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Alliance News Detail


SimiGon Revenue Lower But Interim Profit Up On Margin Boost

[ 19 Sep 2016 08:34 ]

LONDON (Alliance News) - SimiGon Ltd on Monday posted growth in pretax profit for the first half of 2016 despite a decline in revenue, thanks to an improvement in gross margin as the company won higher-value contracts.

Thanks to higher margin contracts on its books, SimiGon's gross margin improved to 78% from 75% a year prior in the first half. Complemented by a decline in operating costs, this meant pretax profit for the first grew to USD810,000 in the half to the end of June, compared to USD790,000 a year before.

SimiGon, which provides modelling, simulation and training services to the defence and aerospace industries, said revenue fell to USD3.3 million from USD3.5 million the year before.

The company has been focusing on shifting to high-value, long-term contracts and will continue to do so during the balance of 2016. This is likely to depress the initial revenue booked from these contracts, it said, but SimiGon anticipates this strategy will boost profitability and visibility of revenue going forward.

In the first half, the firm won a USD7.9 million contract to deliver its SIMbox training services to an unnamed Asian civilian aviation training services provider and received a notice of forthcoming USD2.0 million contract from the Israeli Air Force to provide maintenance trainers for F-16 fighter jets.

"Looking ahead, SimiGon will continue to leverage its position in the market and its global footprint to build new partnerships, expand its customer base, and target large contracts. The company is continuing its transition into high-value, long-term licence contracts in order to meet market requirements," said Chief Executive Ami Vizer.

"Having unique distributed training systems and proven technology applicable for multiple domains and devices together with a business model that allows creating partnerships and relationships with blue chip corporations, the board enters the second half of 2016 with expectations to deliver growth over the long term," Vizer added.

SimiGon shares were down 7.0% at 20.00 pence on Monday morning.

By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

Copyright 2016 Alliance News Limited. All Rights Reserved.


SimiGon Revenue Lower But Interim Profit Up On Margin Boost - Alliance News

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