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Sarantel’s latest contract win is a strong endorsement of its technology - Edison Investment Research

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Edison Investment Research published a note on Sarantel Group (LON:SLG) in the wake of the group’s announcement it is set for a US$287,000 cash boost after agreeing a new tie-up with a US defence contractor.

The company said it will use the funds to develop two compact, high-performance antenna designs for defence and security applications. It has already received some of the cash and the rest is expected to follow in the coming months.

One of the products is a high performance single frequency GPS antenna and the other a GlobalStar antenna.

Edison said it understands that both products are for use by the US Navy. It pointed out that the latest is a separate development contract to the one signed in November 2010, which was with a different US defence contractor for the development of an antenna for portable military satellite communications.

The company anticipates completing the development by June 2011, and expects to reach volume production in the next 12-18 months.

“The military market demands high performance and high reliability, and we view the building contract momentum in this area as a strong endorsement of Sarantel’s technology,” the research house said.

Sarantel produces tiny but incredibly potent antennas used in GPS devices. Its specialist antenna - a copper coated, centimetre-high capsule - negates the effect of the human body which absorbs radiation and distorts the signal. The high-performance antennas are superior, but understandably more expensive, than the ‘run-of-the-mill’ components used in most GPS devices.

Importantly they can offer device manufacturers greater accuracy, and therefore broader applications.

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