Sarantel’s revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body.
As smartphones, cameras and GPS become even more important in people’s lives, miniature antenna specialist Sarantel’s (LON:SLG) moment may be approaching.
Sarantel has already held field trials with an unnamed, but major, Japanese manufacturer over the use of its GPS antennas in cameras to record the geographical location of a photograph.
Last month, Sarantel also announced its largest ever order, this time from an unnamed US manufacturer of military radios that wants to embed its antennas across its range of products.
Chief executive David Wither said he was especially pleased with this order as these type of companies are notoriously slow and cautious in choosing their suppliers and also because it is a multi-year contract.
It was also further evidence, he said, that after years of development work Sarantel’s hard labour is starting to bear fruit.
And it has not been an easy ride for the Wellingborough-based company to get to this stage.
The group first patented its antenna technology in 1994 and has spent almost £50 million since then honing its design and functionality.
But, according to Wither, real momentum is now building on the sales side to follow all of the R&D effort.
Sarantel was always recognised as owning a very smart piece of kit, but the key question was whether it would ever get it to the product stage or even find a market.
The recent upturn in orders has seemingly answered the first question, while the advent of smartphones and the growing use of GPS satellite positioning technology with its need for pin-point accuracy could answer the second in spades.
The clever bit in Sarantel’s antennas is that they are ceramic-based, which means they reduce the amount of the signal that the body absorbs by nearly 90 per cent.
That makes them incredibly precise - to a range of one metre – and this ability to track a signal so closely has not been lost on the military, which have been among the front runners in trialling Sarantel’s technology.
Itronix, a subsidiary of US defence giant General Dynamics that specialises in rugged mobile computing, will use Sarantel’s GPS GeoHelix antennas in its GD300 rugged computer, which is worn on the wrist or chest on a battlefield.
Sarantel has also received production orders from the General Dynamics and Thales for a rugged version of its GeoHelix antenna to be used on its Rifleman military radio.
An unnamed European manufacturer, meanwhile, trialled Sarantel’s antennas in body armour for soldiers last year.
But as the potential uses of smartphones have burgeoned in recent years, so have the potential non-military uses of Sarantel’s antennas.
AutoSeis uses the GeoHelix GPS antenna as part of a precision timing and location system that enables the probe to gather highly-accurate geological survey data for mining and resource companies.
US-based NAL Research Corporation also signed a deal for production orders of a second-generation Iridium antenna for use in a two-way messaging and personal tracking device.
GPS – based distance measurement cameras for golfers are also based on Sarantel’s precision-based antennas.
But it is the potential to embed antennas into smartphones for use in instant consumer marketing that could potentially propel Sarantel into the major leagues.
That was the rationale behind the camera trials in Tokyo last year and broker XCAP believes the near-term opportunity is in giving cameras accurate and fast geo-location.
“We can see opportunities in smartphones, both for enhanced reality applications and, say, letting retailers offer special deals via text as people pass their doors,” said the broker.
Last year, Wither said the trend for integrating devices was forcing people to come to Sarantel and if anything this integration trend has gathered speed since then.
Wither expects to announce more production order this year across its range, while the order announced this January will have a significant impact on revenues and cashflows in the current year to September, he added.
In the year to September 2011, Sarantel’s revenues were £2.2 million, down 24% on the previous year, but revenues from its new product areas more than doubled.
The company raised £3.5 million in the previous year, but in January said that it was considering a number of options for both short and medium term financing, including a commercial loan.
Indeed, Sarantel today secured a £2 million loan facility with HSBC.
XCAP suggested that Sarantel was confident about being able to fund itself going forward.
The broker also suggested the latest order would take the company “a long way” towards profitability even before any contribution from camera GPS contracts.
Wither is cautious on predicting too much too soon, but he admits it was a “breakthrough order” and that once other production orders start to kick-in as well it will be a turning point for the company.
XCAP says if serious volumes do start to come through on the camera GPS side, it may need to raise cash to fund the working capital, but by then the broker added the share price would be “far ahead” of where it is now.