Simon Tucker, boss of Software Radio Technology (SRT), says next year should take the loss-making specialist group into the black.

Mendips-based SRT, which lost £800,000 in the year to March 2006 and incurred a £1.1 million deficit in the six months to September, has spent £14 million over five years developing secure radio communication system Tetra (Terrestrial Tracked Radio) for use by the military, police and other security forces. The AIM-listed company, which grew out of the former research subsidiary of Securicor, has also developed the ‘AIS’ automatic identification system, primarily for the marine sector, especially in the USA.

Tucker says both stand to make important commercial breakthroughs in 2007. The company has reached agreements with China’s three million-strong People’s Liberation Army and the five million-strong Chinese police to buy locally made handsets incorporating Tetra and has clinched similar deals in Korea.

Production starts this year after technical glitches last autumn delayed the launch. Makers must pay around £600,000 upfront to SRT and, crucially, must also pay the company $30 (£15) for a proprietary chip, made in Austria, for each machine, without which none would work.

Tucker suggests Tetra could generate revenues of £20 million a year. However, he claims AIS could be bigger, especially if the US Coastguard makes it mandatory for smaller vessels under Washington’s ‘homeland security’ drive.

Provided SRT can reduce the price significantly from today’s $4,000, Tucker argues such a rule could be imposed next year and speculates it could generate revenues of $400 million over three years, or £67 million a year. The company is seeking to diversify AIS’s uses and is talking to a Swedish car maker about possibilities.

With pre-float backing from former Tory minister Lord Baker, ex-Motherwell Football Club chairman John Boyle and others, SRT was floated in late 2005 at 35p by Westhouse Securities (now Hanson Westhouse). At 47p, the shares are speculative, but might reward a long-term punt.

Software Radio Technology	AIM	£10.03m	10.25p	0.00p
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Profits in sight, says SRT			07/03/2007
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