SRT Marine Systems swings to full-year loss on contract cancellation

SRT Marine Systems said on Monday that it swung to a full-year loss as revenue slumped following the cancellation of a key contract.

In the year to the end of March, the company swung to a loss before tax and exceptional items of £5.8m from a profit of £1.2m the year before, as it recorded a one-off exceptional impairment charge of £1.5m in relation to a systems contract with a European systems integrator, which is a prime contractor to a SE Asian coast guard.

"Although we received written re-assurances from the customer, including a letter from the end customer explaining that the delay had arisen due to a lack of budget availability and would re-commence in the future, since in this instance, SRT was not the prime contractor and thus not engaged directly with the end customer, we decided that given this lack of visibility it was prudent for us to write down the full value of the project."

Meanwhile, revenue in the year tumbled to £5.3m from £11m.

Chief executive officer Simon Tucker said: "I am very disappointed with the shortfall in our revenues for the year, which was caused by an unexpected contract change. This does not reflect the excellent operational progress the business has made with regards to product development and sales opportunities.

"I recognise that we are measured on the profits that SRT delivers and to that end expect SRT to measure up to expectations in the near future."

At 1025 BST, the shares were down 3.5% to 25.33p.