TIDMDGB
RNS Number : 4051A
Digital Barriers plc
24 March 2017
24 March 2017
Digital Barriers plc
("Digital Barriers")
Trading Update
Digital Barriers plc (AIM: DGB, the "Group"), the specialist
provider of visually intelligent solutions to the global
surveillance, security and safety markets, provides an update on
trading for the current financial year ending 31 March 2017.
As the Group has previously communicated, momentum in our
business is strong and the contracts that constitute our new
business pipeline are increasingly high in value and large in
scope. Whilst the strength and superiority of Digital Barriers'
technology is allowing the Group to gain access to opportunities of
this scale, these increasingly large contracts present a
significant challenge in terms of the timing of their award and
delivery and, hence, revenue recognition relative to the Group's
financial period-ends.
The Group has focused over the last 12 months on trying to
address this challenge. However, although sales cycles have been
shortened, the Group is currently in the latter stages of securing
a number of material solutions sales and framework contracts, all
of which it had expected would be secured prior to 31 March. Whilst
the Group currently expects to secure all of these awards, it has
now become clear that some or all of them may now be secured in the
next financial year. If none of the awards are signed before the
end of March, there is expected to be a shortfall of approximately
GBP10m on revenue for the year ending 31 March 2017 compared to
current market forecasts.
The contracts in question include what would be the Group's
largest ever sales in to the USA, Asia and the Middle East in
addition to the Group's most material potential OEM contracts. In
aggregate, and at an absolute level, these contracts represent
revenue of approximately GBP14.5m, with recognition of that
revenue, once signed, spread over the coming and future financial
years.
At a detailed level, these contracts include:
-- A GBP4.3m (U$5.25m) contract in Asia Pacific, part of a
military platform surveillance programme leveraging the Group's
video technologies to provide an advanced capability. The contract
is currently in final negotiation ahead of award and most of this
revenue will now be delivered in the next financial year.
-- A GBP2.2m (U$2.75m) contract in the Middle East providing a
vehicle-based surveillance system for law enforcement. This
contract is currently in final negotiation ahead of award and is
now likely to be delivered next financial year, with significant
follow-on potential for a broader fleet deployment.
-- A GBP2.4m (U$3m) contract in Asia Pacific for our body worn
EdgeVis Mobile application, now in contract negotiation ahead of a
procurement award and likely to be delivered in full in the next
financial year.
-- A GBP5.6m (U$7m) contract award for Brimtek partner
technologies from a US federal agency, which will be for delivery
in full next financial year. This is now in procurement ahead of
contract award. This award will take Brimtek legacy contracted
revenues for delivery next financial year to around GBP12m
(U$15m).
In addition, we are close to concluding a number of framework
contracts which, whilst they do not have specific contract values,
would also have led to revenues in the current financial year and
are expected to lead to material revenues in future financial
periods. These include:
-- An OEM framework contract with a specialist provider of
communication services to the resources sector;
-- A framework contract with a major European transportation
organisation for the provision of asset protection and
transportation security technologies; and
-- A framework contract with a major European security services
provider for the provision of ThruVis technology.
-- Our first license sale for facial recognition as embedded
software in the mobility sector. This follows a benchmarking
exercise of our technology against others in the market and is
expected to lead to monthly revenues from next financial year. This
is now in the final stages of contract negotiation.
Whilst the quality of these contracts is of course encouraging,
the delay in their signature has an inevitable impact on the
Group's performance in the current financial year.
Commenting, Chairman Tom Black said:
"This is a disappointing outturn to the year - a year in which
we have achieved some very positive progress across our
technologies and in our international markets. We are securing
larger, more complex sales opportunities, but which carry much
longer sales cycles and make it difficult for us to determine the
timing of their closure. In light of this disappointment, I will
lead a review of our sales and engagement model to ensure that
meaningful and sustainable improvements can be made to this
critical aspect of how we do business."
For further information, please contact:
Digital Barriers plc Tel: 0203 553 5888
Zak Doffman, Chief
Executive Officer
Sharon Cooper, Chief
Financial Officer
Investec Investment Tel: 020 7597 5970
Banking
Andrew Pinder/ Dominic
Emery /
Patrick Robb
FTI Consulting Tel: 020 3727 1000
Edward Bridges/ Matt
Dixon/ Harry Staight
About Digital Barriers
Digital Barriers provides visually intelligent solutions to the
global surveillance, security and safety markets. We deliver
zero-latency streaming and analysis of secure video and related
intelligence over wireless networks, including cellular, satellite,
IP mesh and cloud, utilising significantly less bandwidth than
standard technologies. Our rapidly-installed fixed and mobile
solutions for covert, remote and wide-area deployments, as well as
vehicle and body-worn applications, have been sold into more than
fifty countries, and have been proven in some of the world's most
demanding operational environments. We also provide advanced video
content analysis and body scanning to identify safety concerns and
threats in real-time.
www.digitalbarriers.com
This information is provided by RNS
The company news service from the London Stock Exchange
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