RMS.L Regulatory News (RMS)

Strat Aero plc / Index: AIM / TIDM: AERO / Sector: Support Services

12 January 2015

Strat Aero plc ("Strat Aero", the "Company" or the "Group")

Letter of Intent signed to advance Northern Europe's First UAV Pilot Training Base

Strat Aero plc, a revenue generative international aerospace services company focused on the provision of training solutions, management systems and consultancy services to the global aviation market, is pleased to announce that it has entered into discussions at a senior level of the Netherlands Government with a view to establishing an Unmanned Aerial Vehicle ("UAV") Training Centre in the Netherlands (the "Training Facility"), which when operational would be the first in Northern Europe. The Company has been highly encouraged by the pro-active steps taken by the Government of the Netherlands in order to fast track the development of this Training Facility.

In order to facilitate progress towards a binding agreement the Company has entered into a non-binding Letter of Intent ("LOI") with Innovation Quarter, the regional economic development agency for the Dutch region of West Holland. As part of that LOI a framework has been set out including the capacity requirements for the Training Facility as set out below.

· A future agreement with the Government of the Netherlands is expected to cover the following matters:

o The Government of the Netherlands will source and make available a location with suitable fixed facilities in which to establish a new comprehensive UAV training base for both civilian and military training on fixed wing and multi rotor unmanned Aerial Systems ("UAS")

o The site is expected to include a runway of 8,000ft enabling full operational UAV training for large fixed wing UAVs

o Hanger capacity for six Northrop Grumman SandShark UAV training aircraft, one Predator and one Reaper, both Military operational fixed wing UAVs

o Strat Aero will invest in the establishment of the Training Facility including the provision of ground based equipment, training materials, management personnel and the provision of training aircraft

· The Training Facility will provide Sandshark training, designed to simulate Predator and Reaper platforms, as well as light multi-rotor UAV training for commercial pilots

· Research and development and training infrastructure and services will be available to universities and civilian organisations

· The Training Facility is expected to be a multinational resource available to all EU member states

· Strat Aero has the required management and financial resources in place to rapidly progress the development of the facility subject to final agreement of terms

· The Company is scheduled to make proposals to the Government of the Netherlands and to inspect the proposed site during January, subject to successful completion of these meetings it expects to advance to binding contractual phase during Q1 2015

· Establishment of the Training Facility is in line with the Company's strategy to build a leading aviation services provider by capitalising on multiple growth opportunities identified in all three of its existing divisions: UAV Pilot Training and Services; Aviation Management and Consultancy Services; and Aviation Software, Products and Services

Capt. Russell Peck, CEO of Strat Aero, said:"We view this LOI with Innovation Quarter and discussions with the Government of the Netherlands to establish and operate the first UAV pilot training and research and development centre in Northern Europe as testament to Strat Aero's high standing within the aerospace sector, and the rapidly emerging UAV market in particular. Our team has proven expertise in delivering solutions to both the government and private sector, as demonstrated by the establishment of a unique UAV pilot training facility in New Mexico and our co-operation agreement with a leading US defence contractor to operate a UAV pilot training programme. With the number of commercial and military applications for UAVs forecast to increase significantly in the years ahead, the need to ensure operators are trained to the highest standards is paramount. Thanks to our established reputation and early mover status in the sector, Strat Aero is well placed to capitalise on this huge opportunity and in the process become the go-to provider of bespoke UAV training and solutions. I look forward to providing further updates in due course as the project progresses to full contract stage."

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Notes

Strat Aero plc is a multi-divisional international aerospace services company, focussed primarily on the provision of Unmanned Aerial System ('UAS') training solutions, airline management systems and consultancy services to the international aviation market. The Company has three existing divisions: UAS Pilot Training and Services which operates from the fully functional and multi-faceted UAS Training Centre in Roswell, New Mexico; Aviation Software, Products and Services which includes the Company's proprietary advanced aerospace management system, a cloud-based enterprise wide management solution for the aerospace sector and potentially, other sectors; and Aviation Management and Consultancy Services which has multiple contracts in place including project management of the establishment of a new low cost airline in the Middle East.

The UAV division is looking to capitalise on opportunities resulting from the forecasted strong growth in the airline industry and in particular, the predicted exponential growth in the emerging UAV industry over the coming decade. Civilian, law enforcement and military applications in UASs are expected to be a dynamic growth sector in the aerospace industry over the next 10 years with the UAS market forecast to grow to more than US$82.1 billion between 2015 and 2025 (AUVSI Economic Report 2013) and the global airborne Intelligence, Surveillance and Reconnaissance ('ISR') market estimated to grow to US$19.23 billion by 2023. Strat Aero already has major contracts in place with international aviation companies, government bodies and universities including and importantly, an agreement with one of the largest US defence contractors to train military pilots to fly fixed wing UAVs at its Roswell centre.