SRT Marine Systems plc (SRT) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to SRT webcast. I'm Simon Tucker, CEO. It's all changed this year because of all this COVID business, unfortunately. So we can't do our usual jamboree here, which is -- I think it's a great shame because it's a really good opportunity for you guys to not talk to me, but to talk to all our management team, kick tires, ask a lot of questions and things. But as soon as all of this calms down, we will do a shareholder open day with the cakes and possibly some pots of jam, and invite you down here, but certainly next year. So apologies that it's all virtual. So the first thing to say is that we have had our AGM, the directors, all the resolutions were passed. So thank you for that. So it now falls to me to provide you with an update. I've got a computer here on my right, where you can type in your questions anonymously, and I will answer them at the end of this presentation. So please do ask any questions, tricky ones, pointed ones, whatever else you like, I will answer all of them without making anybody inside or risking our commercial relationships with some of our more sensitive customers. You may see people walking past and stuff. We're in our offices. So we do have people in our offices with COVID working. So don't pay any attention to that. So let's make a start. The presentation, as always, assumes that some people are new arrivals. And so -- some of this will be old hat to people, but our apologies for that. I do want to make sure that everybody that's watching understands our business. So you should be able to see this presentation on your screens. So what do we do? We provide maritime domain awareness. Situational awareness is another word for that. Whether you're sitting on the boat, you want to know what's around you, or you're sitting in a control room, you want to know what the boats are doing and who is the bad guy. So our entire focus is focused around that one thing, which is maritime domain awareness. And really, we are digitizing the marine domain. This has happened years ago in air traffic control. This is now happening in the maritime domain, which is creating these new trends. And that is SRT's business. What are driving these things? These are fundamental drivers. I'm often asked, has COVID changed this? These drivers are longstanding and are here to stay and have been around for years, really. The first one is security. Countries have realized that their longest border is typically their coastline for most countries, obviously, if you're not landlocked. Environment, increasingly, we're hearing and understanding the importance of the oceans and therefore, you need to protect that from overfishing, et cetera. And obviously, safety, such a rescue and things. And those 3 key market drivers that are driving the demand for maritime domain awareness systems. You can't have maritime security if you don't know what's going on. And you can't, from the thousands of vessels going around the place, identify who is the bad guy. You can't protect your maritime environment if you can't track and monitor and control vessels and their activities. And you certainly can't go and rescue somebody if you don't know where they are, pretty basic stuff, but those are the fundamental demand drivers. Nobody is buying these systems and spending the amount of money in the hassle and everything else because they think it's cool and -- it's not a consumer product, these are serious drivers. And we are selling into that market. So this slide here, some of you might have seen previously. Really, is there just to sort of show that these things are being implemented, not at the speed that perhaps we would all like at times. It must seem from some of you guys that it takes forever. But these are serious demand drivers, and there is proactive implementation of the MDA systems. And the reasons are for the drivers that I just explained previously. So there is a lot of activity in this area. It's a growing pace of activity as well with those drivers. So why suddenly is this thing happening? The main thing has been new technologies. And that slide there really just shows you the pattern of vessels. And actually, it shows our -- one of the regional control centers in the Philippines. And so there's a whole new generation of maritime domain awareness systems driven by the technology which gives this improved security, improve our environmental control, improve safety, and that is why then people are reaching out to buy and look to specify our systems. So what is our position in this market? I think this is quite an interesting slide because I think it's easy to forget the amount of stuff that we've done. SRT, we've manufactured and shipped over 300,000 transponders, representing the vast majority of AIS transponders that are deployed in the world today. We have done projects around the world from Mexico to Oman, to Kuwait, Saudi Arabia, Philippines, Somalia, Ecuador, Russia, South Africa, Ghana, all number of different places. So SRT because we were so early in the game with AIS, which was a new identification technology, and we took some pretty big risks in going into the systems business before people started to think about integrated maritime domain awareness on a big scale, we have got ourselves into a leading position in the market with references around the world. If you're going to talk to any coastguard, if