Indian bummer puts CyanConnode in a fine mesh!
Stockholders are growing increasingly sceptical about prospects for Cambridge-based CyanConnode as the share price was blitzed once more by fresh delays in the award of much-trumpeted global contracts worth multimillions.
The share price was already bumping along the bottom before the latest torpedoes hit from East and West – notably India, Bangladesh and the Ukraine.
As they issued a gloomy trading update, directors said they were satisfied that the business had sufficient cash resources to execute on its strategy. Posts on the London Stock Exchange share chat site in the wake of the update varied between the incredulous to the downright gloomy.
AIM-quoted CyanConnode markets itself as a world leader in Narrowband Radio Frequency (RF) Smart Mesh Networks that enable Omni Internet of Things communications.
The company said its current order book – excluding the delayed – NIK LLC contracts), was now £40 million. Despite reassurances from executive chairman John Cronin and the board, shareholders remain worried about cash burn and the fact that so many contracts are being bigged up and not converting into stone hard currency.
In September, CyanConnode said it expected to secure substantial Indian contracts by the end of October following delays in new tenders being awarded caused by the Indian General Election.
Now it says the award of these contracts continues to take longer than anticipated and adds: “while they are still expected to be secured in the coming weeks, the company is now unlikely to meet market expectations for 2019.”
A review of its order book is now said to have thrown up a second complication: In 2017, orders worth $48 million received from NIK LLC were announced for territories including Bangladesh and Ukraine, with deployments expected to be over a three-year period.
That deal seems to be disappearing into the distance. The trading update said: “Whilst the company is still in dialogue with NIK LLC regarding a rollout of these orders, the board does not believe revenue will be received from those orders in the near term.”