SRT Marine Systems delivered a breakout year, with revenue up 46% and profits rising more than sevenfold as the maritime surveillance specialist ramped up delivery of large government contracts.
The AIM-listed group, which supplies coastal and border surveillance systems to national governments as well as vessel-tracking safety technology, reported revenue of £114.1m for the year to 30 June, up from £78.0m. Pre-tax profit jumped to £10.7m from £1.4m, and the business generated £37.7m of cash from operations, against barely £1m a year earlier.
Cash balances increased to £57.1m, although investors should note that £27.4m is restricted, held as security for performance bonds on live projects, leaving a smaller pool of freely available cash.
From a valuation perspective, the market cap of £196m looks a little more sensible on the back of these numbers, but the stock certainly doesn’t look cheap, even after falling 20% so far this year.
Strong order book
Investors should be encouraged by the order book, which stood at £539.5m after SRT converted £218.4m of new system contracts during the year.
The company now counts five active government customers with a sixth signed up, and said its pipeline of “validated” prospective opportunities had grown to £2.4bn, though that figure reflects potential work rather than booked orders.
On the product side, SRT pointed to the commercial launch of its NEXUS data and voice transceiver and continued investment in its core surveillance and command-and-control technology.
Simon Tucker, CEO of SRT, said: “These results demonstrate how rapidly we are developing and growing as a global leader in sovereign civil defence systems. Despite converting 12% of our previously reported £1.8bn pipeline during the year we have grown the pipeline itself to £2.4bn and I expect to see conversion to continue at pace.”