you're going to talk to any fisheries, SRT is known and is seen as a trusted supplier in the market. So we feel that we are now in a, and have been for some years, in a very favorable market position, which is I think is reflected by some of the engagements that we have going on. So what about our marketing products? Of course, there's SRT Marine Systems plc, and we divide our business into 2: We have our transceivers business. And as it says on the tin or on the screen, we sell transceivers. Those transceivers are sold either to OEM manufacturers, so marine electronics companies that want to have their own AIS product range, we will then sell them their product and they can then have their own AIS product range. We also have em-trak, which is our own brand. And there, we have dealers and direct sales. We now have nearly 1,000 dealers with em-trak, and that's growing very nicely. We also sell aids to navigation, which are a new form of -- relatively new form of transceivers, which go on to buoys, and that's digitizing navigation safety. So our transceivers business just sell standalone transponders. It doesn't sell it with software and things. Our systems business is where we provide an integrated solution. And from the customer standpoint, what they're looking at is a operator console with some software on it, which is like some of the previous screens that I've just shown you, has the location of the vessels, dots on the map, which is all very exciting. Actually, a whole range of functionality that sits behind that. So e-logs, analytics, command and control functionality, alert management, networking of multiple operators within a command and control system environment so that if a bad guy is spotted, they can then action the correct Coast Guard vessel response within the command and control chain. And that's what our systems business does. So in the year -- and just some figures here. If we look at our transceivers business, we have about 1,000 dealers, grows steadily now. I mean we went through a sort of spurt a few years ago, and now we grow steadily. Our focus is to get those 1,000, which give us a global coverage, working for us. In the year just past, we did about GBP 8 million worth of revenue in that business, which is a 24% year-on-year growth. And I think those of you who've read our interim results recently will know that we have maintained that level of business in the first half, much to my surprise, we had expected that to fall off a cliff with COVID-19 and nobody going out to their boats and what have you. And actually, that has not been the case, it has continued. So we're very happy with that. And there's quite a few growth opportunities, which I'll talk about. We've defended our margin, 42%. That is a combination of pricing power because of the quality of the product, but also the quality of the engineering. These are complex products, hundreds of components in each one. These are very integrated designs, and that is a reflection of the talent of our hardware and software team in our transceivers division within SRT. On our systems side, we have about GBP 32 million of existing contracts underway. Obviously, the largest one there is the Philippine fisheries one. We have GBP 69 million of delayed contracts. These are Middle Eastern ones specifically that we expected to sign in February and March, which irritatingly were delayed because of COVID-19, and we're now reengaged, and I'll talk to you about that in a little bit further down in the presentation. And then we have the rest of our VSP, over GBP 500 million worth, of which about GBP 200 million are what we considered relatively -- I'm always cautious to say near term because that's interpreted differently by different people, but are certainly not a million miles away. And then you've got some in our VSP where they've only just qualified to be in our validated sales pipeline, i.e., they've said the budget is there, the political decisions have been made, regulation exists and stuff, but you're still a couple of years away from them, actually going through the planning and consultancy and specification phase and then getting to the point of contract. So in the year that we've just finished -- about GBP 8 million, as I said, came from our transceivers business, GBP 10 million from our systems business. Our overall gross profit margin was 23%. And I think it's -- I need to explain that. We have a very simple revenue recognition process in our systems business. Each project is divided into milestones. And for each milestone, it depends on the individual mixture of that. So a milestone might be software. Well, obviously, if we're billing somebody $100 for the software, our cost of that software is nothing. So it's a very high margin. So when you build that particular milestone, it has a very high -- you might even have a 99% profit margin. But there are other then milestones that are then delivered, which might be third-party hardware. So perhaps a radio transponder, which we haven't made, but is being made by a third-party supplier. And we might only add 10% margin for that particular individual product because that has a market price for it. And so in the last period -- last year, it was all hardware delivery on our systems business. And as a result of that, the margin was skewed, not indicative of the overall margin of an overall project. Overall, they are between 40% and 60% gross profit margin. So