H1 2025 results: 95% revenue jump and momentum across sovereign MDA programs
SRT Marine Systems has posted a punchy first half, with revenue up 95% to £51.1 million for the six months to 31 December 2025. Profit before tax rose 48% to £3.1 million, and gross cash climbed 86% to £41.6 million. The Board says revenues should continue to grow in H2 and remains confident in meeting current market expectations.
For context, SRT supplies Maritime Domain Awareness (MDA) systems to sovereign agencies like coast guards and fisheries authorities, alongside navigation safety devices. The systems side is now the clear engine of growth, supported by a steady transceivers business.
£350m active order book and a signed £195m contract awaiting activation
Execution visibility looks solid. SRT has approximately £350 million of active contracts across five sovereign customers. Of this, £123 million has already been recognised as revenue, leaving £227 million to deliver. The company also signed a new £195 million national surveillance system contract with a sixth sovereign shortly after the period end. Important caveat: activation awaits a UK Export Finance (UKEF) supported project finance package and is not guaranteed.
Beyond that, SRT retains a sizeable validated pipeline of roughly £1.8 billion in prospective system contracts from new and existing customers. A £15.3 million follow-on contract with an existing sovereign customer is already active and included in the current £350 million order book.
Cash flow quality: strong collections, milestone billing and restricted cash
Operating cash flow was the standout at £35.3 million, driven by the conversion of receivables and completion of project milestones. Gross cash at the half year was £41.6 million, of which £27.4 million is restricted cash held against project obligations. Management expects to deploy some cash in H2 for project purchases to hit the next set of milestones, but still expects to be significantly cash generative for the full year.
In short, cash generation is being powered by execution on large sovereign programs. The restricted cash balance is normal for long-term infrastructure-style contracts but worth tracking as programs progress.
Margins and costs: mix effect weighs on gross margin, scale-up showing through
Group gross margin was 27%, lower than the prior period due to the type-mix of system deliverables completed. Within that, the systems business delivered 26% gross margin, while the transceivers business achieved 42%. Administrative expenses rose to £10.2 million from £8.5 million as SRT built delivery and sales capacity to manage multiple projects at scale. The company says it has now reached critical mass and expects operating and staffing cost growth to moderate.
Finance costs fell versus the prior period’s total due to the absence of last year’s non-cash exceptional charge related to warrants. Reported finance costs for the half were £0.8 million, with finance income of £0.2 million.
Segment view: systems driving growth; transceivers provide resilience; NEXUS launched
Revenue mix underlines the strategy. Systems generated £46.9 million in the half, with transceivers contributing £4.2 million. The transceivers line remains a consistently profitable base with an established distribution network. Shortly after period end, SRT began shipping NEXUS, its new VHF/AIS marine communications product. AIS is Automatic Identification System – a vessel-tracking standard that underpins maritime safety and situational awareness.
Operational milestones: USSV now working 24/7 inside an SRT-MDA system
SRT’s first unmanned surface surveillance vessel (USSV) programme became fully operational in Kuwait, undertaking round-the-clock missions within an SRT-MDA system. This is a useful proof point of the company’s ability to integrate unmanned platforms into national-scale maritime surveillance architectures. Management expects to expand USV and UAV platforms into other sovereign projects over time.
Balance sheet and funding: more loan notes, higher net assets
Net assets increased to £29.9 million from £24.0 million a year ago. Borrowings at 31 December 2025 were £16.2 million in total – £2.2 million current and £14.0 million long term. Loan notes arranged via LGB Capital Markets carry interest rates of 10% and are secured by a floating charge. During the period, £8.6 million of loan notes matured and were refinanced for two more years; a £0.5 million equipment loan at 4% was also drawn for a systems project.
Share count edged up to 251,590,656 after option exercises. Basic EPS was 1.16p (H1 2024: 0.93p); diluted EPS was 1.10p (H1 2024: 0.92p) based on 265,657,814 diluted shares.
My take: why this matters for investors
The numbers show a business scaling into a sizeable global opportunity. Revenue growth, order book conversion and cash inflows from milestone execution are all moving in the right direction. The USSV deployment and the NEXUS launch broaden the product and capability footprint, which should help future bids and upsells within what SRT calls its Sovereign Partnerships.
On the flip side, margin is sensitive to project mix, and the business still runs with meaningful loan-note funding at 10%. Restricted cash and chunky payables reflect the working-capital intensity of large sovereign contracts – normal, but worth monitoring. Most importantly, the £195 million signed contract will only kick in once the UKEF-backed financing is completed, which is not guaranteed.
What to watch in H2 2026
- Activation of the £195 million contract with the sixth sovereign – financing outcome and timeline.
- Conversion of the £1.8 billion validated pipeline into new signed contracts.
- Cash dynamics as the company funds next delivery phases while targeting continued positive cash generation.
- Gross margin trends as project mix shifts and delivery scales.
- Further integration of unmanned platforms and the market adoption of NEXUS across the distributor network.
Key numbers at a glance
| Metric | H1 2025 | H1 2024 |
|---|---|---|
| Revenue | £51.1m | £26.2m |
| Profit before tax | £3.1m | £2.1m |
| Gross cash at period end | £41.6m | £22.4m |
| Operating cash flow | £35.3m | £(5.5)m |
| Basic EPS | 1.16p | 0.93p |
| Active systems order book | ~£350m | Not disclosed |
| Validated pipeline | ~£1.8bn | Not disclosed |
Bottom line
This is a confident update from a company executing on large, complex national security-grade projects. Revenue growth and cash generation are strong, the order book is substantial, and the newly signed £195 million contract could add another leg of growth if financing completes. The risks are clear – project mix, financing activation and working-capital intensity – but the trajectory through H2 looks constructive.
In short: SRT has momentum, growing credibility with sovereign customers and a lot to go at. Keep an eye on that UKEF milestone – it is the next big catalyst.
