Software Radio meets reduced expectations

Software Radio Technology (SRT), the developer and provider of maritime identification and tracking technologies and products, topped heavily reduced expectations with its full year results.

Having issued a profit warning in March in which it said full year revenue would be around £6m and profit before tax about £0.1m, the group announced a decline in revenue to £6.2m from £9.2m the year before and a slide in profit before tax to £0.17m from £1.94m a year earlier.

Earnings per share for the year ended March 31st tumbled to 0.2p from 2.2p the preceding year.

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Prior to the March profit warning, market expectations had been for revenue of £9.46m, profit before tax of £1.89m and earnings per share of 1.55p.

As reported to the market in March, the fall in revenue and profits was primarily caused by a shifting in expected demand derived from existing European Union mandates from the last quarter of financial year 2011/12 to the second half of 2012/13, and a slow down in sales from some customers as they make the transition to SRT's new range of technologies and products.

In other words, the message from the board was to not panic, as they regard the setback as a timing issue and not a market or sales trend.

"Whilst revenues remain lumpy, we are now starting to see

consistent growth in our core business and some of the many large projects coming to fruition, such as our recently announced $3.7m order for Identifiers," said Simon Tucker, Chief Executive Officer of SRT.

One cause for celebration was the gross profit margin, which rose above the 50% level to 51%, achieving a target set out in 2009. The group said further margin improvement is anticipated.

At the end of March the group had cash of £0.6m and no debt. In addition, it has £3.5m of stock, waiting to be turned into cash as those delayed orders feed through.

The company has not recommended payment of a dividend.

JH