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Structural Monitoring Systems (SMN AU — US$44 million) is an ASX-listed, UK-domiciled but fundamentally Canadian aerospace business.
The company started as a research & development business to help airlines maintain the structural integrity of their aircraft.
But in 2018, it acquired Anodyne Electronics Manufacturing (AEM) in Canada. It was formed in 2009 by a group of engineers laid off from another avionics company, based in the aerospace manufacturing hub of Kelowna, British Columbia, Canada. This group of 24 engineers have a great reputation within the industry, and has built relationships with Airbus Helicopters, Leonardo and Bell. In fact, AEM has become so successful that it's now the operational entity for the entire business:
Today, Structural Monitoring Systems and its subsidiary AEM focuses on three separate segments: contract manufacturing, avionics products and a new technology called Comparative Vacuum Monitoring, or in short "CVM".
The legacy segment is contract manufacturing for aerospace firms like Canyon AeroConnect. Margins are low, and most of the value is captured by its clients. Roughly 40% of revenues come from contract manufacturing, and a much smaller portion of profits.
Instead, the company is now focusing on avionics products such as cockpit consoles, loudspeakers, communication systems and radios.
These are high-margin products with EBITDA margins of 38%. Most of AEM's avionics products are used in special-mission helicopters, including those for aerial firefighting, law enforcement, and search & rescue operations.
The avionics segment is growing nicely, with revenues roughly doubling since 2022. Partly because competitor Cobham exited the special mission avionics segment, with its successor organization only supporting legacy units. But AEM's customers are also doing well, with Airbus Helicopters receiving a +20% increase in orders in 2025 with a book-to-bill ratio well above 1.0.
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