Trading Statement

RNS Number : 9136A

CyanConnode Holdings PLC

04 January 2018

 

CyanConnode Holdings plc

("CyanConnode" or the "Company")

Trading Update

CyanConnode (AIM:CYAN.L), the world leader in narrowband radio mesh networks today publishes a trading update for the year ending 31 December 2017.

Financial Highlights

During the course of the year, the Company has continued its positive momentum with significant orders from a range of customers across different jurisdictions.

At the end of the financial year, the Company had an order book of in excess of $100 million and an identifiable global pipeline of approximately $320 million, which the Board believes provides the Company with a strong platform to significantly grow the business.

The orders generated during 2017 represented a mixture of smaller orders, either as part of a wider roll out or as a pilot project, and larger orders, which built on previous order book in Iran and the United Kingdom.

However, the Company has been notified by a significant customer that deployment for one of these larger contracts has been delayed, owing to circumstances outside the Company's control, and that deployment is now expected to commence in the first half of 2018. This customer has reiterated that it remains committed to using CyanConnode for this project and additional projects in other jurisdictions. Therefore, given delivery is now expected to be made during 2018, hardware and service revenues relating to this project will now be recognised in the Company's current financial year. As a result of this delay, revenue for the 12-month period to 31 December 2017 will be significantly below market expectations at £1.2m.

Despite the investment in the hardware and services referred to above, the Company ended the year with more than £5.5 million of net cash, with further inflows of in excess of £1.3 million expected over the near-term from R&D tax credits and funds yet to be received from the issue ordinary shares as announced at the time of the fundraising in September 2017.

Outlook

The Company remains confident that the hardware element of its current order book will be fulfilled over the course of the next 18-24 months, with software being installed alongside. Further significant orders are also expected during 2018, including further roll outs in India and expansion into new territories. The continued positive momentum in the pipeline has been aided by re-alignment of key employees to create a world class team over the last 12 months, which has enabled the Company to develop and refine new and existing offerings, such as the launch of Omnimesh IPV6, which has led to a wider spread of meter manufacturers with which the Company engages. These include Genus and L&T from India and also various Chinese meter manufacturers.

This momentum is expected to accelerate as the Company continues to develop new products, such as communication technology for battery powered water and gas meters. During 2018, the Company also expects to benefit from the roll-out of the UK Smart Metering Implementation Programme.

As the smart metering industry is developing, different technologies such as GPRS are being trialled by utilities around the globe. CyanConnode believe that RF mesh is the best suited technology to the markets in which it is operating. A full discussion and comparison of these two technologies can be found at http://cyanconnode.com/wp-content/uploads/2017/12/RF-Mesh-Vs-GPRS_USV2.pdf.

John Cronin, Executive Chairman, commented: "2017 was a year of significant operational progress for the Company, with the order book increasing to in excess of $100 million and new orders being received across multiple jurisdictions. Whilst we are disappointed that this large order for 2017 has been delayed into 2018, we believe that this is purely a timing issue and we expect 2018 to be a year of further significant progress and a marked increase in revenue generation. During the first half of 2018, the Company will concentrate on delivery of this order and the current order book, and conversion of the global pipeline totalling circa $320 million into contracts, aided by further developments to the Company's current offerings."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

CyanConnode Holdings plc	Tel: [phone]
John Cronin, Executive Chairman	www.cyanconnode.com
finnCap Limited (Nomad and Broker) Adrian Hargrave/Giles Rolls (Corporate Finance) Alice Lane (Corporate Broking)	Tel: [phone]
Walbrook PR (Investor Relations)	Tel: [phone]
Paul Cornelius / Nick Rome	[e-mail]

About CyanConnode

CyanConnode is a world leader in narrowband RF mesh networks that enable Omni Internet of Things (IoT) communications. Its innovative solutions use sub GHz frequencies and are optimised for exceptional performance. Optimal solutions provide end-to-end quality of service and total cost of ownership and 6LoWPAN delivers standards-based IPv6 solutions, enabling rapid innovation for the implementation of 3^rd party applications. Through its global partner eco-system, CyanConnode provides customers with the flexibility and choice required to converge networks for applications in smart cities and IoT, delivering increased customer value. 

For more information, please visit www.cyanconnode.com.

 

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