SOFTWARE RADIO TECHNOLOGY PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2009
Software Radio Technology plc ("SRT" or the "Group"), the AIM-quoted developer
and licensor of sophisticated digital wireless technology, announces its
results for the year ended 31 March 2009.
Key events:
Marine:
* 15% increase in revenues
* Gross margin increased slightly to 38%
* Marine product range broadened
* Customer base continues to grow
* Further mandates for AIS announced by authorities in various countries
Professional mobile radio (PMR):
* Ceased trading in 2008 due to delay in customer payments and the economic
climate. Closure costs fully accounted for
* SRT retains ownership of the TETRA IPR and is seeking to generate value
from this asset
The Group is reporting revenues of £2.5 million and a loss for the year of £
12.2 million after incurring exceptional write-offs amounting to £11.0 million
in respect of its discontinued PMR/TETRA business and £0.6 million of
capitalised marine development costs.
SRT Chairman Nick Jolliffe said: "SRT Marine has continued to grow through the
provision of its Automatic Identification System ("AIS") technology and OEM
product solutions to a global customer base. Revenues from continuing
operations increased by 15% to £2.5 million (2008: £2.2 million) with a gross
margin of 38% (2008: 37%).
"During the year we worked with our growing customer base to embed our
solutions into a wide range of AIS products and support their launch into the
market. We also broadened our AIS product range.
"We have further increased both the number of our customers and the
distribution of `SRT inside' products throughout the marine market. Our mission
of providing a high quality, low cost solution coupled with an aggressive
solution-provider strategy, has enabled us to become the primary global
supplier of AIS to the trade."
Software Radio Technology plc 01761 409500
Simon Tucker simon.tucker@softwarerad.com
Hanson Westhouse Limited 020 76016100
Tim Feather tim.feather@hansonwesthouse.com
Matthew Johnson matthew.johnson@hansonwesthouse.com
SOFTWARE RADIO TECHNOLOGY PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2009
The Directors of SRT, the AIM-quoted developer and licensor of advanced
wireless radio communication technology engines and the provision thereof in a
variety of flexible formats, are pleased to provide the preliminary
announcement of the results for the year ended 31 March 2009.
CHAIRMAN'S STATEMENT
At the start of the financial year the Software Radio Technology plc group
comprised two subsidiaries: SRT Marine Technology Limited ("SRT Marine") which
continues to make significant progress and is the main focus of this report and
SRT PMR Technology Limited ("SRT PMR").
The harsh economic environment has affected the Group and its partners and in
December, SRT PMR went into Administration when, following delays in the
project and specifically in payments from customers, it was not possible to
secure the additional finance required to continue to trade. Although SRT has
retained ownership of the TETRA Intellectual Property Rights ("IPR") and is
seeking to generate value from this asset, the Administration of SRT PMR
resulted in a loss of approximately £11 million.
SRT Marine has continued to grow through the provision of its Automatic
Identification System ("AIS") technology and OEM product solutions to a global
customer base. Revenues from continuing operations increased by 15% to £2.5
million (2008: £2.2 million) with a gross margin of 38% (2008: 37%). An
operating loss was incurred from continuing operations of £1.3 million (2008: £
0.6 million) before share based payments. This loss includes development costs
and amortisation of £1.1 million (2008: £0.4 million).
Operational Review
Our primary focus is the expansion of SRT Marine which has established itself
as the global leader in the provision of AIS technology and product solutions.
During the year we worked with our growing customer base to embed our solutions
into a wide range of AIS products and support their launch into the market. We
also broadened our AIS product range. Our patented antenna splitter, which
simplifies the installation of AIS through enabling the sharing of a single
antenna with existing VHF radios, has received an excellent response from the
market with our first production run selling out before it was completed. We
have further increased both the number of our customers and the distribution of
`SRT inside' products throughout the marine market. Our mission of providing a
high quality, low cost solution, coupled with an aggressive solution-provider
strategy, has enabled us to become the primary global supplier of AIS to the
trade.
As a result we saw 15% growth in revenues within SRT Marine, despite mandate
delays and slow leisure markets and achieved a gross margin of 38%.
In non-mandate markets we are working actively with our partners to formulate
marketing campaigns to increase the awareness of AIS. Despite the global credit
crisis, where these have been implemented we have seen a slow but steady
increase in sales.
Interest from authorities in mandating AIS has continued to grow. China,
Turkey, India, the EU and USA have all announced mandates of varying sizes. As
with many government projects, the timing of implementation is difficult to
predict, however as the world's leading provider of AIS solutions, SRT Marine
stands to generate significant revenues when these mandates take effect.
During the next 18 months we will launch two new products, a Class A unit and a
low cost Dual Channel Receiver, which will complete our core AIS solution
offering. The Class A unit is primarily targeted at commercial vessels where
mandates commencing in 2010 have been announced. The receiver-only product is
aimed at providing a first, low cost step on the AIS ladder for non-mandate
markets. We believe that our technology and development expertise will enable
us to create a low cost, high margin product which will generate significant
revenues in the future.
SRT's in-house development team has world class radio development skills and
significant AIS experience. The team has a track record of delivering high
quality, high performance solutions. With disciplined management, we are
confident that we will continue to provide our partners with the AIS products
to address the market.
