suki the dog
05 Jul 2017
Re: RNS : completion of $6.7m contract bought in on the news also market cap nearly taken up with cash very positiv
gretel
05 Jul 2017
RNS : completion of $6.7m contract Excellent news this morning - great to see SIM finally completing this major $6.7m contract without any residual issues:Extracts:"SimiGon (LSE: SIM), a global leader in providing simulation training solutions, is pleased to announce that it has successfully completed all systems delivery milestones and received the requisite client confirmations in relation to the $6.7 million contract announced on 24 June 2013 (the "Programme"
.""SimiGon President & CEO, Ami Vizer, said: "We are pleased to announce the successful completion of all systems delivery milestones. The experience and know-how obtained during the delivery of this Programme will be leveraged to further new business opportunities for SimiGon and our partners within the SIMbox ecosystem. We are proud to be part of this major Programme as a prime contractor, marking a significant milestone in SimiGon's strategic aim to lead more opportunities as prime. We are looking forward to extending this solution and concept to meet other training needs worldwide."
gretel
03 May 2017
Intriguing buying going on Two buys totalling 228,000 shares in the last two days.
Gladremeer
25 Apr 2017
Re: Finncap see 130% share price upside Reputation? They said 45p in 2015. Then 45p in 2016. Now 45p in 2017. What reputation? The spread is enormous. There is a reason for this.
gretel
21 Apr 2017
Re: Finncap see 130% share price upside Nice - up 10% today to 21.5p.Investing is about the future, not the past. Finncap's 45p per share valuation of SIM is perfectly justifiable given that the cash pile plus receivables almost covers the entire m/cap, leaving the core business valued at....well, nothing.Finncap are SIM's NOMAD and broker, so pretty obviously they are paid by SIM! Which doesn't mean that Finncap (who are one of the most respected small cap researchers) would put out stupid numbers as they have a reputation to uphold.SIM haven't performed in profitability terms in the recent past due to problems with a contract and transition to a SaaS revenue model. The latter in fact makes SIM's future prospects that much more stable.If they are over these temporary issues - as the results narrative suggests - then perhaps we will see 45p this year.
Gladremeer
20 Apr 2017
Re: Finncap see 130% share price upside Just for a bit of balance, Finncap said the same thing 2 years ago. Price has dropped 30% since.My understanding is Finncap are paid by Simigon to promote their shares
gretel
18 Apr 2017
Finncap see 130% share price upside FYI from Finncap's note last week - they say Buy with a 45p target.They go for 3.1c EPS this year, rising to 3.3c EPS next year, with a 0.7c dividend each year:"Clearer skies aheadThe FY 2016 results are in linewith expectations which were downgraded inFebruary. Affected by delays to a large Israeli Air Force contract which couldnot be recognised in the period, revenue was down 13% YoY to $6.0m. With the high gearing in the business model, this meant earnings fell 80% YoY to $0.4m.More positively, cash owed at the end of 2015 was received in the yearto deliver $1.0m of FCF, and after the $0.3m dividend distribution, this liftednet cash from $7.4m to $8.1m at the year end. This year¡¦s declared dividendis lower ($0.1m or 19% of earnings); however, there will be a $0.2m sharebuyback to make up the distribution to shareholders to previous levels.Away from the revenue recognition issue, underlying business remains profitableand performing well, in terms of new business wins and pipeline, as well asbuilding a base of recurring revenue.ƒ¤Organic growth strategy is focused on winning new strategic customers, and growing engagement within the existing base. SimiGon is delivering on all major contracts and increasing its market visibility while seeking new opportunities as both a prime contractor and strategic partner.ƒ¤New markets: Progress is being made in both civil-aviation and industry, and although mass-market adoption is at an early stage, the company is ideally positioned to gain traction in it, given its blue-chip client base, strong IP and wealth of experience with the technology.ƒ¤The large $6.7m prime contract won in 2013 continued during 2016 although on a slowed by supplementary client requests outside of the original contract. The company has been meeting these demands with a view to follow-on work and the contract is finally due for completion in H1 2017 and we anticipate news on any subsequent opportunities thereafter."
