The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
LTI
What assumptions did you draw from this announcement in October:
In September 2019 CyanConnode announced that the Company had expected to secure substantial Indian contracts by the end of October following delays in new tenders being awarded caused by the Indian General Election. The award of these contracts continues to take longer than anticipated, and while they are still expected to be secured in the coming weeks, the Company is now unlikely to meet market expectations for 2019.
'My view is, not concerned about past results,' - which is why you've been mugging yourself off here for years (you have given us all a good laugh though). There's a huge track record of failure (I'll dig it out soon) at cyan and by JC which you've ignored to your cost. How much are your losses £££?
In September 2019 CyanConnode announced that the Company had expected to secure substantial Indian contracts by the end of October following delays in new tenders being awarded caused by the Indian General Election. The award of these contracts continues to take longer than anticipated, and while they are still expected to be secured in the coming weeks, the Company is now unlikely to meet market expectations for 2019.
CyanConnode has carried out a review of its order book. In 2017, orders worth $48 million received from NIK LLC were announced, for territories including Bangladesh and Ukraine, with deployments expected to be over a three-year period. Whilst the Company is still in dialogue with NIK LLC regarding a rollout of these orders, the Board does not believe revenue will be received from those orders in the near term. The Company's current order book, (excluding the NIK LLC contracts), is now GBP40 million.
From the interims:
During 2019, the UK Government announced that it had extended the deadline for the rollout of SMETS2 meters by four years to 2024. The DCC aims to connect around 53 million smart gas and electricity meters to its secure network using SMETS2 meters and, in March 2020, it announced that 4.2 million (7.75% of the meter population) had been connected. The roll out of SMETS2 meters commenced in Q4 2018 and CyanConnode believes that, for ease of rapid deployment, installers are initially targeting installations of SMETS2 meters in densely populated areas that have a reliable cellular signal. CyanConnode believes that the installation of RF Hubs will gain momentum during later stages of the rollout.
Under its SMIP contract, CyanConnode calculates that 2.3 million Toshiba RF Hubs will eventually connect to the DCC secure network, and it is now beginning to see a small amount of revenue from those connections. However, as CyanConnode's SMIP contract is still at a relatively early stage, it is still not possible for the Company to confirm whether its revenue forecasts from the SMIP contract are accurate.
So, they had £1m at end of Dec, received £1m from customers post YE. Yet they still needed to borrow against income that's due in 3 months (tax credit)? They're toast. There'll be no new contracts and income will dry up in the current climate, this is a company that has stated that it has difficulty getting customers to pay too.
They're running on fumes, I expect this to crash and burn this year.
Tony
In the case of cyan, it has always been best not to have an average. Look at the chart you fool, no one has made money here holding long term. There is money to be made, and I made a good return trading at Xmas.
How much are your loses in £?
This was holding up reasonably well against the rest of the market until today. Bearing in mind how everyone is aware that smets2 rollout is on hold for next six months, you'd think it would've been marked down. Suggests to me, market expecting nothing from UK this year, in spite, or perhaps because of what JC has said.
Pushing results to the final day possible is a massive red flag.
What will it take for the perpetually optimistic to realise India was and always has been a fruitless basket case. Wonder what they'll have to say for themselves when this goes to the wall. Hope you stick with us guys.