SRJ Technologies Group PLC (ASX:SRJ) believes it has set the stage for steady growth during 2023 after last week ending an extended period of suspension from the Australian Securities Exchange Ltd (ASX).
The asset integrity business was reinstated to the ASX boards on December 22 following a market and company strategy overhaul and a CHESS Depository Interests (CDI) placement that raised $1.7 million in new capital.
READ: SRJ Technologies Group reinstated to the ASX following $1.7 million CDI placement
SRJ, which had been suspended from quotation since November 2021, also offered several other securities as part of its relisting prospectus, raising an additional $500,000 and offsetting its debts to Jindabyne Capital Pty Ltd, the placement manager, and its own non-executive directors in lieu of fees.
Strengthening revenue
Indicative of the progress made is the company’s revenue status, which is expected to be in the region of £1 million (approximately A$1.7 million) in calendar year 2022.
This figure represents a 200%-plus increase compared to the FY21 revenue of £321,000 (A$601,000).
SRJ says that intense sales and business development investment during 2022 has built the sales pipeline and this will continue to grow.
Looking to growth
Chief executive officer Alex Wood said: “Our vision is to become a global leader in the provision of integrated asset integrity services and solutions with a strategy focused on developing a group of integrated asset integrity businesses through acquisition and synergistic growth.
“We will be looking to acquire and grow established businesses and niche technology businesses and provide capital and management expertise to scale up - all within an entrepreneurial and technological business culture.”
On its path to growth in 2023, SRJ has established a number of strategic partnerships with specialist niche inspection contractors to deliver end-to-end asset integrity services and solutions for pipelines and production facilities.
Business development
A range of asset integrity consultancy and bespoke engineering projects have been completed for various customers globally, for example, BLJ, Rio Tinto (ASX:RIO), NOWCo, British Sugar, EDL, TAQA, EnerMech, etc.
Moving forward, business development efforts are being focused on specific geographical areas ie, Australia, Europe, Middle East and West Africa.
The company will make a senior business development appointment in January 2023 in a bid to further exploit the successes of 2022.
It says that the sales efforts and business development investment during 2022 has built the sales pipeline and it expects that this will continue to grow.
Strong growth drivers
“SRJ will build on the solid foundations created during 2022 in a highly fragmented growth market supported by strong drivers including ageing assets, the energy transition, increasing regulations and expectations surrounding net-zero and ESG credentials,” Wood said.
“We are excited about the opportunities as we move into 2023.”
2022 project work
On the project front, SRJ has completed the following during 2022:
- ADNOC - Sixty-nine clamps and enclosures design and installation, preventing a toxic gas release in a valve pit on Das Island. This is expected to lead to repeat business in 2023.
- SABIC - Large diameter oxygen pipe leak repair including the design and provision of a 10-inch #300 BoltEx® clamp to replace corroded bolts on an oxygen pipeline, along with flange enclosures on a 10-inch and an 18-inch flange to arrest an oxygen leak on the main O2 pipeline.
- MODEC - 3x hot bolting campaigns: from engineering assessment and work pack creation to offshore execution (bolt replacement) using SRJ BoltEx® clamps. Rental model and local delivery ensured successful delivery of these projects.
- Global FPSO Operator - hot bolting campaign including rental and sales options for the provision of BoltEx® clamps secured and commenced in Q4 2022 with a second expected in early 2023.
The sales model is based on advanced payment at order placement, therefore, producing positive cash flow.
Investors have welcomed the company update, sending shares 22.22% higher intra-day to A$0.11.