SRT in the News

15th February 2010 - Growth Company Investor

SRT RATED AS SPECULATIVE BUY

Software Radio Technology (SRT), whose technology enables boats to locate and identify each other, is sensing a level of deal flow that should launch it into profitability and beyond.

The Bath-based company has become a leading supplier of the technology that enables the Automatic Identification System (AIS), which has been adopted as an international standard for ships and coastal authorities to automatically identify other vessels. All ships of over 300 tonnes are required to carry a Class A AIS transponder, while various authorities around the world will be enforcing mandates over 600,000 boats in the next few years.

In 2010, SRT has already seen, says founder and CEO Simon Tucker, 'a strong increase in demand for [simpler and cheaper] Class B products as mandates in Turkey and Singapore take off’. Furthermore, the European mandates for inland waterways and fishing vessels alone create demand for around 20,000 units retailing at around $3,000 apiece in the next 18 months, of which Tucker expects to capture the lion’s share.

His confidence is derived from the fact that the company’s technology sits inside ‘most AIS products out there’, generally in chart-plotting devices. Further potential demand should come from a newly developed Class A product that is much cheaper than those already on the market but still allows higher margins for SRT, and will begin shipping in the first quarter of the new financial year.

Tucker says he has already had to increase production forecasts in response to demand for the Class A unit, adding that this will make ‘a significant contribution to revenues and gross profit’. Most recent results, for the first-half to September, showed losses slashed from £402,000 to £31,000 year on year on revenues up 122% to £2.1m.

Although SRT has disappointed before, with deals now flooding in and markets like India, China and the US set to trigger further orders in coming years, its shares represent an attractive speculation.