it's just simply a timing of the milestones. We don't do percentages complete. We don't massage the times and stuff. It's very simple with the customer. We have either delivered the milestone or we haven't. If we have, they start -- they inspect it, they sign off on it, and then the revenue is recognized. And that's it. At the year-end, we had about GBP 1 million worth of cash. But since then, we've been paid a lot of money from our systems business. We also did our COVID resilience plan, and we raised a combination of equity and debt, and that has placed us in a very good cash position. And as you know, at the end of the first half, we had GBP 5 million worth of -- just over GBP 5 million worth of cash in the bank. And I'll talk about our COVID resilience plan, which was very conservative and so has placed us in a good position. So my feeling is last year was disappointing because of the delays in the contracts. There's nothing really we could do about that. They haven't gone away. And I suppose the message is a crappy last year and better this year. So we have a little table here, which just shows you the -- we've sort of bumbled along in the last 3 or 4 years waiting for these contracts to come through. And you can see how a single contract can vary quickly because of the way the business is, the business model is structured, but the scaling can change and how the profit falls very quickly to the bottom line, which is what we expect this year with some new contracts that are coming. Working capital, I've talked to you about. I often get questions about a fear of, well, okay, it was great, these new contracts coming, but are they going to be working capital consumptive? No. All our system contracts are working capital positive. What I think the point of this slide here is that because of the delays of COVID, we still are developing our products, we still are shipping stuff with the transceivers. Nobody is laid off at SRT. We're all busy, and we have plenty of cash to weather that delay. When those contracts, new contracts are signed, it is -- they don't require an input of working capital because typically, the first delivery in the systems contracts are things like the data centers and things which are very software-heavy, and therefore, as I explained earlier, have a much higher margin. And therefore, the cash they're very cash generative in fact. So on our transceivers business, what's been going on this year? It's very simple. We just pedal the same thing. That sounds a bit boring, but we are -- what we're peddling is the best AIS transceivers. We did launch our em-trak B900 series. This is the product here. It uses our existing technology inside. So it's just -- is I suppose it's a new -- just a new box. It's got some innovations in it. It's got a new bracket system, which makes installing these things very easy. When you think about boats, it's -- and you're trying to sort of put this into a little area, there's a little bracket on the back. You just literally can stick that on to the side of the fiberglass and then you can literally just clip the transponder on to it, really neat. And really, that was copying things like light switches and stuff like that or your alarm boxes that go into the walls and stuff. And that's been really popular. The technological innovation within this is a common theme now with SRT is that we're going to provide connectivity to your mobile devices. Our vision is that mobile devices, i.e., mobile phones are extremely powerful. And what you want is that is where you have all your data, that's where everything is displayed. Navigation software, all that sort of stuff is now on to mobile devices. And so the B900 has Wi-Fi and Bluetooth. And what that enables is data to be streamed from here to multiple phones. So in fact, 8 mobile phones can connect simultaneously and they can all see the data on their mobile phones on their whatever navigation app they've got or their tablet or their computer. So you have one B900 on your Sunseeker and everybody can connect to it, all your navigation stations and your iPad and all the rest of it, and it's all about that intelligent plug-and-play connectivity. Sounds very simple, quite complicated to achieve. So this was launched, and we've had a really good response. It's still got the great performance stuff that is expected of SRT and its products. The other thing we did through the year was upgrade our website. We haven't touched that. I think the first em-trak website was, I think, we spent GBP 15 with GoDaddy. So now we have a very good website, and that's pushing direct sales. We're also helping people relate to the type of boat that they have. So if you have a rig, we have specific engineering solutions so they can see where do you put it? Where do you put the B900, how do you connect it to your VHF radio, how do you connect it to your chart plotter, how do you connect it to your battery system. If you've got a jet ski, for example. So in the states, a lot of people are using jet skis to go out fishing. They're [indiscernible] stuff. They want to have AIS because they can get run down by a ship or something. So -- and what we're seeing is a continuing of the trend in the transceivers market in the leisure market, increasingly smaller vessels are being fitted with AIS. In the commercial market, it's regulation. We're now seeing in the EU in the waterways. We're already coming up to the change cycle, so