Final Results For The Year Ended 31 March 2010
SOFTWARE RADIO TECHNOLOGY PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2010
Software Radio Technology plc ("SRT" or the "Group"), the AIM-quoted developer
and provider of maritime identification and tracking technologies and products,
announces its results for the year ended 31 March 2010.
Key events:
* 41% increase in revenue
* 78% increase in cash
* Gross profit margin increased to 38.7%
* Losses reduced by 81%
* SRT is debt free
* $4 million forward order book as of 1st April 2010
* New products developed and launched
* Multiple new mandates announced and activated affecting up to 500,000
vessels over next 3 years.
The Group is reporting a 41% increase in revenues to £3.56 million and an 81%
reduction in losses for the year to £221,000, with a 78% increase in cash to £952,000.
SRT Chairman Simon Rogers said: "I am delighted to report that 2009/10 has been
a transformational year for SRT and that our heavy investment in AIS
technologies and the development of a global customer base are now starting to
be reflected in financial performance. With a $4 million order book, new higher
value and margin products and mandates affecting many thousands of vessels
underway, the outlook for 2010/11 and beyond is very positive.
"In 2009/10 we saw our business grow by 41%, compared to 15% during 2008/09.
This acceleration in growth has been caused by the activation of long planned
mandates, such as in Singapore, Turkey and China during 2009 and the subsequent
commencement of orders. Each of these mandates is over a period of years and
therefore we have only just started to see their effect which will continue to
grow in the future".
"We enter the new financial year with a strong order book and improving
visibility on future demand for our products. The combination of our proven
market leading technology, our customers' sales channels and strongly growing
global demand mean that we look forward to continuing strong growth in the
coming year and beyond."
Software Radio Technology plc 01761 409500
Simon Tucker simon.tucker@softwarerad.com
Westhouse Securities Limited 020 7601 6100
Tim Feather
Matthew Johnson
CHAIRMAN'S STATEMENT
I am delighted to report that 2009/10 has been a transformational year for SRT
and that our heavy investment in AIS technologies and the development of a
global customer base are now starting to be reflected in financial performance.
The past financial year has again seen us increase our growth rate, with a 41%
year on year increase in revenue to £3.56 million (2009: £2.52 million), an
increase in gross profit margin to 38.7%, an 81% reduction in losses to £221,000
(2009: £1,134,000)and a 78% increase in cash to £952,000 (2009: £536,000) with no debt.
In 2009/10 we saw our business grow by 41%, compared to 15% during 2008/09.
This acceleration in growth has been caused by the activation of long planned
mandates, such as in Singapore, Turkey and China during 2009 and the subsequent
commencement of orders. Each of these mandates is over a period of years and
therefore we have only just started to see their effect which will continue to
grow in the future.
During 2009, SRT broadened its product range which now includes high value,
high margin products such as the new AIS Class A Transceiver and as at 1st
April 2010, our forward order book was worth $4 million. With mandates which
affect hundreds of thousands of vessels now underway and gaining pace, an
established global customer base, and proven world class products your Board is
looking forward to the year ahead with optimism.
Operational Review
The focus of the business is to be the world's leading provider of vessel
identification and tracking technologies with a primary focus on AIS
technology.
During the year we have managed the business carefully to ensure that overheads
and costs are strictly controlled whilst expanding our technology and product
portfolio to ensure that we meet the expected expanding market demand for all
types of AIS products, now and in the future. I am pleased to report that this
has been successfully achieved. On a cash basis our overheads were the same as
in 2009, yet we have developed and launched two new market leading products
which we are confident will drive significant new revenues for SRT in the
current financial year.
Our new Dual Channel AIS Receiver is a miniature device which enables AIS
receiver capability to be instantly integrated into existing marine devices at
low cost. It enables our customers to offer an exceptionally low cost product
to those mariners who may wish to start experimenting with AIS before moving
voluntarily on to more expensive and complex transmit-type devices.
The main product development focus has been on our Class A Transceiver. Class
A, which is the most complex of all the AIS devices, offers an extensive array
of sophisticated features and functions, all of which must be formally tested
and approved against the international AIS standard by accredited independent
test houses. This was successfully completed in April 2010 and started shipping
to customers in May 2010 against orders already placed during the last quarter
of the 2009/10 financial year.
As the AIS market grows we remain constantly vigilant of potential competition.
