SRT Marine Systems LON:SRT, the AIM-listed engineering firm that builds maritime surveillance and security products, published its half-year results to end-December last week.
SRT finds itself at the fulcrum of global debate on illegal migration. Today (31st March), the UK hosts a two-day, international summit involving 40 countries seeking to create a culture of international cooperation to tackle people-smuggling. Invitees included both countries that are dealing with issues of inward illegal migration, as well as countries where many migrants originate, including Vietnam, Iraq and Albania.
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Domestically, the centrist UK government is facing pressure from parties further to the right on the political spectrum, who argue that the Labour government is unable to get a grip on the issue. The country is entering a period of local elections, and although the outcome will not change the national government in Westminster, it will act as an early barometer for the popularity of a government not yet a year-old, with immigration as a key issue.
Increased investment in maritime surveillance
There is money in the immigration game. People-smuggling gangs wouldn’t do it unless it was incredibly lucrative – and people-smuggling is overtaking drug-smuggling in terms of profitability and popularity amongst international criminal networks. On the other side of the divide, customs and coastguard forces are in an escalating financial race with the smugglers, who are getting more technically advanced. It is going to cost a lot of money to fix this situation. The UK government committed an additional £33m today to efforts to disrupt people-smuggling networks and boost prosecutions.
SRT, whose core markets are fisheries authorities and national coastguard services, will hope to be a beneficiary of this heightened focus on international illegal migration. Kevin Finn, chairman, said: “The future of our systems business is increasingly bright, driven by a long-term global trend of sovereigns wanting to digitise and dramatically enhance their understanding, oversight and management of their marine domains […] Our large forward contract order book of approximately £320m, combined with a developing global market for our technologies which are underpinned by fundamental factors such as national security, navigation safety and marine environment protection and sustainability, all mean we are optimistic about H2 and the years ahead.”
The company reported significant increases in half-year revenues – over 375% compared to interim period to 30 September 2024 – to £26.2m, with £2.8m profit before tax, a welcome comparison to a £4.6m loss in the corresponding period.
As previously reported, SRT Marine Systems is a global leader in maritime domain awareness technologies, products and systems, with two divisions: Systems and Transceivers. The company develops and provides integrated maritime surveillance, monitoring, management and safety systems which are used by coastguards and fishery authorities for the purposes of managing and controlling their maritime domain. The SRT Vessel Monitoring Systems (VMS) system enables governments and national authorities to be able to reliably track, monitor and manage vessels of any size and type in real time without range limitation at optimal cost.
Significant Kuwait contract
Highlights included a $213m contract win from the Kuwaiti Ministry of Interior to supply an integrated maritime surveillance system, which may have been the ‘late contract from the Middle East’ that the firm was expecting to be ratified, but was delayed for bureaucratic reasons, forcing SRT to change its accountancy period. The company also increased its cash reserves from £3.9m in 1H23 to £4.5m.
SRT currently supports maritime security systems in five nations in Asia and the Middle East, and says that it has £320m-worth of systems under contract with a further £1.2bn of potential customers.
Simon Tucker, SRT’s chief executive said in a statement: “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.”
The good news has been good for shareholders too, with shares starting to track in the right direction once again. Issues surrounding a legal case against Tucker in the Philippines are moving forward through the courts system, with SRT and its CFO, Richard Hurd cleared and the case against Tucker moving: “[…] towards a clear resolution.”
SRT Marine Systems shares double value in a year
SRT shares opened the week (31st March) at 59.33p, rising to 61p within the first two hours of trading, up 103% over one-year, and up 47% year-to-date. The company has a market cap of £152.5m.
SRT stands at the crossroads of a rapidly evolving maritime security landscape. With surging demand for its cutting-edge surveillance solutions, a robust pipeline of contracts, and growing international investment in combating illegal migration, the company is well-positioned for continued expansion. While legal uncertainties persist, its financial performance and strategic wins, including the landmark Kuwaiti contract, underscore investor confidence. As governments worldwide ramp up their maritime security efforts, SRT’s trajectory suggests that its role in shaping the future of maritime domain awareness is only just beginning.