they're now starting to buy another round of AIS devices. There have been mandates in Greece, Mauritius, there's one coming up in Indonesia. So it's regulation that drives that, and it's pretty much standard fit. We've always said that ultimately, AIS and radar and vessels will match each other. And it's a sort of 10-year trend line that we're probably 3 years into that. And to give you an idea, sort of 30% of the world's 25-odd million vessels have a radar on there. So that would indicate a total market size of somewhere in the region of 6 million, 7 million boats for AIS. And today, probably 400,000 boats have an AIS transponder. So we're at the beginning of that curve. So let's talk about our systems business, something that we started from scratch a few years ago. And it's important, actually, that we started it from scratch because we architected this to be an integrated network system. We did not evolve it from a single port system. And with all the problems that, that would come and those of you that will understand the complexities of these network systems, it's the architecture that you're building on that's very important and that enables the performance and the functionality. As a result of that, now, we have a very proven and highly credible, integrated maritime surveillance and management system. There's a lot of things that no other system does. The systems business goes after significant government contracts. It has 2 sides of that coin. It means that there aren't thousands of them and news every week and everything else and they take time. But when they do come through, they are significant and their long-term relationships. And there's -- it's not just a one-hit deal, and I've known there's a couple of questions here about that, and I'll explain that in the future. And we see robust established demand, as I said right at the beginning, the drivers that are there, and this new trend cycle created by the new -- by the availability of this new technology where you can have 50 operators around the country, all operating on within a single operating environment, sharing a single data set, working together, application of artificial intelligence on behavioral analytics, on individual vessels, all that sort of stuff comes together to enable you to spot the bad guy. So how does our MDA system work? It's pretty simple, as you'll see from that diagram, although our engineers will hate this diagram because it's not as simple as that. Quite simply, you have boats that are milling around and you will have boats that will have identification transponder on them and boats that don't, just the same as air traffic control. For boats that have an identification transponder, of course, those transmissions are received by co-stations if they're within range and if they're not by satellite and relaid back to a data center where a unique ID number matches it to an e-log, and you can see that it's [indiscernible] on its boat, Archie. And you can see the boat on your screen. Those boats that don't have an identification transponder, there is technology that enables you to detect that there is a vessel there and then you use behavioral analytics to then start to assess whether that boat should be there, whether it's a risk, et cetera. So you have vessel side of things, you then have satellites, which are able to detect certain things and feed data back in. We then have co-stations, we have data centers and we have operator consoles. Every SRT-MDA system has those components. The question is how many of those components, how many vessels, and therefore, how big does your data center going to be? How many co-stations are there, therefore, what changes to the data center? How many operators? You can have one operator looking at 500,000 boats and 100 co-stations linked to a data center. You could have 100 operator stations linked to one co-station looking at 1 boat. So it depends on the individual country, but it's the same ingredients. It's just a different mixture and matches. And in particular, in Asia, we're going to see a lot of recurring revenue through satellite data in addition to the sort of endless program of upgrades that carry on when you're building these systems. So -- and what that does is sort of yield the sort of landscape like this, this little diagram here, which shows that you've got quite a complex environment. So I just want to explain, you'll see the coastline there. And of course, the coastline has harbors where nobody is. It has ports, which are really busy. It has different towns where an authority might have an office where they want their operator stations. They typically have a central command center in their capital city from where they're commanding everything. And then you've got your territorial waters, which is your first white line, if you look out from the coastline, and that is 12 nautical miles. That is your first, if you will, area that you want to really know what's going on. And in that area, authorities want to know in real-time what's going on. And the only way to do it in real time is by co-stations. So you have your co-station surveillance using radars, cameras, AIS, RF detection covering in real-time out to 12 nautical miles. And typically, once you build a tower, as you'll see there, if you look in the pictures, you'll see a few little towers, actually, the range can be out to about 15 nautical miles. You've then got the second white