As such during the year we have also instigated new core technology development
programs which will support the launch of additional new products during the
course of the coming year. These will make use of a new and innovative AIS
platform which we have developed internally and will enable a considerable size
and cost reduction across most of our product range and raise the barrier to
entry for any potential competition. We believe that the continued investment
in our core technologies is essential for SRT to remain the market leader and
maximise all market opportunities.
In parallel with the development and launch of our new products, we have
continued to improve the quality of our sales channels and customer
relationships to reflect our enhanced product portfolio and the growth in the
market. During 2009 we rationalised our customer base and negotiated new longer
term contracts for the benefit of both customers and SRT. The most notable
aspect of these contracts has been a change in the ordering and payment process
with the effect that the burden of production forecasting and stock holding is
shared more equally between SRT and the customer, rather than being wholly
borne by SRT. This initiative should enabled us to improve the deployment of
our capital and provide our customers with reduced lead times and improved
service.
Our products and solutions are now marketed under 25 different brands around
the world through an extensive network of sales channels. Our customers provide
AIS products to markets from Singapore, China, South Korea, Turkey, USA and
Europe. Often we are unaware of the exact driver for a particular order, but
increasingly as large mandates are announced and come into force we are able to
have clarity. For example in January 2010, the Turkish AIS Class B mandate took
effect and we are now receiving regular orders from our longstanding local
partners. In November 2009 one of our customers won a government tender to
supply approximately 1,000 Class B transceivers in Singapore. This is in
addition to the various other mandates and tenders which continue to roll out.
As we reported last year, our investment in technology and supporting customers
to use our solutions placed us in an ideal position to benefit from the
commencement of mandates as they come into force. This year has seen the start
of the effect of these mandates coming into play, with many more yet to come.
Board Composition and Governance
The financial year saw several changes to the board. Nick Jolliffe resigned as
Chairman in December to pursue personal interests and Simon Rogers was
appointed as Chairman of the Board. In October, Richard Hurd joined the Board
as Chief Financial Officer.
Employees
SRT's defining advantage in the competitive world of complex radio
communications stems from its people without which we would be unable to
develop the technology our customers rely upon and now expect from SRT. As a
business seeking to dominate a fast moving global market, we place large
demands and expectations on our staff. We are fortunate in having an expert and
dedicated team at SRT who, at all levels in the organisation, take their
responsibilities seriously and have continued to deliver against challenging
specifications and deadlines. We recognise the importance of attracting,
motivating and retaining key staff and accordingly during the year granted
share options to key employees. I would like to thank them personally on behalf
of the Board and shareholders for their continuing hard work and support.
Strategy and the Future
The global demand for AIS products continues to accelerate. Mandates affecting
up to 500,000 vessels in Korea, India, Turkey, US and the EU are now underway
or pending. SRT has a portfolio of proven AIS products which are embedded in an
extensive network of established customers, each with its own sales networks.
As such we are in an excellent position to benefit from growing demand for AIS
devices and will continue to work closely with our selected customers to
maximise their success.
We will continue to invest in new technologies and products to take advantage
of opportunities and consolidate our position in the market, whilst carefully
managing our overheads. We are also conscious that we are faced with the
challenges of large markets and potentially significant growth. We will
therefore continue to manage our business and work with our customers to ensure
that we trade within our means.
Our new products, in particular our Class A, mean that we expect to see our
ARPU (average revenue per unit) and gross margins to increase during the coming
financial year whilst maintaining cash overheads at a similar level to last
year.
We enter the new financial year with a strong order book and improving
visibility on future demand for our products. The combination of our proven
market leading technology, our customers' sales channels and strongly growing
global demand mean that we look forward to continuing strong growth in the
coming year and beyond.
