News Details

TRADING UPDATE

SimiGon Ltd

("SimiGon" or the “Company")

Trading update

SimiGon Limited (“SimiGon” or “the Company”), a global leader in providing simulation training solutions, announces an update on trading for the year ended 31 December 2018 (the “Period”) ahead of announcing its final results for the Period.

The Company expects, subject to audit, to report revenue of approximately $5 million (2017: $4.34 million), representing an increase of approximately 15 per cent., and an adjusted net loss of approximately $0.74 million (2017: adj. net loss $0.89 million) for the Period.

As set out in the Company’s interim results, the key contributor to the loss during the Period is the recording of a doubtful debt provision of $0.45 million related to a delay in payment from a particular customer in the civilian training market.

During the Period, the Company achieved successful delivery milestones of its strategic contracts. This includes milestones on the Israeli Air Force (IAF) F-16 Maintenance Trainer program, logistics support provided to the U.S. Air Force (USAF) under their T-6A program and additional work scope for the UK Military Flight Training System program.

Successful deliveries and advanced proven technology has led SimiGon to be contracted with strategic programs throughout the Period which has solidified SIMbox as the major training technology platform. This includes the contract signed with the IAF to provide them with T-6A training devices utilizing advanced Virtual Reality (VR) capabilities to support advanced training needs, and the contract award from its key European customer for SIMbox Commercial off-the-shelf training and simulation development platform.

In addition, SimiGon’s ability to identify new markets and their requirements for cost effective personal training systems was further demonstrated during the Period when the Company was contracted to deliver a VR Aircraft De-icing Simulators to the USAF.

SimiGon President & CEO, Ami Vizer, commented: “It has been a successful year for the Company, underpinned by an expected 15 per cent. growth in revenue compared to last year, with strong system deliveries and contracts in multiple new domains, all while sustaining and growing our existing partner base.

Over the past 24 months, the Company’s strategic focus has been on three main areas:

  1. Sustain the baseline - Continue to successfully deliver Distributed Learning Solutions to our core strategic partners worldwide. SimiGon, directly and through its partners, now has training sites in North America, Europe, Middle East and in the Asia Pacific markets.

  2. Expand market reach - Expand the utilization of our SIMbox technology to multiple domains. This was successfully achieved by targeting several high opportunity markets such as maintenance training, commercial equipment operators training and research labs that utilize SIMbox as part of their research.

  3. Strengthen our technology - Improve the technological capabilities of the SIMbox technology in order to enable the growth of the Company as detailed above. Beyond the expansion of our graphics engine, simulation and learning management system, we have added and delivered Virtual Reality solutions to multiple clients around the globe.

SimiGon has entered 2019 with more clients, more partners, stronger technology and much broader utilization of our SIMbox technology in multiple domains compared to any other year in our history. All of which serves as a strong baseline for further growth and management expect this to improve revenue and profitability in 2019. While 2018 was one of our strongest product delivery years, the on-going transition to a Software as a Service (SaaS) model resulted in the expected drag on our financial performance as licence revenue is now spread over 5-12 years. The impact of this migration to a SaaS model can be demonstrated by the fact that licence revenue is reduced by 85% (with the requisite impact on short term financial performance) while our recurring revenue streams are now much stronger which will improve the long-term financial performance of the Company.

Our unique SIMbox technology, existing client baseline and market reach led us to implementing several strategic relationships with large integrators that need to supplement their existing product line with our technology. These strategic relationships are progressing well, with most of them already implementing and delivering solutions that incorporate SIMbox.

I am very proud of the team we have and of the transformation SimiGon has made in the past couple of years. We were able to successfully adapt to changing market trends and maintain our position as a global leader in the training and simulation industry. I believe that our strong technology, diverse global partner base, strong product installation base and growing market demand will translate to improved financial results in 2019 and beyond”.

View complete announcement on London Stock Exchange Website