line, which is what's called the EEZ, your exclusive economic zone. And the International Maritime Organization defined that out to 200 miles, you have the right to all the economic benefit within that bit of water. And that's subject to debate, obviously, in places like the South China Sea. And -- but fisheries is the key thing there and fishing rights and what have you. And so you want to -- you also want to understand what's going on there because you want to protect your economic asset, that being the fish. Part of that will be covered by the co-stations and part of that by satellites. But also, you've got coastguard vessels, and you can see there a coastguard vessel, it's got its surveillance. Also patrol aircraft, and it's doing its surveillance. All of that comes together into our SRT-MDA system and the people sitting on the shore in front of their screens see that on a single screen with a whole bunch of functionality that enables them to identify what's going on. And ultimately, this is what it manifests itself into. You have monitoring rooms, and you're able to know who all these vessels are, but what you want to do out of the thousands and thousands of vessels to detect the alert, who is the guy or the lady doing something that they shouldn't do? Are they fishing where they shouldn't be fishing? Are they planning a terrorist attack? Are they going to attack a vital economic asset like an oil rig or oil support supply and what have you. And the system uses all the data from the sensors to look at what's happening. And I'll just give you a couple of examples of analytics. So for example, it would be strange if a commercial vessel, which had previously been identifying itself with its AIS switches it off and goes outside of normal shipping lanes, meanwhile, a fishing boat goes near it. That's indicative of transshipment. What if 2 vessels at sea slow and come together? It's indicative of transshipment. What if a vessel that for 5 years has been going out between 9 a.m. and 5:00 p.m. suddenly is out at 3:00 a.m. and doing high speed towards a hotel in the middle of the night? So the analytics are constantly scanning all these vessel characteristics, behavior characteristics individually and relative to each other to identify alert criteria. And the system and the SRT-MDA system is pretty -- is unique in its ability to look at tens of thousands of vessels simultaneously. So you're talking about serious analytics and clever algorithms and things like that to detect these alerts. And because these are professional systems, this isn't a sort of media stunt, like some of the public websites, the high-quality data here. Then you have high-quality alerts. And then the system pushes the alert to the operators. It has an alert management system that allows the operators to be guided as to what actions to take, they can get a guidance from their commanders or their senior people in their organization as to what they need to do. They can action those responses through the system and then monitor and control all of that through the system and generate a report. You can even, for example, like a boat is speeding in -- where it shouldn't be, the system can issue by e-mail a ticket to that particular owner. But this is the principle of how the SRT-MDA system works. So let's talk about our sales process. It's long for systems. There's no getting around that. These are complicated projects. I would always say, thank the Lord we're not selling into the U.K., which because it would just be forever. So it starts with an idea from the customer. We don't go to the customer and say, would you like an MDA system, and I'd never thought of that. They always come to us, always come to us. Unless they have made that decision to do that, these systems are so complex, so much regulation and politically fraught, I would say, that you're not going to persuade people to have this. They have already decided. And it starts with, I would like to understand what's going on better in my maritime domain. And often the customer will come with some general ideas, but they don't really know the detail. So our sales process is a consultative one. And we don't charge for that. I often see people say, well, we should charge for that. It's just a ridiculous statement. We welcome the opportunity to consult with our customers. We've form relationships with them. We want them to adopt our system, our way of doing things, which we believe the best because we've carefully developed this thing over 5-6 years. And so it then takes time for us to then work up that particular flavor of the SRT-MDA system in the minds of the customer, involving lots of agencies typically within that country, lots of technical committees that have got to review it, politicians that want to review it, et cetera, before we get to a point where they've understood what a system is. And then there are the constraints on implementation. Are the regulations in place? Do they have the land to be able to put the co-stations in? Are the buildings ready to put the fancy control rooms in and all this sort of stuff. And once all of that started, you start the procurement process. And the procurement process can then require the particular agency that wanted it. So let's say, it's a coastguard or fisheries going to the government and saying, okay, I've worked all this through, I've consulted with the market, this is what I want. And then you go