SRT Marine Systems (SRT:AIM) 58.6p

Gain to date: 95.3%

Bath-based SRT Marine Systems (SRT:AIM) is the established global leader in the rapidly-growing global market for maritime surveillance systems.

Think of maritime awareness in terms of air traffic control and you get some idea of the potential size of the market.

When we originally flagged the firm at 30p in October 2022 we said it had gone under the radar for years but was about to surprise the market with its results and its outlook.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

A month after our tip, the firm posted first-half results showing a three-fold jump in revenues and a pre-tax profit against a loss in the same period a year earlier, sending the shares skyward.

In its pre-close trading update in March, the company said it expected full-year revenue to rise 265% to £30 million driven by a 58% increase in the transceivers business from £7.6 million to £12 million and a 30-fold surge in systems revenue to £18 million.

The update also included two important pieces of news on the firm’s pipeline – an agreement in principle to provide an unnamed Coast Guard customer with a £145 million start-of-the-art, turn-key maritime surveillance system, and a validated sales pipeline of roughly £1.4 billion of orders.

The shares rallied, but there was a degree of scepticism among some retail investors about the value of the pipeline and the timing of future orders, which is admittedly difficult for the company to control as deals are typically signed off at the very highest levels of government.

That scepticism was brushed away last month when the firm announced it had signed off on a £40 million systems contract which is likely to expand dramatically in coming years, and its customer had officially signed on the line for the £145 million contract.

WHAT SHOULD INVESTORS DO NOW?

While a near 100% return in under nine months is not to be sniffed at, we believe there is a great deal more positive news and more upside to come from SRT Marine.

Disclaimer: The author, Ian Conway, owns shares in SRT Marine Systems.

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