Orca Interactive Ltd
30 December 2005
Orca Interactive Ltd ('Orca' or the 'Company')
Contract Win and Trading Update
Introduction
RA'anana, Israel - 30 December 2005 - Orca (LSE: ORCA), a global market leader
in developing middleware and applications for IPTV (Internet Protocol
Television), today announces that it has secured a further significant contract
win, however, the timing and terms of the contract will mean that revenues for
the year to 31 December 2005 will fall significantly short of market
expectations.
Contract Win
Orca has today signed a strategic contract (the 'Contract') with a franchise of
one of the world's leading media companies (the 'Franchise') to become the sole
provider to the Franchise of a full video-on-demand service. The Contract will
initially result in $3.0 million of committed revenue to Orca. Given Orca's
status as the sole provider to the Franchise, the Board of Orca also believes
that this deal has the potential to generate substantial further revenues over
the coming years.
In addition, Orca has agreed to acquire a minority stake in the Franchise for an
investment of $2.5million. The Board believes that this investment will provide
Orca with an opportunity to benefit from the expected significant growth and
future profitability of the Franchise. The Board also believes that having a
strategic relationship with a global media company has the potential to enable
Orca to introduce an important value added partner, in the form of content, to
future bids, which will strengthen Orca's position in the market.
A significant proportion of Orca's overall revenues from the Contract will be
generated from the provision of licenses for the use of Orca's RiGHTv IPTV
middleware. In addition, as Orca is the prime contractor, revenues will also be
generated from professional services and complementary 3rd party IPTV solution
systems.
Pursuant to the Company's accounting policies, and as the Contract has been
signed later in the year than the Board originally anticipated, the Board
expects to recognise only a small part of the initial revenues from the Contract
in the current financial year.
Trading Update
The Board now expects that revenues for the second half of the current year will
be broadly similar to those reported for the first half and, therefore, that
reported revenues for the full year ending 31 December 2005 will fall
significantly short of current market expectations. Net cash at the year-end is
expected to stand at approximately $21m.
The Board is continuing to see strong growth in the Company's pipeline of
opportunities, as an increasing number of telecoms and media companies prepare
to deploy IPTV services. It is expected that a number of these opportunities
will result in revenue generating contracts in 2006.
Haggai Barel +972 9769 9400
CEO, Orca Interactive
James Melville-Ross / Cass Helstrip +44 20 7831 3113
Financial Dynamics
This information is provided by RNS
The company news service from the London Stock Exchange
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