SRT Marine Systems PLC MDM Contract Update (5086M)
31 July 2017 - 4:01PM
UK Regulatory
TIDMSRT
RNS Number : 5086M
SRT Marine Systems PLC
31 July 2017
SRT MARINE SYSTEMS PLC
(AIM: SRT)
("SRT" or the "Company")
MDM Contract Update
SRT Marine Systems plc ('SRT') has been advised by its customer
that the contract to supply an MDM system in SE Asia contracted in
March 2016 has been postponed and is expected to recommence during
the end customer's new fiscal year which begins on 1(st) March
2018.
SRT's European based customer who is the prime contractor to the
Asian government entity has been formally advised by the end
customer that, the postponement is due to internal project review
and budget issues in their current fiscal year.
The letter from the end customer to SRT's customer, which has
been shared with SRT, provides explicit confirmation of their
desire for the system, the continued validity of the contract and
associated payments, along with the revised timescales. Although
the formal communication by the end customer is clear and
re-assuring, given the significantly extended timescales, in line
with appropriate accounting practice the Board believes that it is
prudent to consider the project indefinitely suspended from an
accounting point of view.
The net effect of this will be an exceptional profit and loss
account impairment charge of GBP1.5m in the current financial year
(Year ending 31(st) March 2018). This figure includes the write
back of associated accrued project costs such as equipment as well
as all Directors bonuses that were accrued but not paid in the last
financial year. (Year ending 31st March 2017). The associated net
receivable of 2.2m is written off within this impairment charge.
Upon recommencement of the project these monies will be paid,
contractual deliverables completed along with associated
revenues.
Simon Tucker, CEO of SRT Marine Systems plc said: "The receipt
of this news was both surprising and disappointing. This is the
only project where SRT is not actively engaged with the end
customer at a senior decision making level and thus we must rely
entirely on our customer for information and instruction. There is
a clear imperative for the country in question to significantly
enhance their maritime domain awareness and this fact is reflected
in the formal letter from the end customer which confirms the
validity of the contract and that the project will recommence in
their new financial year. However with an indeterminate restart
date and therefore payment date it is right that we maintain a
prudent accounting approach and make a full provision at this time.
However I note the clear and formal commitment from the end
customer to this project and to move forward with it during 2018.
Thus this remains a very significant pending project for SRT."
ENDS
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 / Simon +44 (0) 20 7220
Hicks (Corporate Finance) 0500
Emily Morris / Camille Gochez
(Corporate Broking)
About SRT Marine Systems plc:
SRT develops, manufactures and supplies maritime vessel 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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