through their procurement process, which might be a tendering process, and a tender process can take a year. And that's before the tender is actually released. And then once we're in that process, then you have the contracting process, and I can tell you there are a couple of projects that we're just waiting for. At the moment, we've completed the procurement process and the raising of the contracting. This is where COVID was a bit of a pain, slowed that process down in the issuing of the contract because it can require 6, 7 different agencies within the government to issue the contract. But then finally, we are contracted and then we start the installation. And then as the installation goes in, then we start supplying satellite data and other data services, et cetera, which is recurring revenue. And typically, actually, when you're in the contracting stage, you're already back at the technical consultation on the next phase of the project with that particular customer. So I wish I could tell you the sales process is like, I don't know, buying a car, but it's not -- it does take time. The good news in all of that is we've been at it for a number of years, and a large amount of our VSP, half of it is in that procurement and contracting phase. So let's talk about our Philippines partner, BFAR IMEMS contract. There's a couple of pictures, 3 pictures there for you. On the top left-hand side is the Fisheries Management Center. It's all installed, up and running. We're able to track, monitor and manage their vessels in real-time. That's all powered by the data center, which is below that. You can see that there, running our GeoVS software. So all the data is pouring into that data center and then the operators are able to see it in their control rooms. And then on the right-hand side, there is a picture of a typical installation on a Philippine fishing boat. You can see the VMS-100 there on the left-hand side, which is the transponder. And then the ERS device, which is sitting on the right, which is running our GeoVS CONNECT fish application, and that enables the fisherman to key in what he's caught that automatically uses time, uses UTC, which is what GPS works on time to harmonize all the data, and that is transmitted by the VMS-100 back to the data center and is immediately able to be seen by the operators. Huge amount of data then being generated. So we are well into installing that. It's been tricky in the last 6 months, as you'll appreciate, because just the same as here where what you don't know whether you can -- You're in Tier 1, Tier 2, Tier 3 or whether you can go to places is constantly a vexing issue in the Philippines as well. I'll give you an example. We will plan to go -- our team will plan to go and install 50 transponders down in a particular port. They're already in Manila because Manila has come out of lockdown and then the port goes into lockdown. So just as you're prepared to go there, you can't go to the port. Then the port comes out of lockdown, but Manila goes back into lockdown. So we struggled with that. It's just become a fact of life. But despite that, credit to our product manager, Dean, who -- and I'm specifically saying -- telling -- saying about him because he's been there for most of this year alone -- working alongside our local installation partner. So a great personal sacrifice for his family and stuff, making sure that, that is progressing. And the result of that is the customer is paying well. They're making great progress. This is the world's largest fisheries monitoring system. They are light years ahead of anyone else in the region, their ability to monitor and track, manage their vessels every 15-minute updates. Credit to BFAR for going for it and credit to our team for putting that -- getting that system in. We've got another couple of years to run on that project. We expect the implementation to be completed towards the middle of next year. We're obviously already supplying the various satellite data and things that they need. And we are already discussing a next phase to expand beyond the 5,000 vessels. They do have 250,000 fishing vessels where they have an aspiration to be tracking all of them. So COVID's made it more difficult, but we're still cracking on. So what's next? Well, we've got lots of opportunities. I'm not going to read that slide too. But let's just talk about the Middle East. So we have 3 pending projects in the Middle East. They were due to -- and we expected to sign those in February, March this year. All the closedown stopped all those ministries. They then came out of their COVID restrictions towards the end of August and a lot of the paperwork then had to be revalidated and things because they're all timed out, and we're going through that process at the moment. In fact, we've got one chap in the Middle East at the moment, doing some final work and some pre-signing of contracts. So I sort of don't want to say, oh, I'm happy with the situation because I'd rather that I was saying here we signed them in March, but I'm happy that with the progress that is being made now and getting all the paperwork sorted out so that we can contract that in the very near future. We then have some follow-on and new contracts coming up in Southeast Asia. I'm not going to mention any specific countries that we have visibility of, and they could be in the region of sort of $50 million or so. And then we have some further opportunities