CyanConnode revenues to be below forecasts

CyanConnode has warned that revenues for the year ended 31 Dec will be significantly below market expectations.

The group said it continued its positive momentum with orders from a range of customers across different jurisdictions in 2017 but deployment for one of its larger contracts had been delayed, due to circumstances outside the company's control.

It said deployment was now expected in the first half of 2018.

The group said: '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 Dec 2017 will be significantly below market expectations at £1.2m.'

It said that despite the investment in the hardware and services for this contract, the company ended the year with more than £5.5m of net cash, with further inflows of in excess of £1.3m 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.

Looking ahead it said: '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.'

Executive chairman John Cronin said: '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.'