Simigon Share Discussion Threads

[rivaldo] 07/9/2015 11:30

Cheers GHF, lots of upside to Finncap's 45p target.

There's evidently still a stock overhang. It's been around for so long that it must be nearly finished by now.

[cockerhoop] 07/9/2015 08:44

GHF,

Most RR policies I would consider conservative don't include significant deferred revenues (although it appears it's been reduced by £380,000 in the period which partly explains the fall in booked revenue).

[cockerhoop] 07/9/2015 08:31

I accept that R&D can be fairly discretionary but there has been a general deep cutting of costs across the board though BB and no mention of redundancies (or associated costs).

Regards revenue recognition have there been any changes to policy or are they saying that the current policy does not accurately reflect the underlying (buoyant?) state of the business.

[glasshalfull] 07/9/2015 08:26

As rivaldo say, great asset backing here. Fall in H1 revenue is not indicative of any issues but rather a conservative revenue recognition policy.

Shares appear v inexpensive on an EV of c.£5m

Per finnCap,

"In H1, the company delivered strong 17% YoY growth in adj. PBT despite reporting revenue down 18% on last year. This was due to improved gross margins and sharply reduced overheads, notably R&D costs.

The fall in H1 revenue is due principally to the revenue-recognition policy on its long-term contracts. This will see more of the revenue and costs loaded into H2 this year. The company expects to meet our FY 2015 earnings growth expectations of $1.5m (up 5% YoY); we are slightly easing FY forecast sales from $8.9m to $8.7m (v $8.3m LY) but with the higher margins leaving no impact on expected earnings.

Net cash dropped from $9.4m at the December Y/E to $7.9m in June due to the dividend payment and a rise in outstanding trade debtors due in H2. As usual, there have been several new contract wins in the half and the company remains in a good position to secure the additional phases of the big prime training contract initially secured in June 2013.

It has also extended its civil (as opposed to usual military) aviation business from China to Latin America. Overall the outlook remains solid, secured by LT contracts with blue-chip national defence departments, and the board is confident of achieving the expected FY earnings growth.

We reiterate our 45p target price."


Regards,
GHF

[cockerhoop] 07/9/2015 08:00

Results don't feel quite right to me Revs down 21% but they've improved profitability by slashing R&D, Sales & Marketing and General Admin costs.

Hardly investing for future growth.

[rivaldo] 07/9/2015 07:46

Good results this morning, with $0.02 EPS in H1, up from last year despite revenue recognition leading to lower revenues.

The outlook statement is nicely positive.

SIM has $8.7m of net current assets - essentially cash and receivables - against the £9m m/cap, with $0.8m net income in H1 alone.

[yump] 06/9/2015 11:17

Yes TCM is a good one. I looked a few times but it always seemed to be on a p/e of 20 ish on the following year's forecast so I chickened out. I underestimated the niche/quality of the business, which is presumably why the rating persisted. Seems to have taken off in May, presumably broker note + various bits of important news did the trick.

[paleje] 05/9/2015 15:31

Try TCM, Yump, they're Israeli run, rather well too, IoT and very substantial growth ahead, shareholders have done well but plenty still to come. Have to agree nothing wrong with being cynical I tend towards it myself but as well as protecting us it sometimes it holds us back too. GL for next week anyway.

[yump] 04/9/2015 23:59

Dmatek held onto their cash for ages as did Pilat Media.

I have a small holding here, but quite honestly I don't know why. No Israeli company seems to have delivered anything significant for UK shareholders.

Lots of enthusiasm for XL Media (another one ) on the boards, but being gambling related I think that is nothing to do with tbe business and is generally fickle investment which will die very quickly when things go not-quite-as-well-as-we-thought, which I think is inevitable.

Cynical yes. Avoided big losses as a result in the past, yes. If there's a pattern then it could be coincidence, but why take the chance ?

I bought a few around 22p thinking it had bottomed, which is silly, as its the company and its origins that imo will dictate whether I eventually get a profit.

[gnnmartin] 04/9/2015 23:31

Ah, yes the annual reports are there. I wonder if I just failed to find them. My apologies to Simigion. Still, my other points stand.

[battlebus2] 04/9/2015 17:22

Typical of Isreali co's that they hold onto their cash. Can't see anything but progress in Monday's results. GLAH.

[paleje] 04/9/2015 16:54

Cheers gentlemen, fair points and taken on board. Annual reports seem to be there now though, can see it was a dodgy start but the last 4 years have shown consistent profit increases (although revenue stalled, not sure why) and their clients are quality, they don't overpay themselves well a matter of opinion, the divi is well covered and they have a lot of cash. They seem to be prudent even overly so, I don't understand the need for holding all that cash, they've clung on to cash for years, if they're not going to use it why not make shareholders happy.
Anyway I bought a few so we'll see what Monday brings. Anyone ever emailed or phoned them, do they respond? Think I might next week after the numbers, want to know about that cash!:)

[yump] 04/9/2015 16:20

Its not been 'chosen' for promotion (ramping) (yet).

That seems to be the main difference from other companies incorporated elsewhere, listed here, registered somewhere else and taxed on some island in the middle of nowhere.

Some probably only list for credibility in their product sales meetings, especially if they are for large contracts.

