SRT Marine Technology in the News

15th February 2007 - Western Daily Press

US Breakthrough for West Pioneers

BY JOHN FOX-CLINCH DEPUTY BUSINESS EDITOR

Coast Guard approves UK design for device to identify small vessels

The US Coast Guard opened the door yesterday to a potential sales bonanza for West hi-tech communications specialist Software Radio Technology. Over two million shares in the Somerset company changed hands and their value shot up by more than 10 per cent after the Coast Guard announced approval for the Midsomer Norton firm's ground-breaking device for identifying and tracking small boats.

The AIS Class B transceiver is billed as the world's first low-cost device to allow authorities to keep track of small commercial and leisure vessels.

As well as the obvious safety advantages, the transceiver is also used in the fight against sea-borne terrorism.

SRT does not manufacture the devices but licenses its technology to other firms and also takes a royalty on each unit sold.

Managing director Simon Tucker said: "With this technology we are the only boys in town.

"Although approval doesn't equal revenue each unit sold will be worth an average of $100 to us in royalties - that could be worth $150 million over the next two to three years in the US alone especially if the Federal Communications Commission makes it a legal requirement for boat owners."

Sales of AIS systems have been growing since 2002 when they were made compulsory for ships over 300 tonnes.

Mr Tucker said: "We took a risk two years ago to develop a less expensive system for smaller vessels.

"It cost us millions to develop but that is now paying off. We believe this paves the way for the wider rollout of AIS. With more than 12m boats in the US, this is clearly a very exciting prospect."

SRT is working with more than 20 manufacturers to launch Class B transponders worldwide this year.

The company also licences technology for manufacturers of other wireless security tracking and digital communications such as Tetra - the radio communications network used by the police and emergency services.

With a workforce of around 60, the company is working flat out to meet demand for its products including a deal with a Chinese manufacturer to supply Tetra to the Chinese Air Force.

But software development problems and delays with other orders have put back production and royalty revenue by six months.

As a result SRT posted first-half losses in December up from £557,000 to £1.34m on revenue down from £1.22m to £843,000.

"People investing in our company need to have an 18-month view," said Mr Tucker.

"We are sticking steadfastly to our strategy and it is working. Some 70 per cent of Tetra manufacturers use our technology and that amounts to potential sales of millions around the world.

"Tetra could be bigger than AIS - we do not want to over-egg expectations but the market is locked in with our manufacturing customers."

Shares closed at 46.5p, up 4.5p or 10.71 per cent.