The interim results for the six months to end September reported a substantial uplift in the group’s prospects.
The £82m capitalised company, which is based near Bath, is the global leader in Automatic Identification Systems based maritime domain awareness technologies, products and systems, which are used for vessels, ports, environment agencies, fisheries, and coast guards that deliver enhanced monitoring, surveillance, safety and security.
It markets its ranges across the globe to port owners and operators; and national authorities such as national defence agencies, fishery ministries, navies and coast guards who require sophisticated maritime surveillance and monitoring systems.
Excellent interims point to recovery continuing apace
For the six months to end September the group has reported £18.8m in revenues, up from £4.7m previously, while pre-tax profits came out at £2.1m compared to a £3.1m loss last time, with earnings of 1.17p (1.91p loss) per share.
Commenting upon both the business divisions performing well, CEO Simon Tucker stated that the trend is expected to continue going forward driven by the fundamental demand for maritime domain awareness. He went to note that
“Our systems business is now busy delivering on existing projects, preparing for new projects that we expect to come under contract in H2, as well as progressing a growing list of future prospects.”
Analyst Opinion – 100p Target Price plus new contracts
At finnCap, the company’s brokers, its analysts Lorne Daniel and Kimberley Carstens have fixed a Target Price of 100p against the current 45.5p.
They estimate that the group could see a major increase in current year revenues, to end March 2023, of £56.6m (£8.2m), with adjusted pre-tax profits of £6.8m (£6.4m loss) and generating earnings per share of 3.8p (3.3p loss).
They stated that after securing a small new coastguard deal last week, management continues to expect significant new Systems contracts to be announced in the coming months; five in particular worth £200m are currently in the final stages of lengthy contracting processes.
Conclusion – 27% gain in last two weeks – now to 55p?
At the end of last month we concluded that the shares of SRT Marine Systems, then just 35.75p, were for buying.
Although the group’s shares are now up over our initial 45p price aim in just two weeks, a near 27% gain in a very short period, we reckon that there is a great deal more left in this company’s upside.
Reflecting the group’s potential, perhaps a recovery to 55p, the pre-Pandemic share price level, is very possible in 2023.