gretel
17 Apr 2017
Notes on a company presentation Terrific post elsewhere by Daz over this holiday weekend. I hadn't appreciated the extent of the powerful transition to the SaaS model which has already taken place, and which I'm glad to see.Here's his post:"I attended a company presentation yesterday and found it very useful, here's a summary. Hopefully it will be of interest.•The company is transitioning to a Software as a service (Saas) model, with 57% of revenues now coming from this source and which will increase further as a percentage this year. The order book stands at $23m, spread over a number of years and this provides substantial visibility of revenues both for this year and guarantees they will be profitable this year.•Simulated learning is likely to grow significantly over the next 5 years as the Y and Z generation enter employment and it becomes more and more the norm, so the market opportunity for Simigon in the medium term is substantial. Learning by doing is also the most effective way to learn.•Although the company has traditionally focused on military aviation, where there is a need to train pilots before they actually fly an aircraft, there are also other industries like oil and gas and crane operation where training for critical scenarios is vital and so there are many opportunities and they are working with resellers to expand these markets as being a small company, they don’t have the capability to do it themselves.•The account receivables of $2.9m is due to the a number of factors :- the transition to the Saas model and the large contracts, a substantial amount of this has been collected since the year end. Cash flow was similarly affected and there should be an inflow this year.•I came away thinking that given most of the market cap is covered by cash, there is a substantial opportunity here. Yes, the large contracts are going to be lumpy and unpredictable but the forecasts are conservative and don’t make allowance for any wins over the next few years.Given also that they have a substantial order book and a high level of visible recurring revenues, there is also not much risk and so you can play the long game and if they do gain the expected traction in new markets, then the price ought to substantially higher in a few years time."
coldascheese
13 Apr 2017
Cash & receivables £8.87m-m/cap £9.7m-buy Yes Cash & receivables £8.87m-m/cap £9.7m and doing a share buy back.Profit lower for reporting period due to delays but this should catch up in current year.Really this share is nearly all cash, I expect someone who could use the cash would be sorely tempted to make an opportunistic bid or the company to make better use of it before too long. even as it is
gretel
13 Apr 2017
Results out and in line Results are out and are bang in line with reduced forecasts:[link] £9.7m m/cap at 19p (51.4m shares) plays $8.14m of cash and $2.92m receivables too - of which I note over $1m has been collected since the year end.SIM must prove that the forecasts for this year (2017) of 3.1c EPS are realistic, say in the H1 trading update or results - unless there's contract news in the meantime.The outlook statement continues to emphasise the lower short term revenues from the high value long term license contracts, so caution regarding those forecasts may be appropriate.Nevertheless, there are a number of reasons to be rather positive about SIM's future in the narrative, and it still looks a very interesting company to me. I'm happy to hold for the medium/long-term with hopefully the capacity for upside surprises/contract news flow.I note that the share price is recovering nicely now, after an initial markdown by the MMs on numbers which the market knew about already.The lack of available shares means that any decent news will be well rewarded, especially given the cash backing in the Balance Sheet. As regards the potential $200k buyback, aound 66% of the shares are held by the top 7 shareholders. That leaves only around £2.9m of shares in free float. And it's usually only possible to buy 20k-30k of shares at a time at most.So $200k is more than enough. If SIM actually succeed in buying back $200k of shares they will probably drive the price up very nicely indeed! Either that, or they'll find one or two larger holders to buy out completely and thereby reduce any overhang.
OTCbuyer
23 Feb 2017
Re: SIM still looks cheap imo Hi Gladremeer,I agree with you on paid-for research in that I don't think price targets should be paid any attention to. That said they do still have a place, I think of them as akin to slightly more detailed investor presentation and can be useful for learning some background on the company - the key is just to ignore the target share price and projected financials and do your own work.On Simigon and the investment case, I should begin by noting that I bought some shares earlier this year, for full disclosure.I think there are issues in this business - the concentrated customer base (6 clients account for > 90% revenues), the lumpy nature of new business, the terrible IR - indeed I think there's a decent argument the CFO in particular should be replaced as he comes across as somewhat disorganised in coversation, the overseas domicility and operations.However, there are a few things I find hard to square is your comment: "Simigon will continue plodding along making a meagre profit".This is a business with gross margins > 75% and nearer 80% and EBITDA margins of 25%. The return on capital is off the charts and is only brough down into the 20% range due to the sizeable cash balance the company has.It also has a remarkably variable cost base that most management teams would kill for - personnel are the biggest cost and are hired on a project / contract basis, so that the costs are well matched to revenues. This means that in 