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Software Radio Technology

  • BY: Andrew Hore |
  • POSTED: 13/06/2010 |

Software Radio Technology is starting to benefit from governments making AIS marine positional technology mandatory.

Existing mandates cover 500,000 vessels over the next three years and there are more to come. SRT supplies the key technology to the marine technology businesses that sell the end product. That means that sales should grow over the next few years.

SRT increased its revenues from 2.52m to 3.56m in the year to March 2010. The loss was cut from 1.28m to 386,000. The former TETRA radio operations were all closed down in the previous year.

SRT already had an order book worth $4m by the beginning of this financial year. Most of this should be for delivery over two or three months and the majority are the newer Class A transceiver where gross margins are higher. That means that SRT should generate more in revenues in the six months to September 2010 than in the previous year.

Gross margins could reach around 50% depending on the change in the product mix. Overheads should not go above 2m a year so SRT has a good chance of moving into profit in the first half of this year.

At the moment SRT controls the cheaper priced end of the market and there is little competition but this will not be true for ever. SRT continues to spend on R&D so that it can maintain a lead on any competitors.

SRT has a strong balance sheet because it is able to demand advance payments from customers. There was 952,000 in the bank at the end of March 2010.

At 22.75p a share, SRT is valued at 22.3m.

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