mar
2016 2015 2016
Unaudited Unaudited Audited
Notes GBP GBP GBP
----------------------------------- ------------ ------------ -------------
Cash generated from
operating activities 5 434,278 451,917 853,394
Corporation tax received 202,342 461,794 451,468
------------------------------ ---- ------------ ------------ -------------
Net cash generated
from operating activities 636,620 913,711 1,304,862
------------------------------ ---- ------------ ------------ -------------
Investing activities
Expenditure on product
development (636,389) (639,601) (1,453,370)
Purchase of property,
plant and equipment (33,298) (44,835) (106,572)
Interest received 153 285 645
------------------------------ ---- ------------ ------------ -------------
Net cash used in
investing activities (669,534) (684,151) (1,559,297)
------------------------------ ---- ------------ ------------ -------------
Cash (outflow) /
inflow before financing (32,914) 229,560 (254,435)
------------------------------ ---- ------------ ------------ -------------
Financing activities
Net proceeds from
issue of ordinary
share capital 11,950 10,800 10,800
Interest paid (23,298) (24,590) (45,549)
------------------------------ ---- ------------ ------------ -------------
Net cash outflow
from financing activities (11,348) (13,790) (34,749)
Net (decrease) /
increase in cash
and cash equivalents (44,262) 215,770 (289,184)
------------------------------ ---- ------------ ------------ -------------
Cash and cash equivalents
at beginning of period 1,862,048 2,151,232 2,151,232
------------------------------ ---- ------------ ------------ -------------
Cash and cash equivalents
at end of period 1,817,786 2,367,002 1,862,048
------------------------------ ---- ------------ ------------ -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2016
Share Share Retained Other Total
Capital Premium Earnings Reserves
GBP GBP GBP GBP GBP
Balance at 31 March
2015 127,453 4,844,989 1,993,437 5,490,596 12,456,475
Comprehensive loss
for the period - - (515,600) - (515,600)
Share based payment
expense - - 23,620 - 23,620
Issue of equity
share capital 60 10,740 - - 10,800
Balance at 30 September
2015 127,513 4,855,729 1,501,457 5,490,596 11,975,295
Comprehensive profit
for the period - - 949,274 - 949,274
Share based payment
expense - - (4,716) - (4,716)
Balance at 31 March
2016 127,513 4,855,729 2,446,015 5,490,596 12,919,853
Comprehensive loss
for the period - - (956,031) - (956,031)
Share based payment
expense - - 104,731 - 104,731
Issue of equity
share capital 80 11,870 - - 11,950
Balance at 30 September
2016 127,593 4,867,599 1,594,715 5,490,596 12,080,503
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 2017.
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 2016 have been filed with the Registrar of
Companies. The report of the auditors on those statutory accounts
was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or
(3) of the Act.
The financial information for the six months ended 30 September
2016 and 30 September 2015 is unaudited. The interim financial
statements will be available to download on the Company's website
www.softwarerad.com from 15 November 2016.
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 2016, which are the same policies
expected to apply for the year ended 31 March 2017.
2. Earnings per share
The basic (loss) / earnings per share have been calculated using
the loss for the period of GBP956,031 (six months ended 30
September 2015 - loss of GBP515,600; year ended 31 March 2015 -
profit of GBP433,674) divided by the weighted average number of
ordinary shares in issue of 127,560,179 (six months ended 30
September 2015, 127,459,304 and year ended 31 March, 2016
127,485,789).
During the six months ended 30 September 2016 and 2015 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 2016, the diluted earnings per share
have been calculated using weighted diluted shares of
130,424,235.
3. Income tax credit
During the period, the Group received income tax credits of
GBP202,342 (six months ended 30 September 2015 GBP461,794 and year
ended 31 March 2015 GBP451,465) in respect of its Research and
Development activities. A further credit in relation to a decrease
of GBP42,589 in the deferred tax liability has resulted in a total
tax credit for the period of GBP244,931.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected annual earnings.
4. Called up share capital
30 Sep 30 Sep 31 Mar
2016 2015 2016
Unaudited Unaudited Audited
GBP GBP GBP
------------------------------- ----------- ---------- ----------
Allotted: (Ordinary
shares of 0.1p each): 127,593 127,513 127,513
-------------------------------- ----------- ---------- ----------
Share capital reconciliation: Number
of shares
Shares outstanding at 31 March 2015 127,452,419
a) Exercise of employee share options 60,000
Shares outstanding at 30 September 2015
and 31 March 2016 127,512,419
b) Exercise of employee share options 80,000
Shares outstanding at 30 September 2016 127,592,419
a) The exercise of employee share options took place in
September 2015 at an exercise price of 18p.
b) The exercises of share options took place in April 2016 at an
exercise price of 18p and July 2016 at exercise prices of 2.5p and
29p.
5. Cash from operations
Six months Six months Year
ended ended ended
30 Sep 30 Sep 31 Mar
2016 2015 2015
Unaudited Unaudited Audited
GBP GBP GBP
---------------------------- ------------ ----------- --------------
Operating (loss) /
profit (1,177,817) (720,169) 320,273
Depreciation of property,
plant and equipment 38,338 40,113 77,846
Amortisation of intangible
fixed assets 655,045 718,953 1,432,331
Share-based payment
charge 104,731 23,620 18,904
(Increase)/ decrease
in inventories (113,836) (221,791) 702,403
Decrease / (increase)
in trade and other
receivables 616,565 463,441 (3,122,100)
Increase in trade
and other liabilities 311,252 147,750 1,423,737
Net cash generated
from operations 434,278 451,917 853,394
----------------------------- ------------ ----------- --------------
6. Statement of movement in shareholders' equity
Other reserves consist of: Capital Redemption Reserve GBP2,857
(31 March 2016: GBP2,857), Warrants Reserve GBP62,400 (31 March
2016: GBP62,400) and Merger Reserve GBP5,425,339 (31 March 2016:
GBP5,425,339). There were no movements during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
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