Marine technology group boosts annual revenues and halves losses

Annual revenues have risen and losses more than halved at Lancaster-based marine technology group, OTAQ.

During the year to December 31, 2023, the group achieved turnover of £4.407m, up from £2.561m, and pre-tax losses dropped from £2.512m to £1.216m. No dividend has been recommended.

Today’s report showed strong traction in the Aquaculture division with orders for 200 Shrimp sonar delivered in the second half of the fiscal year.

The Offshore division has shown strong growth, particularly benefiting from the continued demand and increased orders for Connector solutions and OceanSense products.

Following more than three years in development, OTAQ has completed successful trials of its Live Plankton Analysis System (LPAS), and in May 2024 launched LPAS at the Aquaculture UK conference.

A conditional placing to raise £1.7m through Secured Convertible Loan Note was announced on May 26, 2024, while a further £1m of secured convertible loan notes, is expected to provide working capital and balance sheet strength.

OTAQ targets the aquaculture and offshore markets and already has a number of established products in its portfolio. It is focused on further developing its presence, customer base and cross selling opportunities within core markets both organically and via acquisition.

Its aquaculture products, which include a sonar device – developed for Minnowtech LLC – to scan shrimp in ponds and water quality monitoring, are focused on maximising welfare and production yields.

Additionally, the company is developing a potentially game changing live plankton analysis product for finfish and shellfish farmers. It also continues to target opportunities in the acoustic deterrent devices market via its Sealfence product, which is used by salmon farmers, with global opportunities in Chile, Australia, Canada and Norway.

OTAQ’s offshore product range includes OceanSense subsea leak detection, Eagle IP camera systems, Lander seabed survey devices and Subsea electrical connectors and penetrators.

It is targeting a number of growth opportunities in new territories and has a strong client base including Expro, Amphenol and National Oilwell Varco. The company is also focused on the development of new products through this division, with the aim of increased cross-deployment of skills and technologies into the aquaculture arena.

The company is also developing high accuracy location trackers for specialist applications. Having already added clients within safety and multiple participant sport/racing applications, OTAQ is investigating wider market potential – including opportunities in the seafood industry.

The North Sea and wider oil market in which the Offshore division operates, and which impacts on demand for the Offshore division, has remained buoyant during the period, said OTAQ.

Demand in this division is expected to continue to be favourable in 2024 and will be supported by significant sales resources and dedicated product development support. Scotland is a key initial market for the group’s new live plankton analysis system (LPAS) and water quality monitoring product. Continued development of LPAS with the expansion into Australia and Chile continues in 2024.

The group has continued to invest in the development of new products and improvement to existing products. Investment in research and development, capitalised as development costs, amounted to £0.58m in the period to December 31, 2023, compared with £0.36m in nine months during 2022, equivalent to 13% of group revenue (2022 nine months: 14%). The aim of the group’s research and development team is to deliver key projects such as LPAS, water quality monitoring and shrimp sonar devices.

Addressing current trading and prospects, chief executive, Phil Newby, said he is pleased with the growth in sales achieved in the year, demonstrating the success of the strategy to diversify while focusing initial growth efforts in the Offshore division.

Future growth is planned to be delivered by both Offshore and Aquaculture through expansion into new markets and with the launch of newly developed products. He said: “Whilst we drive the sales growth, we continue to exercise firm controls on costs and cash in our drive to see the group returns to profitability.”

He added: “With an improved reported revenue for the year, the board remains confident in its current growth strategy, part of which is to commercialise a number of opportunities in the Aquaculture space.

“With LPAS systems now live, OTAQ is in constant receipt of highly valuable data that will, through a machine learning process, further enhance the AI engine and improve customer outcomes.

“We expect the placing of £1.7m secured convertible loan notes and the broker option for up to a further £1m secured convertible loan notes to provide the working capital and balance sheet strength needed to complete the commercialisation of our new products.”