SRT Marine pushes out year-end as it bids for new system contracts

8th Mar 2024 09:54

(Sharecast News) - Maritime surveillance and navigation technology specialist SRT Marine Systems announced a change to its financial reporting dates on Friday, in a bid to safeguard its ability to bid for pending new system contracts.

The AIM-traded firm said it had resolved to extend its financial year-end from 31 March to 30 June, adding three months to the current financial year.

It said it planned to publish audited final results for the extended period by October, with subsequent financial reports to follow a revised schedule, with unaudited interim results for the six months ended 31 December due by 31 March, and audited final results for the 12 months ended 30 June by 31 December each calendar year.

The board said the decision to extend the financial year-end stemmed from the need to meet minimum financial ratio criteria in a specific jurisdiction to bid and contract for new projects.

Concerns arose due to the potential delay in completing existing system project deliveries, expected in March, primarily attributed to government processes and paperwork, compounded by the annual Ramadan and EID periods.

Such delays could impact financial ratios, which SRT said jeopardised its ability to pursue new projects, prompting the board to mitigate the risk.

In December, SRT successfully completed a £10.5m equity cash raise, bolstering its balance sheet and ensuring financial stability.

The company said it was awaiting government agencies in three countries to finalise processes for executing initial revenue milestones on projects valued at $220m.

Despite the paperwork completion concerns, SRT reported significant progress in all system project opportunities over the past three months, with increasing visibility and confidence in timelines.

Notably, the firm released and was implementing an enhanced version of its 'GeoVS' maritime surveillance system, featuring improvements in functionality and performance, including faster data processing and enhanced analytics capabilities.

On the operational front, SRT reported a solid performance in its transceivers business, maintaining gross profit margins following the normalisation of supply chain and market conditions post-Covid.

The DAS subdivision showed promise with a growing pipeline of opportunities, while the NEXUS marine voice and communications system was progressing through testing and validation stages, with initial field trials underway.

Looking ahead, SRT maintained its revenue expectations for the extended 15-month period ending 30 June, consistent with previous projections for the 12 months ending 31 March.

"Our recent £10.5m fundraise has placed us in a strong cash position where we can confidently make these decisions and maximise our market opportunities," said chief executive officer Simon Tucker.

"The decision to move our financial year end date mitigates the risk that a few weeks delay on paperwork could exclude us from some significant new contract opportunities."

At 0924 GMT, shares in SRT Marine Systems were down 6.96% at 29.4p.

Reporting by Josh White for Sharecast.com.