RMS.L Regulatory News (RMS)

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

1 March 2016

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

Secures US$375,000 Contract for Proprietary Software

Strat Aero plc, the AIM quoted international aerospace company focused on the Unmanned Aerial Vehicle ('UAV') sector, is pleased to announce it has signed a contract worth an estimated US$378,000 over a five year period for its proprietary Digital Data Management software ('DDM') with ReadyJet, a leading service provider to the aviation sector.

DDM, previously known as AIMS and based on proprietary software designed for the aviation industry, has been developed by Strat Aero to also present, store and analyse data gathered during operations undertaken by UAVs, such as flood defence surveys and wind turbine inspections. It is therefore an integral part of the Company's full service UAV offering to commercial and military customers. Given Strat Aero's aviation heritage and DDM's extensive data storage and analysis capability, the Company has continued to actively market it as a customised enterprise resource planning ('ERP') offering to the wider aviation industry. The ReadyJet contract represents the culmination of extensive development work carried out by Strat Aero to address ReadyJet's needs. Highlights include:

· Five year contract worth an estimated US$378,000 based on expected users signed with ReadyJet, Inc. ('ReadyJet'), an industry-leading provider of interior and exterior aircraft appearance services operating across 14 states in the US and two centres in Canada

· Strat Aero has customised its proprietary DDM software to suit ReadyJet's requirements including tracking employees' time, calculating payroll, hosting and tracking required training that has been developed by ReadyJet

o DDM will also track schedules, documents, employee titles and positions

· Strat Aero has arranged for a dedicated server for them to speed up the processing to cater for ReadyJet's 1,500 employees across the US and Canada

· DDM software is a high margin business generating 80%+ gross margins and discussions are on-going with other potential customers operating outside the UAV sector

Tony Dunleavy, CEO of Strat Aero, said: "This contract win with ReadyJet for our industry leading UAV and aviation data solution known as DDM, is highly encouraging and represents, we believe, another large opportunity for Strat Aero as the market for this product at this price range is big and largely untapped. Our initial target customers have been Fixed Based Operators, and providers such as ReadyJet, which provide a range of services such as aircraft cleaning, refuelling, aircraft maintenance and catering. Typically they have large workforces operating in shifts around the clock, have fast moving stock levels that require constant monitoring, and operate from multiple bases around the world. Currently these businesses do not have access to a dedicated software package that can manage their entire operations.

"DDM is a specially tailored product that can fill this gap. With its customised and cloud based capability, it can transform business practices whilst at the same time delivering material cost savings. With this contract win and the extensive product development leading to this, we have an excellent platform with which we can establish DDM as the industry standard, and in the process generate significant recurring revenues for the Company, which can be reinvested into our core full service UAV offering to the commercial and military, as well as further analytical capabilities for DDM itself. Following the recent award of our first wind inspection and data analysis contract with Westar Energy, together with a growing pipeline of contracts and trials for our UAV offering, I believe we are entering a period of commencing significant revenue generation and I look forward to providing further updates on our progress."

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Notes

Strat Aero plc is a multi-divisional international aerospace services company, focussed primarily on the provision of complete client solutions in the Unmanned Aerial System ('UAS' market), which is predicted to show exponential growth over the coming decade. Commercial 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.