in Central Asia that we're pursuing, courtesy of World Bank loans, particularly places like Bangladesh, who have big fisheries and security issue. We have some active opportunities in places like Sri Lanka. We're working on projects in Indonesia. And what I would say is across all of that VSP that we have, some have come out of the gate much more quickly than others. And we're obviously focused on those. And I think that the fundamental demand drivers for our systems business doesn't go anywhere. It's quite difficult for me to probably go into the detail that you would like me to go into because these are their projects and they're going through procurement processes and stuff. But what I would say is that read carefully what this slide says. And there's no exaggeration here on the opportunities that -- and the status of them where they are. So Middle East is exciting, and Southeast Asia is exciting for us as a focus point. Some of the African countries, there's a lot of talk and few of them now seem to be serious about it with budgets, but I think that will be more next year than this year, similarly with South America, but lots of business for us coming our way. COVID-19, well, everyone's got their opinion of it. I've got my opinion of it. My view is it's -- it ain't going anywhere. Lockdowns or otherwise, it's here to stay. I'm sure we'll just learn to live to -- learn to accept it and live with it. For SRT, people can work from home. We're lucky in that we're a development technology-based business. We've set up all our engineers so they can work from home. Those that can work from home do work from home and it's a permanent situation. So we spent about $10,000 on desks and chairs and all the rest of it. You've got to have a home to work in at home. If you want to work from the office, then you can elect to work from the office, you can't flip flop between the 2, and you set up. We make sure that you're in a safe environment within the office, social distancing and all the rest of it. As a result of that, nobody's been furloughed. We have continued to work and make progress with our development, and I'm very happy with that. It has not changed the market demand drivers. People still drown at sea. There are still terrorist attacks and friction between countries in the marine domain and fisheries still require certification to import fish into Europe. So none of that has changed. It's just created a delay, which is irritating, but we're now out of that delay. And I suppose the summary of it is the customers have sort of -- and I suppose that we all have, in a way, recovered from this initial shock and we're sort of getting on with life a little bit and reengaged. As I said a minute ago, some a little bit more aggressively than others. And yes, so you should hear from us a little bit more on that in the not-too-distant future. So in summary, I suppose, it's -- last year was irritating that those contracts were signed, but -- and it's been a tough few months, but we have a bright future ahead of ourselves, and that's courtesy of the right strategic decisions years of development to develop these complicated systems that we have and these amazing transceiver products that we have. And so I'm happy that we're here. We're solid, we're secure, and we've got a good future. So I'm going to -- I've got us another little laptop next to me, and I'm going to go through these questions and answer them all. I would say I'm not going to say who's asked them or anything else, so just ask them as you want.

So let's go through all these questions. Yes, we are generating recurring revenue now. We are selling satellite data into IMEMS system. They need it, obviously, because the vessels go over the horizon now out the range of the co-stations. I want to expand on that answer, but where we get recurring revenue and repeat revenue as recurring is satellite data, supplementary data. And there's every man and their dog is putting up satellites. So we have a huge array of different satellite data to buy from, which pays us in a nice competitive position. And so we're buying that and supplying that. And that, as there are more and more vessels and the systems expand, the amount of data they need expand. So it's an endlessly sort of expanding revenue line for us. But also, we get repeat revenue. Once you've installed the system, they want to then upgrade. We're seeing this in the Middle East, in Bahrain. We're seeing this in Philippines in the fisheries. They have big aspirations. It starts with to put a monitoring system and then track the 5,000 largest vessels. Now let's look at the next 50,000 vessels. And then, by the way, I want this new feature. So it's the start of a -- every time we sign a contract, it's a start of a long-term relation, there'll be multiple contracts. It's not worthy of an RNS, but the other day, we had some additional upgrades in Bahrain, a couple of hundred thousand dollars just like that. So it's an endless continuous progress. There seems to be a large number of low-orbit, near-earth satellites being launched. Are these a benefit to us or a nuance or whatever? They're a benefit. So you all know -- some of you will know, we looked at doing our own satellite system. Well, why would we do our own when everybody else is doing it? The satellite is just a location. The question is what sensors are on the satellite? And what's great is that there's lots of different satellites