SimiGon Limited Trading Update (3688M)
July 28 2017 - 2:00AM
UK Regulatory
TIDMSIM
RNS Number : 3688M
SimiGon Limited
28 July 2017
28 July 2017
SimiGon Ltd
("SimiGon" or "the Company")
Trading Update
SimiGon, (LSE: SIM), a global leader in providing simulation
training solutions, announces an update on trading for the six
months ended 30 June 2017 (the "Period").
The procedural delays in concluding the signatory processes over
the contract with the Israeli Air Force for F16 maintenance
trainers (announced on 20 June 2016) have persisted, preventing the
Company from recording expected revenue of approximately $0.8
million during the Period. The Company continues to monitor closely
progress with the Israeli Air Force contract and expects that
revenue from this contract will be recognised in the second half of
the year. While revenue in relation to this contract has not been
able to be recognized for the Period, costs have been incurred
mainly as a result of additional Research & Development
investment in the business to ensure it is well positioned to
capitalize on new market opportunities. As a result of these
developments the Company expects to report revenue for the Period
of approximately $2.0 million and adjusted net loss before tax of
approximately $0.6 million.
SimiGon maintains a strong balance sheet with liquid cash
balances of more than $8 million as at 30 June 2017. The Company
continues to execute its strategy for the underlying business,
delivering project milestones for long term contracts and building
on its strategic position as a technology partner to its customers.
Over the past two years, the Company has grown its proportion of
SaaS-based contracts, and this base of recurring revenues continues
to support future growth by providing visibility of revenue under
contract. The Company is confident that a number of potential new
contracts will come to fruition during the second half of the year
and that the delayed revenue in relation to the Israeli Air Force
contract is expected to meet the required milestones to be
recognised.
SimiGon President & CEO, Ami Vizer, commented: "While we are
disappointed that the revenue associated with the Israeli Air Force
contract will not be recognised in the Period, we are confident
that there is significant upside potential from a number of the
contracts we are currently working on. We cannot, however, be
certain that the recovery we expect to see during the second half
of the year will lead to us achieving our full year market
expectations, and we will update the market further as soon as we
have greater clarity.
"We remain encouraged by the underlying progress we are making
in the business, and the Company has visibility over more than $21
million of contracted revenue over the next ten years of which
approximately 80% relates to recurring revenue streams. This
demonstrates the long term viability of the business and the
success of the transition to the recurring revenue model. While
this transition has contributed to the short term revenue decrease,
our belief is that this revenue model presents a much stronger
business proposition to our partners, clients, employees and
shareholders.
"Through a combination of existing recurring revenue streams and
new streams initiated this year SimiGon has already secured
recurring revenue for FY2018 of an amount over $5 million. This
serves as a great foundation for profitability and growth in many
years to come, and this, combined with a healthy pipeline of
opportunities, leaves me optimistic about the Group's growth
prospects over the long term."
Enquiries:
SimiGon Ltd
+1 (407) 951
Ami Vizer, Chief Executive Officer 5548
Efi Manea, Chief Financial Officer
+44 (0) 20 7220
finnCap (NOMAD & Broker) 0500
Henrik Persson/Scott Mathieson
(corporate finance)
Stephen Norcross (corporate broking)
Alma PR (Public Relations)
Hilary Buchanan/Josh Royston/Helena +44(0) 208 004
Bogle 4217
About SimiGon
SimiGon (AIM: SIM) is a leading developer and supplier of
distributed simulation solutions for defence and civilian
applications. SimiGon is the creator of SIMbox, a leading PC-based
platform for creating, managing and deploying simulation-based
content across multiple domains. Through its off the-shelf training
solutions for demanding high-skill occupations, SimiGon provides
diverse organisations with faster and more cost-effective training.
SimiGon's growing client base includes blue-chip training and
simulation systems providers as well as air forces and commercial
airlines worldwide. Founded in 1998, SimiGon maintains offices in
Israel and the United States.
This information is provided by RNS
The company news service from the London Stock Exchange
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