CyanConnode full-year revenues up 400 per cent
Cambridge tech company CyanConnode expects FY 2018 revenues to be approximately £4.7 million – up 400 per cent on FY 2017 revenues of £1.17 million – with India and the Nordics being the main contributors to organic growth.
The audited operating loss before tax is expected to show a significant improvement over FY 2017. The AIM-quoted company specialises in Narrowband Radio Frequency (RF) Smart Mesh Networks.
Following the launch of its Omnimesh technology last June, significant progress was made and revenue in India exceeded CyanConnode’s forecast.
Orders to the value of $18.9m for Omnimesh have been received from customers to date with approximately $4m delivered against these orders in the period.
In Q4, CyanConnode’s local manufacturing partner increased module production to 32,000 units per month. Indian utilities continue to issue large ‘Requests for Proposals’ and in December the Indian Government announced that it had mandated the use of smart prepaid electricity meters.
CyanConnode has triggered steps to ensure module production by its local manufacturing partner can be scaled to meet accelerating demand.
China is another promising market. In December, CyanConnode announced its first Hardware Technology License Agreement. The $4m deal allows Beijing Jingybeifang Instrument Co. Ltd (Beijing Instruments) to manufacture CyanConnode’s modules for integration into its smart meters and production is estimated to start in H2 2019.
During the period CyanConnode announced two orders from Nordic customers, including an order for perpetual software licenses and annual maintenance fees for an initial period of 10 years. A further order was also received from an existing customer for a smart metering deployment.
Elsewhere CyanConnode has a contract to provide Toshiba with software licences and support for Telefónica’s SMETS2 Communications Hub. CyanConnode’s technology is used where the cellular signal cannot reach the meter location – known as ‘Not-Spots’. The roll-out of SMETS2 meters commenced in Q3 2018 and gained momentum during Q4. This momentum is expected to continue during 2019.
The smart metering market in the Rest of the World continues to mature and during the year two new distribution agreements were signed for the Philippines, UAE and Bahrain.
Several markets in which CyanConnode has won contracts suffer from geopolitical risk and as a consequence contracts in Bangladesh, Iran and Ukraine have slowed.
CyanConnode says it is working closely with its partners and will continue to scrutinise the deliverability of the contracts in those jurisdictions. CyanConnode expects 2019 revenue to be significantly higher than 2018. Executive chairman John Cronin said: “Meaningful progress has been made during 2018 and I anticipate further progress during 2019.”