going up with lots of different sensors. So for example, there's now light detectors on certain satellites. There's a radar scanning sensors on certain satellites. There's loads of satellites with AIS receivers and things around the place. There's RF detection, there's all sorts of different things. So what that does is it gives us a source of really interesting data that we can develop functionality for, for detection of vessels. And so we can implement that functionality as an upgrade on the system, which then requires the purchase of that data, and we have a competitive market because there's lots of different LEO satellites. And a LEO satellite only has a life of 5 years because once it's in low earth orbit of 550-odd miles, the minute it's up there, it's falling. The second it's up there, it's falling. So there's a constant replacement cycle for new sensors. So far be it from being a nuance. It's a massive benefit to us. It's a very interesting data area. You always got to remember, though, satellite is a much lower resolution than the coastal side. And that's why no serious maritime domain awareness system really has any integrity unless it combines a terrestrial and a satellite element. So that gives you the full territorial water and the EEZ coverage. When the current project is completed, will there be further bits to fill in? What sort of maintenance, et cetera? So the IMEMS, which is with the Philippine fisheries with BFAR, is a 4-year project, and that's framed with implementing a whole bunch of equipment and systems and then data. Of course, at the end of that 4-year period, I suspect they'll want to continue to buy data, satellite data. So there will be new contracts for that satellite data. But also, I believe that they want to expand. BFAR, a very ambitious, clever people, in fact. And they want to monitor and control all their fisheries, which is nearly 0.25 million vessels. And so I would expect to see further contracts to expand the coverage of their very fancy system that they now have on that particular agency in the Philippines. That's leaving aside all the other agencies with whom we might be discussing things. What else we got here? I don't know what problems there are with COVID-19, what our systems would solve. It doesn't solve Boris' decision-making, unfortunately. I think I have to say no to that. I don't think our system solves COVID-19 issues at all. Our systems are quite simply there to improve security, environmental monitoring and safety. And those are long-term problems in the marine domain. And the new technologies and the new systems that we brought lift the curtains on the marine domain. Australia is a large country, we don't have any business there on the map you were showing. We sell transponders into Australia. I think Australia like Western Europe, like the United States, has a different approach to maritime security. I mean we'll see -- we see on the South Coast to the U.K. that we rely on patrol boats to rush out and find people. We haven't really got this sort of concept of persistent coastal surveillance yet, probably because we always feel sort of very safe. Whether that changes in the future, I don't know. Other countries have adopted a more -- they want border surveillance. So Australia, we sell transponders too. I don't see that there is an immediate demand for our system in Australia at the moment. We have enough on our plate in Asia and Middle East and stuff who have money to spend to solve the problems. So any progress to penetrate? Yes. Most of the AIS transponders sold in Australia are ours. We have a number of different partners, OEM. Most of our OEMs sell there. We have em-trak dealers, et cetera. So yes, we are happy to be selling there. Is it possible to give an update on system installation and training that's continuing at this time? Hopefully, I've provided that where we're installing our systems, we have contracts. We're doing demos to other countries, for example, Vietnam, Indonesia, Bangladesh, where they are in their latter stage of the consultancy phase. And then, of course, you've got Middle East and other places in Southeast Asia, we're really in there now and that's all done, and it's now in the procurement and contracting phase. I think I've answered every question. If you have any other questions, e-mail me or any other member of the Board at any time. I'd like to thank you, guys, for your support to get us here. It has been a long path. These complex technologies don't take -- it's not an app that takes a few minutes to develop. Actually, they don't. They take months to develop in reality, as anybody will tell you who's done one. But these big systems have taken us a long time to develop, but we now have these products and systems and solutions. We have the customers and hopefully will all be rewarded with some nice contracts, multiple contract signing in the not-too-distant future. And also when all of this COVID business calms down, it will all come down, enjoy some cakes, talk to all the people that we have here, the new people in product management, the new people in delivery, new people in our systems development. And I know that many of the staff of SRT are really keen to talk to our shareholders and things, and we'll be having that day as soon as we're allowed to do such a thing like that. So thank you very much. And if you've got any questions, give me a call. Speak to you soon. Thank you.