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Software Radio Technology

  • BY: Andrew Hore |
  • POSTED: 14/03/2013 |

AIS marine positional technology developer Software Radio Technology has received more than $7m worth of frame orders from North America.

North America has been expected to mandate the AIS marine technology for some time and they should be enforced in the US later this year. SRT should recognise $2.6m of this order, which is for higher margin Class A devices, in the financial year to March 2013. This will help to offset the lack of European orders. SRT recently announced an initial order from India.

However, the timing of the rest of the North American order is uncertain and depends on the pace of take up of the systems. WH Ireland believes the US market alone could be worth $37.5m to SRT.

The main concern among investors appears to be a lack of visibility of revenues due to the lumpy nature of the contracts. This year’s revenues are expected to rise sharply but they are likely to be slightly lower than in 2010-11. A significant jump in revenues from £8.9m to £15m is forecast for 2013-14 but the market may want more reassurance about the company’s ability to achieve the target before a more significant recovery in the share price.

At 22.25p a share, up 2.12p, SRT is valued at £25.8m. The shares are trading on 25 times prospective 2012-13 earnings. House broker WH Ireland believes that the profit could more than quadruple to £3.1m in 2013-14.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMarch2013_42.pdf

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