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VERY encouraging news:
Https://www.investegate.co.uk/simigon-limited--sim-/rns/simigon-signs-bpa-with-the-us-dod/201904180700085573W/
"SimiGon signs Blanket Purchase Agreement with the US Department of Defense
SimiGon (LSE: SIM), a global leader in providing simulation training solutions, is pleased to announce that SimiGon has signed a Blanket Purchase Agreement ("BPA") with the U.S. Department of Defense ("DoD") Enterprise Software Initiative ("ESI"). Under the BPA, SimiGon and the DoD ESI have established agreed pricing and processes for government customers to purchase the Company's products and services.
ESI is an official DoD initiative sponsored by the DoD Chief Information Officer to both establish and manage enterprise commercial off-the-shelf IT agreements, assets, and policies. DoD ESI lowers the total cost of ownership across the DoD, Coast Guard and Intelligence Communities for commercial software, IT hardware, and services.
The DoD ESI provides an effective method for approved software publishers, hardware vendors and service providers to streamline sales to the DoD ESI customers. The total potential sales amount for all selected vendors under this BPA is approximately $238.6 million over a period of 10 years commencing 1 April 2019.
SimiGon President and CEO, Ami Vizer, said: "We are delighted to join DoD ESI under this BPA. Through signing the BPA, SimiGon joins blue chip technology companies such as IBM, Microsoft, Oracle and Adobe as an official DoD ESI BPA contract holder.
The BPA is another validation of SimiGon's technology, software products and business model as a viable solution for Federal agencies seeking advanced training and simulation solutions for multiple domains."
Agreed.
I suspect the price reaction is largely a function of SIM being undervalued previously - the m/cap was less than the cash pile (and even now is still not much above it).
It's an RNS Reach as there's no specific financial information to validate the tests for a full RNS. An RNS Reach announcement is simply non-regulatory in that sense, but still significant enough to announce.
It's a framework agreement which acts as excellent validation for the company. And for a £7m m/cap company with $5m revenues last year and a £5m-£6m cash pile, even just $1m per annum additional revenues would go a long way :o))
This sounds excellent, very impressive for the company going forward.
yep defo one for the watchlist
will wait till this spike settles before entry
should settle back down
As a part of a diversified portfolio, I believe that:
- with the £5m-£6m cash pile almost equal to the m/cap
- with a number of long-term blue chip customers
- with the transition to recurring revenues largely complete
- with the obvious potential in VR/simulation
- with similar potential in diversification into related areas
- with a number of contract RNS's securing income for this year
- and with a more positive outlook for this year and going forward per the last trading statement
the upside remains large - if SIM finally get it right - and the downside from this £6.3m m/cap (there are only 51.4m shares in issue) is relatively limited.
As jam tomorrow goes this is really good, really like it. It's not a contract, but they are on the list of "approved" software providers for the whole U.S. Department of Defense, (and boy, what a list it is: IBM, Microsoft, Oracle and Adobe, etc.)
It is not just a nice statement of intent from Simigon but deliberately initiated by the DoD itself to make purchasing easier for it's own deptartments, with agreed pricing and processes already established with selected approved suppliers. NB approved, with pricing already agreed.
And the SOPs [standard operating procedures] already down sorted and on paper. The military works on SOPs, and a huge part [90%?] of what they do is train.
The only problem is that SIM doesn't supply standard office kit and software, which is what this 10 year budget appears to me to be for, but very high tech VR training kit, with accompanying software. However they are in and officially approved, the pricing and procedures are agreed, and they may be the only ones on the list selling applicable VR training solutions. Once accepted through this, and using the prepared pricing and pathway, it may open the way into what must be a simply ginormous US DoD training universe.
As Rivaldo says, just a small contract would make a big difference to a minnow like SIM, but a successful first contract would I believe open the door to very, very, much more.
If they had to choose one client across the world to be an "approved provider" for surely it would be the US DoD.
And this validates that SIM's offering is as good as any out there, there's no way they could get it otherwise.
It's great to have the opportunity of this price retrace to top up big time.