TIDMCYAN
RNS Number : 5367U
CyanConnode Holdings PLC
19 January 2017
19 January 2017
CyanConnode Holdings plc
("CyanConnode" or the "Group")
Trading Update
2016 revenues of c. GBP1.8 million, showing an increase of 560%
over 2015
CyanConnode (AIM: CYAN), the world leader in narrowband radio
mesh networks announces a trading update for the 12 months ended 31
December 2016.
Trading for the period was in line with management's
expectations with revenues of approximately GBP1.8 million, which
is an increase of 560% compared to the same period last year. Cash,
as of 31 December 2016, was GBP3.9 million.
Importantly, a significant portion of revenue growth was
underpinned by the PVVNL and CESC deployments in India and the
long-term nature of subsequent contract wins provides improved
visibility going forward, with order backlog from existing
contracts going into 2017.
Operating Highlights
Acquisition of Connode Holding AB ("Connode")
The acquisition of Connode during the period was
transformational as it significantly expands the geographic reach
of the Group and enhances the product suite with a full
standards-based (IPv6/6LoWPAN) technology platform.
The enlarged Group is now well-placed to build its presence in
new markets and to cross sell to existing customers.
UK Smart Metering Implementation Programme ("SMIP")
In November 2016, the UK Data Communications Group announced the
official go-live of the UK smart metering project with the data
centre now active for communication between consumers and the
utilities and the rollout of smart metering can now commence during
2017.
The smart metering rollout in the UK will involve the rollout of
53 million gas and electricity meters nationwide by the UK
government target of 2020. CyanConnode was selected by Telefonica
and Toshiba to provide a software platform that uses narrowband
mesh technology to complement Telefonica's existing cellular
network, allowing previously off-grid households to be reached as
part of the UK SMIP. Telefonica was awarded a contract as the
preferred communications service provider in two out of the three
regions tendered by the UK Government. Telefonica's SMIP solution
is based upon its existing cellular network in the UK, supported by
CyanConnode's C4 solution, which connects households without
reliable cellular coverage (known as "not-spots" by the mobile
phone network operators). The CyanConnode software license and
support fees revenue is expected to be GBP25 million over the life
of the contract and we are pleased to report that the 2016
milestones under the contract were successfully delivered.
India
The Group continued to strengthen its relationships in India,
highlighted by the third Smart Metering Order with Larsen &
Toubro ("L&T"). This order for 4,700 additional smart meters is
part of a larger framework agreement between Tata Power Mumbai and
L&T and follows previous orders of 10,000 consumer meters in
Mumbai.
Tata Power continues to grow and now has over 2.6 million
consumer customers, including over 660,000 in Mumbai. They have
recently been awarded the distribution franchise for Jamshedpur
circle from the Jharkhand State Electricity Board ("JSEB").
The Group's two contracts, worth in aggregate approximately
GBP1.5 million from Enzen Global Solutions Pvt Ltd ("Enzen") and
implemented on behalf of Chamundeshwari Electricity Supply
Corporation Limited ("CESC") and Paschimanchal Vidyut Vitran Nigam
Limited ("PVVNL"), provided just under half of revenue during the
period.
At a January 2017 steering committee meeting hosted by the
Ministry of Power ("MoP"), and attended by representatives from the
State utilities, CyanConnode and Enzen were congratulated for their
successful delivery of the CESC project to date, viewed as a
significant success within the MoP funded pilot projects. The Group
understands that the MoP remains committed to installing a majority
of the planned 35 million smart meters by 2019 and are pushing the
local smart metering suppliers to accelerate their readiness for
volume deployments.
Rest of the World
The key contract win for the Group during the period was the
GBP10 million purchase order for smart metering from Micromodje in
Iran, which the Group expects to move into the delivery phase
during 2017. This contract was secured shortly after the country
sanctions being lifted and was 10 times the size of any previous
contracts won by the Group. Importantly, over 50% of the total
order value consists of software license income, meaning that the
recurring revenues from this purchase order will continue well
beyond the two-year hardware installation period. Furthermore,
there is scope for significant growth, with CyanConnode well placed
to benefit from the new National Smart Metering Program of Iran,
replacing the electricity meters for all energy consumers which
represents around 33 million meters.
During the period it also extended its reach into Sweden through
an order from E.ON and a follow on order from Landis+Gyr for a
utility customer in Finland, as well as into expanding into
Thailand via an agreement with the JST Group ("JST") to distribute
CyanConnode's smart metering technology.
Outlook
The Group has now established itself around the world with the
leading system integrators and end users of smart metering
solutions. The proven ability to generate repeat orders from
existing customers provides a strong foundation for further
contract wins during the year ahead as well as deliveries against
existing contracts. The Group now has a strong pipeline of new
opportunities and management is confident that it will be able to
further build on the significant progress achieved during 2016 over
the next 12 months.
John Cronin, CyanConnode Executive Chairman, commented: "We are
delighted by the strong performance during the period with record
revenues reflecting the strength and growing maturity of our model.
We have good backlog of orders from India, Iran and the UK. The
global opportunity is clear and our ability to generate revenues in
a number territories looks set to underpin a strong period of
growth for CyanConnode."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). This inside
information is now considered to be in the public domain.
Enquiries:
Tel: +44 (0) 1223
CyanConnode Holdings plc 225 060
John Cronin, Executive Chairman www.cyanconnode.com
Cantor Fitzgerald Europe - Tel: +44 20 7894
Nomad and Broker 7000
Andrew Craig / Richard Salmond
Beaufort Securities Limited Tel: +44 (0) 20
- Joint Broker 7382 8300
Jon Belliss
Walbrook PR - Financial PR Tel: +44(0) 20 7933
8780
Paul Cornelius / Nick Rome cyanconnode@walbrookpr.com
About CyanConnode
CyanConnode is a world leader in narrowband RF mesh networks
that enable Omni Internet of Things (IoT) communications. Its
innovative solutions use sub GHz frequencies and are optimised for
exceptional performance. Ultimesh solutions provide end-to-end
quality of service and total cost of ownership and Panmesh delivers
standards-based IPv6 solutions, enabling rapid innovation for the
implementation of 3rd party applications. Through its global
partner eco-system, CyanConnode provides customers with the
flexibility and choice required to converge networks for
applications in smart cities and IoT, delivering increased customer
value.
For more information, please visit www.cyanconnode.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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