SRT Marine Systems – it is beginning to show its mettle, its shares, now 64p are on the rise, my Target Price is 100p before 2025 is over

28.05.2025

Yesterday’s news from SRT Marine Systems (LON:SRT), my favourite maritime domain awareness solutions group, certainly helped to perk its shares up somewhat, closing 10% higher at 64p on the back of some 2,433,928 shares being traded, nearly nine times the average daily volume.

That followed on from the group’s Half Yearly Report, declared in late March, which reported that its revenues were up almost five times, from £5.5m to £26.2m, with an increased profit margin of 46% against 37% previously, the group had turned around from a £4.6m loss to a £2.8m pre-tax profit.

At that time boss Simon Tucker stated that:

"I am delighted with our operational and financial performance during the first half which is rooted in many years of hard work to build up our technologies, products and global market position.

As we expected we have seen solid revenues from both transceivers and systems divisions and look forward to continued growth into H2 and the years ahead."

Yesterday’s News

Early yesterday morning the company reported that with the inter-government project finance loan agreement and other contract condition precedents having been finalised, the €167m National Maritime Security System project with the Indonesian Coast Guard has now commenced.

It noted that the first shipments will commence immediately, while the project will be implemented in multiple phases over a period of approximately 2 years followed by 8 years of ongoing support, maintenance and data services. 

The NMSS project is the delivery of an initial SRT-MDA System, to establish an advanced integrated national maritime surveillance, command, control and communication capability for the customer.

It will enable continuous and persistent real time and near real time surveillance of the entire EEZ and all territorial waters and provide SRT proprietary AI driven intelligence and insight on maritime activities such as illegal fishing, smuggling and maritime safety.

The SRT system also provides a national marine data integration platform which will interconnect all national marine agencies.

The project entails the establishment of multiple command centres, strategic multi-sensor coastal surveillance towers, long range drones and patrol vessel surveillance integration, all of which are fully integrated as an SRT-MDA system as a single maritime C5iSR system.

The system provides a future-proof foundation for further continuous expansion of their national marine surveillance, intelligence and management capability in the years to come.

Upon the announcement, Simon Tucker stated that:

"I am delighted that the €167m NMSS project has now started.

Indonesia is a fast-moving, ambitious, high-growth economy with a massive and complex marine domain, and our customer has the considerable challenge of effectively and efficiently managing it.

This project delivers a sovereign national capability owned and operated by the government of Indonesia that enables them to build up a massive national dataset within a system they own, control and operate that has highly configurable functionalities to provide deep insight.

Furthermore, the flexible AI-powered architecture of the SRT-MDA System enables them to continue to grow and evolve the system in the future alongside their ever-changing operational needs and scale.

We look forward to a long and mutually beneficial sovereign partnership with Indonesia."

The Business

The group is an established leader in the growing global market for maritime domain awareness.

It provides technology-driven solutions for coastal and exclusive economic zone surveillance, fisheries management and monitoring and navigation safety and efficiency.

SRT customers range from government agencies such as Coast Guards, Fishery Authorities and Ports & Waterway authorities to commercial and leisure vessel owners. 

With the Interims the group outlined in its Operational Summary that it had: Five active nation-state customers for the SRT-MDA System; with a total of £320m systems under contract and a pipeline worth £1.2bn of new prospects; that it was looking for an expansion of its systems delivery team to sustain future growth; and that its NEXUS product has been type approved and in ‘final test and smoothing phase’ prior to shipping.

The Equity

There are some 249.9m shares in issue.

The larger holders include Hargreaves Lansdown Asset Management (8.75%), David Brierwood (8.22%), David Newlands (2.13%), Barclays Bank Private Banking (1.87%), Amati Global Investors (1.54%), Toscafund Asset Management (0.52%), HSBC Global Asset Management (0.51%), Jarvis Investment Management (0.27%) and iDealing.com (0.25%).

Broker Comment

Analysts Kimberley Carstens and Michael Hill, at Cavendish Capital Markets, are waiting for the current year to end-June to be completed before publishing their new review of the group and its prospects.

However, they did list out that SRT has five active Systems contracts in delivery, including a support, maintenance and data contract for a completed Fisheries project:

€167m – Indonesian Coast Guard – 10-year (2Y implementation), commenced 27 May 2025;

$213m – Kuwait Coast Guard – 10-year (2Y implementation), commenced November 2024;

$15m – Middle East Coast Guard – Phase 2 of a three phase £40m project, where phase 2 is 12M implementation and a 5-year support contract, commenced January 2025;

$9m – Middle East Coast Guard expansion – 10-year (1Y implementation) expansion on existing System implementation, commenced December 2024; and

$4m – Philippines Fisheries, repeatable 12M support agreement following completion of the £30m project completed September 2023.

The analysts stated that at this inflection point and after years of developing its product and prospects, SRT now boasts multiple concurrent revenue and cash-generative contracts from multiple sovereign customers with decade-long strategic plans.  

They conclude by citing the group expansion opportunities while declaring that SRT has a strong investment case.

“SRT is capitalising upon a Maritime Domain Awareness market in its early stages of sustained growth as changes to national and international maritime regulation require system upgrades towards digital systems, which resemble the development of global air traffic control through the 1980s and 1990s.

SRT’s sophisticated and differentiated platform, derived from 10+ years of R&D and accumulated experience, has established a market-leading position with a £1.2bn validated sales pipeline, enabling it to secure multiple significant contracts from sovereign nations, supported by strong relationships with in-country partners.

As sovereign nations build up civilian maritime surveillance and management capabilities (CG, Fisheries, Sustainability) to create integrated systems, we anticipate these long-term strategic projects will deliver multiple successive contract opportunities involving expansions, support and maintenance and data supply revenue streams.”

My View

You surely do not need me to tell you yet again how keen I am on this little group’s potential and the massive upside prospects for its shares, now at 64p.

Obviously still a risk until the profits start pumping through, but I remain massively confident that this is

.

(Profile 14.09.20 @ 39.5p set a Target Price of 50p*)

(Profile 10.11.23 @ 39.75p set a Target Price of 60p*)

(Profile 25.04.24 @ 22p set a Target Price of 35p*)

(Profile 31.03.25 @ 60p set a Target Price of 100p)