Trading Update

RNS Number : 3165N

CyanConnode Holdings PLC

17 January 2019

 

CyanConnode Holdings plc

("CyanConnode" or the "Company")

Trading Update

FY Revenues significantly exceed those achieved in FY 2017

CyanConnode (AIM: CYAN), a world leader in Narrowband Radio Frequency (RF) Smart Mesh Networks, announces the following trading update for the year ending 31 December 2018.

Financial Highlights

CyanConnode expects FY 2018 revenues to be approximately £4.7 million, up 400% on FY 2017 revenues of £1.17 million, with India and the Nordics being the main contributors to organic growth.  When audited financial statements are released in due course, the operating loss before tax is expected to show a significant improvement over FY 2017.

Operational Highlights

India

Following the launch of Omnimesh in June 2018, significant progress was made and revenue in India exceeded CyanConnode's 2018 India business plan forecast.  Orders to the value of $18.9 million for Omnimesh have been received from customers to date with approximately $4 million delivered against these orders in the period.

In Q4, CyanConnode's local manufacturing partner increased module production to 32,000 units per month.

Furthermore, Indian Utilities continue to issue large 'Requests for Proposals' and on 24 December 2018, the Indian Government announced that it had mandated the use of smart prepaid electricity meters.^[1] Consequently, CyanConnode has taken steps to ensure module production by its local manufacturing partner can be scaled up to meet accelerating demand.

China

On the 7 December 2018, CyanConnode announced its first Hardware Technology License Agreement.  The $4 million Agreement allows Beijing Jingybeifang Instrument Co. Ltd (Beijing Instruments) to manufacture CyanConnode's modules for integration into their smart meters and production is estimated to commence in H2 2019.

The Board are aware that expectations for 2018 included revenue from the license agreement to be recognised on an upfront basis, however after reviewing the matter the Directors consider it prudent for revenue to be recognised upon module production rather than a one-off sum so that revenue is in line with underlying activity.

^[1] https://economictimes.indiatimes.com/industry/energy/power/power-ministry-mandates-use-of-smart-prepaid-meters-april-2019-onwards/articleshow/67233334.cms

Nordics

During the period CyanConnode announced two orders from Nordic customers, including an order for perpetual software licenses and annual maintenance fees for an initial period of 10 years. A further order was also received from an existing customer for a smart metering deployment.

UKSMIP

CyanConnode has a contract to provide Toshiba with software licenses and support for Telefónica's SMETS2 Communications Hub. These Hubs are being installed in the Central and Southern regions and CyanConnode's technology is used where the cellular signal cannot reach the meter location (Not-Spots).

The roll-out of SMETS2 meters commenced in Q3 2018 and gained momentum during Q4. This momentum is expected to continue during 2019.

Rest of the World

The smart metering market in the Rest of the World continues to mature and during the year two new distribution agreements were signed for the Philippines, UAE and Bahrain.

Several markets in which CyanConnode has won contracts suffer from geopolitical risk and as a consequence contracts in Bangladesh, Iran and Ukraine have slowed.  CyanConnode is working closely with its partners and will continue to scrutinise the deliverability of the contracts in those jurisdictions.

Outlook

CyanConnode's 2019 business plan has been prudently built with the potential for material upgrades during the year.  CyanConnode expects 2019 revenue to be significantly higher than 2018.

John Cronin, CyanConnode Executive Chairman, commented:

"Meaningful progress has been made during 2018 and I anticipate further progress during 2019.  I would like to thank shareholders for their continued support including their further capital investment. I would also like to thank all our staff for their dedication and efforts during the year."

Enquiries:

CyanConnode Holdings plc	Tel: [phone]
John Cronin, Executive Chairman	www.cyanconnode.com
Arden Partners plc (Nomad and Broker)	Tel: [phone]
Paul Shackleton / Dan Gee-Summons (Corporate Finance) Simon Johnson (Corporate Broking)
Walbrook PR (Financial PR) Paul Cornelius / Nick Rome	Tel:  [phone] [e-mail]

About CyanConnode

CyanConnode is a world leader in Narrowband Radio Frequency (RF) Smart Mesh Networks that facilitate machine to machine (M2M) communication. CyanConnode's innovative network technology, which is self-forming and self-healing, uses the Licence Free Industrial, Scientific and Medical (ISM) Radio Band which is optimised to give exceptional performance and competitive total cost of ownership. Through global partnerships, CyanConnode provides customers with solutions for the rapid deployment of local or countrywide ISM RF Smart Mesh Networks that provide reliable and secure M2M communication.

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

 

 

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