2015 a 17% decline in top line still delivered 25% EBITDA margins and even in a terrible year like 2016 (30% down from 2014), they still delivered 6% EBITDA margins. It's worth noting that cash flow will be >> profits in 2016 as there is a big working capital unwind taking place.I suspect that with full year reporting there's a good chance we'll discover some exceptionals around their first prime contract that dragged down profitability. But that prime contract, from my understanding, was a $6m contract to install training systems for two squadrons for an air force. There are multiple further phases of work (I think up to $100m ultimateley) for this to be rolled out to other squadrons and Simigon will be in a position to essentially copy/paste the work in future, thus likely setting up sizeable strong margins in future with relatively low execution risk (since everything has been hammered out on the first deal).In the more immediate future, 2017 should see $1m in locked-in incremental revenue from the Israeli air force (a $2m/18 month deal) and $1.5m pa from a new Far East operator on a 5 year deal - so even assuming a 20% decline in ongoing business (aggressive considering many are multi-year deals) of $1.2m, you will see $2.5m of revenue added against that - getting you to a range of $7-8m for 2017 revenues on my expecations. Assuming a 20% EBITDA margin gets you to $1.4m.Let's not forget that capex is very low and there are around $6m of R&D credits and tax losses to shield profits for the foreseeable future. In other words you are probably looking at 2017 net income >> $1m for a business with an Enterprise value of around $6m.Being based in Israel and with main operations in the US does not help, it probably should be listed on the US OTC market. But after Silicon Valley, the best place to have a tech company on the planet is probably Israel. It has an enormous pool of talented software and hardware engineers - some of my best investments are Israeli tech companies, such as Radcom and Amdocs. This is one of the great things about a company like Simigon and its variable cost base - the quick access to a deep talent pool is quite the competitive advantage versus being based in the UK."whilst the sp drifts around the same mark as today and every so often will drop 10 - 20% when things go wrong"Perhaps - but buying a high margin, high RoC cash generative business that should deliver double digit revenue growth, on a forward EV/EBITDA of around 4x seems like
Gladremeer
22 Feb 2017
Re: SIM still looks cheap imo You could very well be right.On the other hand your money might sit here & rot for a few more years so its not for me.Good luck though. Hope it works out well.
gretel
21 Feb 2017
Re: SIM still looks cheap imo I completely disagree. SIM has a very good case to make up a part of one's portfolio.This is at the least because the £10m m/cap is almost entirely covered by the $8m+ cash pile and receivables/other assets. SIM therefore has extremely unusual defensive qualities.Any single contract win could send the share price up 20% on its own given SIM's tiny m/cap and limited free float.If SIM can indeed earn 3c EPS in 2017 as per forecasts, then a 45p share price would indeed be on the cards given the huge asset backing. So the downside is in theory limited to only 10%-15%, whilst the upside could be 100% and possibly more.SIM have proven their abilities a number of times with a series of large contract wins in punching above their weight. The Israeli contract difficulties appear to me to be a one-off, which hopefully they'll learn from. There may still be a decent outcome from it, judging by the CEO's comments.And around £60,000 of shares traded today already - not bad for a microcap.
Gladremeer
20 Feb 2017
Re: SIM still looks cheap imo Hi GretelJust for a bit of balance, Finncap gave a target of 45p in February 2015 - 2 years ago. Since then the price has dropped almost 30%! Also bear in mind that Simigon are a client of Finncap so hardly surprising to see them continually recommending them as an investment (the FSA should really stop this crooked nonsense going on day after day).Although this seems to be a well run company, there are LOTS of other places to invest for far better returns.Simigon will continue plodding along making a meagre profit with meagre dividends each year whilst the sp drifts around the same mark as today and every so often will drop 10 - 20% when things go wrong (which we all know they will).Volume is so low and the spread so large this share is not really doing anything at all and there's a very good chance that will continue for another 2 years.Only my opinion of course. DYOR.
gretel
20 Feb 2017
SIM still looks cheap imo Back from hols, so pleasing to see the share price has performed extremely well given the disappointing contract delay and additional costs.SIM are a microcap who've won extremely large (for their size) government contracts. We all know what can go wrong with such contracts. so delays and spec changes are hardly a surprise, but to a company of SIM's size the effects are highly material.The saving grace from a shareholder POV is of course the cash pile of more than $8m, plus other assets, which nicely supports the current £10m m/cap.Even with this setback SIM will still be profitable for last year with "at least" $0.3m PBT.Finncap have retained their 45p target price.For this year Finncap now forecast 3c EPS, i.e 2.4p EPS, based on $1.6m PBT. Given the contract revenues now deferred into 2017 this looks highly achievable.There will also be 0.7c dividends each year.It's also good to see the intended share buyback programme. The timing of this will be interesting - I don't think SIM currently have permission for such buybacks, so they'd have to wait until the next AGM or hold an EGM to introduce it.
