28 Jul 2017 07:00
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 | |
Ami Vizer, Chief Executive Officer | +1 (407) 951 5548 |
Efi Manea, Chief Financial Officer | |
finnCap (NOMAD & Broker) | +44 (0) 20 7220 0500 |
Henrik Persson/Scott Mathieson (corporate finance) | |
Stephen Norcross (corporate broking) | |
Alma PR (Public Relations) | |
Hilary Buchanan/Josh Royston/Helena Bogle | +44(0) 208 004 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.