DGB secures $8m contract in its "most important" strategic market, the U.S.
Companies: Thruvision Group PLC
Shares in AIM-listed security specialist Digital Barriers jumped 10% on Thursday after the firm told investors it had won a $7.2m contract with a major US federal law enforcement agency.
Today's news was undoubtedly welcomed by investors, following a period of uncertainty at the Group. At its latest Trading Update on 24 March, the firm announced a delay to a raft of contracts pushing around £10m of revenue that was expected to be booked before the end March 2017, into the following year.
The firm, which was established in 2009 by some of the team behind Detica Group, now a division of BAE Systems, produces covert and remote video recording and streaming products for the surveillance, security and safety markets.
Today's deal is one of several that were in the final stages of procurement when the Group gave its trading update on 24 March.
The contract is with an existing customer, and the agreement will see DGB supply specialist surveillance equipment from one of its strategic partners, which this agency uses alongside its installed base of Digital Barriers technology.
This contract award follows several smaller awards with US government customers in April, which are valued at $0.8 million. These, DGB says, should be delivered in full in the current financial year.
Zak Doffman, CEO of Digital Barriers, said:
"The US remains our most important strategic market, and this latest set of contract awards shows that we continue to make good progress, albeit with the challenge of the actual timing of the awards. We now have a very strong contracted backlog position for the current financial year, with approximately £15 million already secured. We continue to focus all of our efforts on the pace and tempo of further sales closures."
Consensus expectations were for breakeven to occur by 2019 for DGB, but this may have slipped after recent contract delays and issues. If the flow of contract wins does accelerate, however, the earnings will be highly leveraged on the upside.