Simon Rogers
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 MARCH 2010
2010 2009
£ £
Continuing operations
Revenue 3,558,124 2,516,489
Cost of sales (2,180,119) (1,565,649)
Gross profit 1,378,005 950,840
Administrative costs (1,876,383) (2,224,313)
Other operating income 132,129 -
Operating loss before share based payments (366,249) (1,273,473)
Share based payments charge (22,004) (42,130)
Operating loss after share based payments (388,253) (1,315,603)
Investment revenues 2,067 33,441
Loss before income tax (386,186) (1,282,162)
Income tax credit 165,662 147,710
Loss for the year from continuing (220,524) (1,134,452)
operations
Discontinued operation
Loss for the year from discontinued - (11,043,473)
operation
Loss for the year (including discontinued (220,524) (12,177,925)
operation)
Other comprehensive income - -
Total comprehensive loss for the period (220,524) (12,177,925)
Loss per share (basic and diluted): (0.2)p (1.2)p
Continuing operations
Discontinued operations - (11.3)p
Continuing and discontinued operations (0.2)p (12.5)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 MARCH 2010
2010 2009
£ £
Assets
Non-current assets
Intangible assets 1,570,429 908,365
Property, plant and equipment 123,759 82,090
Total non-current assets 1,694,188 990,455
Current assets
Inventories 894,392 897,981
Trade and other receivables 318,762 651,854
Cash and cash equivalents 952,485 535,692
Total current assets 2,165,639 2,085,527
Liabilities (1,381,665) (399,300)
Current liabilities
Trade and other payables
Net current assets 783,974 1,686,227
Total assets less current liabilities 2,478,162 2,676,682
Net assets 2,478,162 2,676,682
Shareholders' equity
Share capital 97,818 97,818
Share premium account 15,387,084 15,387,084
Retained earnings (18,497,336) (18,298,816)
Other reserves 5,490,596 5,490,596
Total shareholders' equity 2,478,162 2,676,682
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2010
2010 2009
Continuing operations £ £
Cash generated from/ (used in) 1,391,790 (896,609)
operating activities
Corporation tax received 165,662 147,710
Net cash generated from / (used) in 1,557,452 (748,899)
operating activities
Investing activities
Purchase of intangible fixed assets (1,073,269) (213,496)
Purchase of property, plant and (101,087) (59,463)
equipment
31,630 -
Proceeds from the sale of property,
plant and equipment 2,067 33,441
Interest received
Net cash used in investing activities (1,140,659) (239,518)
Cash inflow/ (outflow) before 416,793 (988,417)
financing
Financing activities - -
Net increase/ (decrease) in cash and 416,793 (988,417)
cash equivalents in the year from
continuing operations
Discontinued operation
Cash flows from operating activities - (336,331)
Cash used in investing activities - (1,645,044)
Net decrease in cash from discontinued - (1,981,375)
operation
Net increase/ (decrease) in cash and 416,793 (2,969,792)
cash equivalents
Net cash and cash equivalents at 535,692 3,505,484
beginning of year
Net cash and cash equivalents at end 952,485 535,692
of year
Notes
1. Status of financial information
Software Radio Technology plc ("the company") is a public limited company
incorporated in England and Wales and whose Ordinary shares of £0.1p each are
traded on the Alternative Investment Market of the London Stock Exchange. The
Company's registered office is Wireless House, Westfield Industrial Estate,
Midsomer Norton, Bath, BA3 4BS, England.
The Board of Directors approved this preliminary announcement on 4 June 2010.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with International Financial Reporting Standards
("IFRS") as endorsed by the European Union, this announcement does not itself
contain sufficient information to comply with all the disclosure requirements
of IFRS and does not constitute statutory accounts of the Group for the years
ended 31 March 2010 or 31 March 2009.
The financial information has been extracted from the statutory accounts of the
Company for the years ended 31 March 2010 and 31 March 2009. The auditors
reported on those accounts; their reports were unqualified and did not contain
a statement under either Section 498 (2) or Section 498 (3) of the Companies
Act 2006 and did not include references to any matters to which the auditor
drew attention by way of emphasis.
The statutory accounts for the year ended 31 March 2009 have been delivered to
the Registrar of Companies, whereas those for the year ended 31 March 2010 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
2. Basis of preparation
This financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS") as adopted by the European Union and
International Financial Reporting Interpretations Committee ("IFRIC")
recommendations and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. For the purposes of the preparation of the
consolidated financial information, the Group has applied all standards and
interpretations that are effective for accounting periods beginning on or after
1 April 2009. There have been no changes in accounting policies during the
year. The financial statements have been prepared under the historical cost
convention unless otherwise stated.
3. Dividends
The Board is not recommending the payment of a final dividend.
4. Loss per Ordinary Share
The calculations of basic loss per ordinary share are based on losses for
continuing operations of £220,524 (2009 - loss £1,134,452) and losses for
continuing and discontinued operations of £220,524 (2008 - loss £12,177,925).
The weighted average number of shares in issue during the year was 97,817,107
(2009 - 97,817,107).
5. Income Tax Credit
The income tax credit received was in respect of research and development tax
credit which is accounted for on a cash basis.
6. Annual Report
The Annual Report will be available from the Company's website,
www.softwarerad.com from 7 June 2010.
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