RMS.L Regulatory News (RMS)

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

7 July 2015

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

Update on UAV Wind Turbine Blade Inspection Solution

Strat Aero plc, an international aerospace services company focused on the provision of training solutions, management systems and consultancy services to the global aviation market, is pleased to provide a positive update on WindSpect (www.windspect.com), a revolutionary wind turbine blade inspection solution. WindSpect is a collaboration between Strat Aero and AirFusion, a leader in airborne sensor data fusion software and analytics technology, which combines the Company's expertise in the provision of Unmanned Aerial Vehicle ('UAV') solutions with AirFusion's innovative software and analytics, to offer superior assessment capabilities and significant cost savings to wind farm operators. This update is in line with the Company's strategy to capitalise on the rapidly emerging UAV sector in both the military and wider commercial markets.

WindSpect was officially launched at the American Wind Energy Association conference in Orlando on 18 May 2015 ('AWEA'). During the conference there were over 500 visitors to the WindSpect booth, making it the third most visited site. At the booth visitors were able to view a state of the art UAV hexacopter carrying out an inspection of a 22' high replica of a wind turbine blade using WindSpect, which then generated a report on the state of the blade. At the conference, Frost and Sullivan, a leading consulting firm covering a variety of industries including aerospace, defence and energy, described Windspect on Twitter as "an Impressive and top leading innovation to closely follow".

Following the conference, multiple discussions continue to take place with potential customers within the wind farm industry. The Company is currently advancing a number of leads generated from AWEA to provide onsite demonstrations of WindSpect's time and cost savings and performance benefits to operators, who together operate approximately 21,200 turbines, representing approximately 10% of wind turbines globally and in excess of US$10m of potential recurring revenue with varying degrees of probability of success. Examples of these prospective clients include 10 major wind farm operators, namely BP, EDP, Infigen, Nordex, Next Era, Invenergy, Virgin, Exelon, EON and General Electric.

Potential customers have expressed considerable interest in WindSpect's unique analytical capabilities. As well as combining data gathered by multiple sensors, AirFusion's software fuses and converts the data into an alphanumeric format which is then analysed by the software. Potential problems are automatically detected and graded for severity, along with an estimate for cost of repairs. The final report can then be downloaded into a client's in-house operating system. In addition, AirFusion's software has predictive functionality based on comparing the latest reports with previous ones to ascertain if a problem with a particular blade is building, allowing preventive action to be planned and executed.

Capt. Russell Peck, CEO of Strat Aero, said: "Combined with the right software platform, UAVs offer significant time and cost savings, as well as broader and enhanced service capabilities, to the growing wind turbine industry and wider commercial sector. We believe WindSpect, which combines Strat Aero's leading position as a provider of UAV training and services with AirFusion's patent pending and highly advanced Wind Edition Inspection software and analytics, fits the bill. Based on the excellent response we have seen from leading participants in the global wind power industry at AWEA, we are not alone.

"Wind farm operators recognise that proper maintenance of turbine blades begins with regular inspection. Currently, inspections of blades for erosion, cracks and skin de-bonding are primarily undertaken visually by an inspector on a rope harness, which can take up to six hours, are expensive, inaccurate and extremely dangerous. By contrast, within an hour WindSpect can generate an accurate report on each turbine revealing damage that is difficult or impossible to detect with the unaided human eye, such as hidden cracks and foreign bodies. By minimising downtime and boosting power generation efficiency, WindSpect promises to revolutionise the wind farm sector. We are therefore not surprised by the level of interest being shown by the industry in our solution. I look forward to providing further updates on our progress, as we focus on securing our first contracts and add another highly visible revenue stream to our business."

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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.

AirFusion

AirFusion develops next-generation aerial data analytics tools. Its patent pending AirFusion Platform fuses pixel-based data and extracts object information from airborne sensors and then analyses it in real-time. The findings are then integrated into enterprise systems such as ERP, CMMS and other critical management tools. For additional information visit www.airfusion.com.