Spies of the seas can find profits hunting pirates
AROUND 90 per cent of the world’s trade is carried out at sea. That means a lot of boats – around eight million according to the latest estimates – from giant tankers to tiny tugboats. While large vessels are equipped with sophisticated tracking equipment, the vast majority of smaller ships are unmonitored, especially in emerging markets. Small craft carrying a few tons of cargo, fishing boats, criminal gangs smuggling goods or even people – these vessels go where they want, when they want and nobody really knows their movements.
This maritime free-for-all stands in stark contrast with the policing of our skies, where more than £8 billion a year is spent on air traffic control and regulators know the identity and movement of virtually every plane in action.
Times are beginning to change however. As the world becomes less stable and national security becomes a very real concern, many governments are recognising that they need to take control of their territorial waters. SRT Marine Systems is ideally place to benefit.
Based in Midsomer Norton, a small town on the edge of the Mendip Hills, SRT is a market leader in maritime surveillance, working with countries in the Middle East and Asia in particular so they know who is doing what around their coastlines.
Founded in 1987 and floated on the stock market in 2005, SRT has spent years developing its technology. There have been knocks along the way, including the pandemic, when business dried up and the shares tumbled from 55p to 29p.
Today, however, the outlook is bright. The company is working on contracts valued at more than £70 million, there is a confirmed pipeline worth £600 million and talks are under way that should take that figure considerably higher.
The shares are 37p and are expected to more than double over the next 12 months and beyond.
SRT initially focused on black boxes – known as transceivers – fitted on to ships so that coastguards could monitor where they were and prevent collisions at sea. Today, the transceivers have become much more sophisticated and they are complemented by high-tech onshore systems that reveal a ship’s precise identity and location and show coastal authorities if any kind of illegal or illicit activities are under way.
The systems have multiple uses. In the fishing industry, careful monitoring can make sure that boats are staying within their given quotas and procuring their catch in a sustainable fashion.
This can make a big difference in countries where fishing is big business. There are 300,000 fishermen in the Philippines, for example, and their territorial waters stretch to more than 700,000 square miles – eight times the size of the UK.
The country exports vast quantities of fish, including mackerel, sardines and tuna. If traders can prove their produce is line-caught and governments can show that their national waters are not overfished, fishermen can charge more for their catch, bettering their own lives and enhancing the local economy more broadly.
That is one of the reasons the Philippine government is a big fan of SRT’s kit – spending millions installing a state-of-the-art system, including 100 long-range coastal stations and 17 offices packed with computers and IT specialists, tracking vessels not just locally but across the South China Sea and the Western Pacific.
The Philippine contract was signed earlier this year and Malaysia is also on board. Chief executive Simon Tucker is in talks with several other countries in the region, with more deals expected in the near future.
Keeping a watchful eye on fishermen makes sound commercial sense. But maritime monitoring stretches far beyond the fishing industry.
Many nations in politically volatile regions, such as the Gulf and parts of Asia, are also keen to beef up control of their waters so they can cut down on ugly activities, including kidnapping at sea, piracy, smuggling and the seizure of valuable assets, such as offshore oil rigs.
Bahrain was the first Middle Eastern country to sign up to SRT’s systems, but others are following suit and Tucker is in talks with African nations too.
SRT’s revenues plunged during the pandemic and the group slid into loss.
Now, the company is bouncing back. Sales are expected to soar from £8.2million to nearly £57million in the year to next March, with profits of £11 million, compared with a £3million loss last year.
Continued gains are forecast for the next financial year and beyond.