AIM-listed security firm has secured 4 of 8 contracts pushed into FY17
Companies: Thruvision Group PLC
AIM-listed security firm Digital Barriers says it has secured a framework contract with one of the World's largest remote communications providers for its EdgeVis technology.
The contract has a minimum value of $750k this year, and $2.25m in each subsequent financial year, enhancing the firm's earnings visibility. It gives the unnamed company exclusive rights to sell DGB products into the Energy and Maritime sectors and follows the new licence model introduced last year.
The contract will see the firm deliver video services to customers in remote locations across the globe, and is one of the several contracts that were in final stages of negotiations that it discussed in its 24 March trading update.
Eight contracts were forecast to close by the end of the year in the last update, but none were secured by the end of the year. Four have since closed in April, and three of the final four are expected to close in H1.
DGB doesn't have a very impressive track record with the timing of rather lumpy contracts, and it has struggled with costs in the past. There is fragility in its financial position with its market value at a significant discount to its IPO price. Today's update sent shares up 2%, but the stock is quite illiquid.
The small cap firm also provided a trading update for the year to 31 March on Tuesday, reporting 46% growth in contracted revenue YoY to £31m and 26% reported revenue growth to £26.5m.
CEO Zak Doffman said the firm was making progress with its forward order book and was keenly aware of the importance of securing recurring revenue deals:
"... [so we] can we better manage and predict our financial performance on a period by period basis.
So for instance, this year we have already announced notable contracts with Careem, with G4S Europe and with one of our major US customers. The latest framework contract, announced today, significantly expands our sales reach across the energy and maritime sectors. Such frameworks are a key part of our strategy, and this month a similar framework agreement for ThruVis led to the first sale of the technology into the mainland China mass transportation market, part of a significant ongoing procurement programme.
The current financial year has begun as we would have hoped and we have signed many of the contracts deferred from the year ended 31 March 2017 early in the current period."
