Target: SRT’s surveillance kit helps tackle piracy at sea
About 90 percent of world trade takes place at sea. That means a lot of boats – some eight million by the latest estimates – from giant tankers to small tugs. While large vessels are equipped with advanced tracking equipment, the vast majority of smaller vessels are not monitored, especially in emerging markets. Small craft carrying a few tons of cargo, fishing boats, criminal gangs smuggling goods or even people – these ships go where they want, when they want and no one really knows their movements.
This maritime free-for-all is in stark contrast to the policing of our skies, where over £8 billion a year is spent on air traffic control and regulators know the identity and movement of virtually every aircraft in action.
However, times are starting to change. With the world becoming less stable and national security becoming a very real concern, many governments recognize the need to take control of their territorial waters. SRT Marine Systems is the ideal place to take advantage of this.
Based in Midsomer Norton, a small town on the edge of the Mendip Hills, SRT is a market leader in maritime surveillance, working primarily with countries in the Middle East and Asia so they know who is on their shores is doing.
Founded in 1987 and floated on the stock exchange in 2005, SRT has spent years developing its technology. There have been setbacks along the way, including the pandemic, as things dried up and shares fell from 55p to 29p.
Today, however, the outlook is rosy. The company is working on contracts worth over £70m, there is a confirmed pipeline worth £600m and talks are underway that should bring that figure significantly higher.
The shares are 37p and are expected to more than double in the next 12 months and beyond.
SRT initially focused on black boxes – also known as transceivers – that were mounted on ships so that coast guards could monitor their whereabouts and prevent collisions at sea. Today, transceivers have become much more sophisticated and are complemented by high-tech onshore systems that reveal a ship’s precise identity and location and show coastal authorities if any form of illegal or illegal activity is underway.
The systems have multiple uses. In the fishing industry, careful monitoring can ensure that boats stay within their set quotas and source their catch in a sustainable manner.
This can make a big difference in countries where fishing is big business. For example, there are 300,000 fishermen in the Philippines and their territorial waters extend to more than 700,000 square miles – eight times the size of the UK.
The country exports large amounts of fish, including mackerel, sardines and tuna. If traders can prove that their products are caught on a line and governments can demonstrate that their national waters are not overfished, fishermen can charge more for their catch, improving their own lives and improving the local economy in general.
That’s one of the reasons why the Philippine government is a big fan of SRT’s kit – spending millions installing a state-of-the-art system, including 100 long-haul coastal stations and 17 offices full of computers and IT specialists, tracking vessels not just locally, but across the globe. South China Sea and the Western Pacific Ocean.
The Philippine contract was signed earlier this year and Malaysia is also on board. Chief executive Simon Tucker is in talks with several other countries in the region, and more deals are expected in the near future.
Keeping an eye on fishermen makes commercial sense. But maritime surveillance extends far beyond fishing.
Many countries in politically unstable regions, such as the Gulf and parts of Asia, also want greater control over their waters so they can cut back on ugly activities, including maritime kidnapping, piracy, smuggling and the seizure of valuable assets, such as offshore assets. oil platforms.
Bahrain was the first country in the Middle East to sign up to SRT’s systems, but others are following suit and Tucker is also in talks with African countries.
SRT’s revenues plummeted during the pandemic and the group slid into loss. Now the company is recovering. Turnover is expected to rise from £8.2m to almost £57m in the year to March, with a profit of £11m, compared to a loss of £3m last year.
Further profits are forecast for the next fiscal year and beyond.
Midas verdict: As a poor college graduate, Tucker sold chocolate mousse to delicatessens to make ends meet. A grafter by nature, he has been at the helm of SRT since 2008, steering the company through good times and bad. Now SRT has a team of 100 people, including highly skilled British engineers who have developed an unrivaled marine surveillance system. The stock, at 37p, is a buy, especially for the more adventurous investor.
Traded on: GOAL ticker: SRT Contact: srt-marine.com or 01761 409 500
Some links in this article may be affiliate links. If you click on it, we can earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.