46% in fifteen days! Is this Expenny stock a FTSE gem at 59p?

I think it's fair to say that SRT marine systems (LSE: SRT) has proven to be a hidden jewel for smart investors who bought a year ago. It doubles at that time and exploded 30% higher in the Ftse aim all-share index Today (March 27).

In fact, since it touched a penny of 19p in May, it has jumped for 200%! This gives the company a market capitalization of £ 149 million, which means that it remains a relative spirit within the General Securities Market of the United Kingdom.

Should I buy this small capitalization action? Let's explore.

On the crest of a wave

SRT makes advanced maritime surveillance and navigation. Its systems are used by the guards of the coast, fishing and national agencies to improve maritime security, environmental protection and regulatory compliance.

The price of the action has been driven by a constant flow of new contracts. In October, he said a $ 213 million contract with the Kuwait Interior Ministry to provide an advanced maritime surveillance system for 12 years.

For the context, SRT generated income of £ 8 million in its financial year 2022. So this was clearly a transforming agreement for the company.

Then, in December, he signed a 10 -year contract worth $ 9 million with an existing client of the Coast Guard of the Middle East, followed by the beginning of the second phase of a project with a coastal guard of an unleashed nation, valued at $ 15 million.

Why has the action increased 30%?

Today, the firm has just published its half -year report during the six months until the end of December, and was incredibly strong.

The income shot at £ 26.2 million, compared to £ 5.5m, and the gross profit margin improved 46%, compared to 37%. And SRT jumped from a loss of £ 4.6 million in the same period last year to a profit gain of £ 2.8 million.

Meanwhile, its high -growth systems business now has £ 320 million of active projects, all of which are scheduled for implementation in the next two years. Some have continuous data and support contract periods of five to 10 years, providing long -term recurring income.

President Kevin Finn commented: “The future of our systems business is increasing. “

Mass pipe

In September 2023, I wrote that SRT “”The total directionable market seems very large … The action is an interesting game in the long -term digitalization of the world maritime surveillance industry“

I still think this. However, I sold my SRT actions in 2024 to invest in Windward (Another maritime technology company). I didn't want to own both. But Windward was recently collected with a considerable premium to what I paid.

The SRT update was very encouraging, but several -year projects in emerging markets carry risks of execution and delivery. Political changes in client countries could affect payments, while the business is still profitable.

In addition, based on last year's revenue of £ 14.8 million, the sales price ratio is around 10. That is expensive. However, I am reading speculations that the income of the whole year could now reach more than £ 80 million. That would be approximately an annual increase and would make the valuation seem more attractive.

Looking to the future, the company sees a portfolio of opportunities of existing and new customers that are worth even £ 1.2bn. This means that the stock could still be a gem and I am considering adding it to my wallet.