Board Composition and Governance
The financial year saw several changes to the board. Finance Director, Matthew
Rogers left in December 2008 and Chairman, Richard Moon, resigned in February
2009 with Nick Jolliffe appointed as Chairman. Dr George Kyprios left the board
following the administration of SRT PMR. I would like to record here the
Board's gratitude for their contribution. There are no plans to replace these
directors as the Group is smaller now and the Board maintains a suitable
balance of skills.
Employees
The Group operates in challenging markets and technologies, which in turn,
places large demands on our staff. We are fortunate in having an expert and
dedicated workforce which has enabled us to progress. I would like to thank
them personally and on behalf of the Board for their continued hard work and
support.
Strategy and the future
SRT's primary focus will be its Marine business, which will continue to broaden
its range of AIS technologies and products to meet growing international
demand. The Group has built an excellent international reputation for
delivering solutions of the highest quality and performance at a competitive
price.
AIS market opportunities have clarified and increased during the last year. We
expect that non-mandated markets will continue to grow slowly, whilst mandates
are only likely to have a substantial impact in 2010. However, we believe that
the outlook for 2010 and beyond is positive and that the investment in
developing our AIS product range, and securing sales channels will deliver
significant long term returns.
The coming year will inevitably be challenging given the state of the world
economy, but we expect to see continuing growth in the Marine business and a
meaningful contribution from the residual TETRA business.
Nick Jolliffe
Chairman
CONSOLIDATED INCOME STATEMENT for the year ended 31 MARCH 2009
2009 2008
Re-presented
£ £
Continuing operations
Revenue 2,516,489 2,184,617
Cost of sales (1,565,649) (1,381,407)
Gross profit 950,840 803,210
Development costs (1,147,918) (360,131)
Other administrative costs (1,076,395) (1,077,981)
Total administrative costs (2,224,313) (1,438,112)
Operating loss before share based (1,273,473) (634,902)
payments
(42,130) (344,242)
Share based payments charge
Operating loss after share based payments (1,315,603) (979,144)
Investment revenues 33,441 24,238
Loss before income tax (1,282,162) (954,906)
Income tax credit 147,710 18,012
Loss for the year from continuing (1,134,452) (936,894)
operations
Discontinued operation
(Loss) / Profit for the year from (11,043,473) 737,551
discontinued operation
Loss for the year (including discontinued (12,177,925) (199,343)
operation)
Loss per share (basic and diluted): (1.2)p (1.03)p
Continuing operations
Discontinued operations (11.3)p 0.81p
Continuing and discontinued operations (12.5)p (0.22)p
CONSOLIDATED BALANCE SHEET as at 31 MARCH 2009
2009 2008
£ £
Assets
Non-current assets
Intangible assets 908,365 6,961,529
Investments - 351,586
Property, plant and equipment 82,090 435,898
Total non-current assets 990,455 7,749,013
Current assets
Inventories 897,981 413,019
Trade and other receivables 651,854 5,683,915
Cash and cash equivalents 535,692 3,505,484
Total current assets 2,085,527 9,602,418
Liabilities (399,300) (2,538,954)
Current liabilities
Trade and other payables
Net current assets 1,686,227 7,063,464
Total assets less current liabilities 2,676,682 14,812,477
Net assets 2,676,682 14,812,477
Shareholders' equity
Share capital 97,818 97,818
Share premium account 15,387,084 15,387,084
Retained earnings (18,298,816) (6,163,021)
Other reserves 5,490,596 5,490,596
Total shareholders' equity 2,676,682 14,812,477
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 MARCH 2009
2009 2008
Re-presented
Continuing operations £ £
Cash used in operating activities (896,609) (1,191,878)
Interest received 33,441 24,238
Corporation tax received 147,710 18,012
Net cash used in operating activities (715,458) (1,149,628)
Investing activities
Purchase of intangible fixed assets (213,496) (350,388)
Purchase of property, plant and (59,463) (47,993)
equipment
Net cash used in investing activities (272,959) (398,381)
Cash outflow before financing (988,417) (1,548,009)
Financing activities
Net proceeds from the issue of - 7,357,373
ordinary share capital
Net cash from financing - 7,357,373
Net (decrease)/increase in cash and (988,417) 5,809,364
cash equivalents in the year from
continuing operations
Discontinued operation
Cash flows from operating activities (336,331) (523,351)
Cash used in investing activities (1,645,044) (2,097,534)
Net decrease in cash from discontinued (1,981,375) (2,620,885)
operation
Net (decrease)/increase in cash and (2,969,792) 3,188,479
cash equivalents
Net cash and cash equivalents at 3,505,484 317,005
beginning of year
Net cash and cash equivalents at end 535,692 3,505,484
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 29 May 2009.
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 Company within the
meaning of section 240 of the Companies Act.
The auditors have reported on the results for the year ended 31 March 2009 and
have provided an unqualified audit report.
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 1985 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 2008. There have been no changes in accounting policies during the year
although certain comparatives have been re-presented to reflect the effect of
the discontinued operation. 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 £1,134,452 (2008 - loss £936,894) and losses for
continuing and discontinued operations of £12,177,925 (2008 - loss £199,343).
The weighted average number of shares in issue during the year were 97,817,107
(2008 - 90,774,729).
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 5 June 2009.