News Details

TRADING UPDATE

SimiGon Ltd

("SimiGon" or the "Company")

Trading update

SimiGon Limited (LSE: SIM), a global leader in providing simulation training solutions, provides the following trading update in relation to the year ended 31 December 2019 (the "Period"). The Company expects to announce its final results for the Period in April 2020.

The Company expects, subject to audit adjustments, to report revenue of approximately $4.88 million (2018: $5.03 million) and net loss of approximately $1.46 million (2018: net loss of $1.01 million) for the Period.

As set out in the Company's interim results, the key contributor to the loss during the Period is the increase in cost of revenue (as compared to the previous year) mainly as a result of the purchase of hardware costing $0.77 million that was provided as part of SimiGon's programs with the U.S. Air Force and with the Israeli Air Force (F16 Maintenance Trainer and IAF F16 T6A). In addition, the Company has maintained its strategic decision during the Period and continued to invest in R&D and marketing in order to ensure that the Company is able to capitalize on the market opportunities available to it. The doubtful debt provision has decreased to $0.45 million in the Period as compared to year 2018.

The Company is still studying the two legal actions filed by D.D Goldstein Real Estates and Investment Ltd, advised of on 15 January 2020, and their impact, if any, on the expected financial results for the Period.

The Company's balance sheet remains solid with approximately $6 million of liquid cash and approximately $1.4 million of account receivables as at 31 December 2019 (of which approximately $0.65 million have subsequently been received).

During the Period, the Company achieved successful delivery milestones of its strategic contracts. This includes the completion of systems delivery milestones for a US$1.1 million contract announced in September 2018 with the Israeli Air Force (IAF); milestones delivery on the IAF F-16 Maintenance Trainer program; logistics support provided to the U.S. Air Force (USAF) for the Undergraduate RPA Training (URT) program; and additional work scope for the UK Military Flight Training System program.

Successful deliveries and advanced technologies have led SimiGon to be contracted for strategic programs throughout the Period, which has solidified SIMbox as a major training technology platform. This includes a $1.8 million contract from a large defence contractor to design, develop and implement a C-130 virtual maintenance training solution for the IAF Technician Training Academy; an additional year of software and hardware warranties and support services for the USAF URT program; and the multiple contracts awarded by a strategic European customer for licenses, maintenance and support services for the Customer's simulation training centers, including the adoption of SIMbox technology as the baseline for a new aircraft platform in its Academic Training Centers.

Ami Vizer, SimiGon's Chief Executive Officer and Executive Chairman, commented: “SimiGon continues to execute its strategy to deliver program milestones of long-term strategic contracts positioning itself in the market as a leading technology provider for VR and MR training solutions. The Company has invested in R&D, marketing and technology and has seen greater utilization of our SIMbox technology than in any other previous year.

SimiGon's ability to identify new markets and their need for cost effective training has been demonstrated during the Period with multiple SIMbox-based MR training systems contracts awarded to the Company by the USAF and other customers. This positions the Company to deliver improved financial performance over the long term."

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