SIM.L Regulatory News (SIM)

4 Jan 2008 07:00

SimiGon Limited04 January 2008 4 January 2008 SimiGon Ltd Trading Update SimiGon Limited ("SimiGon" or "the Company"), a developer and global supplier ofcomputer simulation software to the defence, aviation and industrial sectors,provides an update on trading since the announcement of its interim results on31 July 2007. In 2007, the Company was confirmed as the partner of choice to providesimulation training as an important element of major long term internationalprogrammes worldwide including Lockheed Martin's UK's Military Flying TrainingSystem and the F-35 Lightning II Joint Strike Fighter training programme. However, as mentioned at the time of the interim results SimiGon faced the risksin the initial stages of these programmes of there being a timing lag betweenbeing selected as the preferred supplier of simulation training technology andcommencement of the delivery of the systems. Hence, it was difficult to predictfrom when the Company would start recognising the revenues. The finalisation ofthe contract between Lockheed Martin and the respective parties is still ongoingwith a view to commencement of the training programme in H1 2008 rather than asexpected in H2 2007. These delays are typical of the defence industry and havenot resulted from concerns with SimiGon's products. These delays have had a knock-on effect on SimiGon, which was expecting todeliver its systems and start recognising the revenues in H2 2007. As a result,the Company expects revenues for the full year 2007 to be approximately $5million, falling at the lower end of market expectations. While this short term setback has been frustrating, the timing of such majorcontract completions is out of the control of SimiGon and the long term view ofSimiGon's management remains positive. On the fundamental level SimiGon is doingwell and winning business, as highlighted by the award of a $2.4m contract inNovember 2007 from an international customer. Ami Vizer, Chief Executive Officer of SimiGon stated: "It is disappointing thatseveral contracts have been delayed, postponing our expected revenue growth from2007 to 2008. We continue to bid successfully for contracts that are in someinstances much larger than in previous years but the length of time for thesecontracts to be awarded is longer. "Although there has been a delay in generating revenues from some contracts theCompany remains well positioned for long term growth after establishing itselfas the main supplier of simulation training in the world's top pilot computersimulation training programmes. Looking forward into 2008 and particularly 2009, the company expects to recoupthis shortfall as these large long-running defence contracts in the US and theUK will increase in value, and this should add stability to earnings. This givesus confidence in the long term growth prospects of the Company and our abilityto deliver shareholder value." Enquiries: SimiGon Limited Ami Vizer, CEO +1(407)3340402 Haim Yatim, CFO +972-9-9561777 Corfin Communications Harry Chathli +44 (0) 20 7977 0020 Martin Sutton Evolution Securities Ltd Jeremy Ellis +44 0207 071 4300 This information is provided by RNS The company news service from the London Stock Exchange