The ones that have early investors wanting to get out and the ones that want more money, normally embark on a regular pitch to investors and frequent announcements about nothing very significant.

[gnnmartin] 04/9/2015 15:53

Lots of reasons for the rating, paleje. Incorporated in Israel (I assume) under Israeli law, listed in the UK, registrar in Guernsey, AGM held in the USA. No record of current or past annual reports on the web site. No notice of impending AGM (button so marked on the web site does not lead to the information). Plus an initially very disappointing performance (listed at 90p, and after a brief rise to 110p fell to 5p and stayed sub 10p for 4 years. No information (eg past annual reports) on the web site to enable one to understand the history.

Given that, the rating is arguably about right. I hold a few and am tempted to buy more, but the trouble is with a company like this one just has to take them on trust, and so when the share price sinks, the fear is that it is sinking for good reason.

Interims next week might help.

[paleje] 04/9/2015 12:04

Am I mis-reading something here, round terms 7m cash, 8m m/cap, 1m PBT forecast and a divi being paid.

Slow growth but very visible. Whats the catch. What chance of a special divi, they don't seem to need all that cash.

[5oletrader] 25/8/2015 09:00

I thought this made interesting reading:

Aviation in China is on the radar as the government introduces several measures aimed at developing its nascent market. Industry observers now estimate that it will see an annual increase of 7.9 percent over the next 20 years, trailing India as the world’s fastest-growing market. The Asia-Pacific region including China and India could account for up to 31 percent of global demand by 2030.

Emerging markets, in particular China, have kept aircraft manufacturers airborne through a bout of weak demand from Western carriers. Chinese airlines accounted for 20 percent of global aircraft deliveries in 2010, and China’s civil aviation authorities estimate that by 2012 the country will need 2,100 aircrafts, nearly half of those for general aviation. It is also estimated that, for every dollar spent on an aircraft, $6 is spent on supporting sectors, leading to the burgeoning growth of the overall industry.

Toby Palham, Senior Manager for Aviation at Allianz Global Corporate & Specialty Asia Pacific, is welcoming this liberalization and the growth opportunities it presents. However, he sees it as a first step in a long journey toward freeing up the country’s airspace. He believes the main challenges in China are restrictions on landing approvals and various regulations such as fly-over approvals, airport access, restricted routes and parking limitations. However, awareness of these issues has risen considerably, and the move to change things is encouraging.

From a risk perspective, Palham says the key difficulty is obtaining quality data on risk profiles, pilots and aircraft. “It is a new industry in China, and there is still a learning process for our local partners in China to acquire the required expertise and aviation capabilities,” he said.

A real growth bottleneck has been low technical expertise and professional training for pilots, instructors, sales, support, financing and insurance. Palham estimates that at least 10,000 professionals are needed to fill the gap. “The healthy and sustainable development of China’s aviation industry requires a complete set of auxiliary projects and support industries,” he added.
Tony Palham: Senior Manager for Aviation at Allianz Global Corporate & Specialty Asia Pacific

Opening the skies
The Chinese government showed its commitment to the market earlier this year, announcing in its five-year plan for 2011–2015 that it would promote general aviation, reform airspace management and make the allocation and utilization of airspace more efficient. Authorities agreed to low-altitude flights over Hainan on a trial basis, and similar trials should start later this year near Changchun, Guangzhou and Shenyang.

Palham notes that China also needs to draw up a set of management policies and industry standards, and to implement supervision on operations, safety procedures and risk management systems.

Long-term partner
China’s aviation insurance market remains domestically controlled, with local insurance giants taking the lion’s share of business with their large risk appetites. “From an underwriting perspective, we are adopting a measured approach and closely observing developments in the industry, but we are committed to being a long-term partner working alongside our clients through the liberalization of the sector.”

“We run several international insurance programs in aviation, and Allianz can assist major clients through this platform. We are constantly identifying ways we can help clients do business in China. The AGCS philosophy is to provide exemplary service that is centrally coordinated but locally deployed,” he said.

[battlebus2] 24/8/2015 08:40

Some ridiculous prices around this morning, anyone selling at 16p must be desperate or mad......

[rivaldo] 17/8/2015 08:31

RNS just out - the interims will be out on Monday 7th September.

That's a week earlier than last year - excellent. And a Monday morning suggests positive tidings too.

They say that good news gets delivered more quickly.....hopefully we'll get a nice run-up before that date:

[rivaldo] 13/8/2015 14:53

Yep, last year's interims were 15th September. Not long to wait, and I'm hopeful they'll be good considering the CEO was able to say this 3 1/2 months into H1.....

"SimiGon has excellent revenue visibility based on our long term contracts and a strong order book in place. As a result the board enters 2015 with increased confidence in delivering continued year-on-year growth and viewing the future with confidence as demonstrated by the Company's continued annual dividend distribution."

[battlebus2] 12/8/2015 22:34

Looking forward results should be only a few weeks away now

[rivaldo] 12/8/2015 07:51

More good news.

SIM looks extremely cheap given forecasts of 2.05p EPS - with a 0.48p dividend - and over £6m net cash against a £10.3m m/cap.

[morkandmindy] 12/8/2015 07:25

Going the right way :)

[playful] 12/8/2015 07:24

Sounds very positive and SIMbox is beginning to prove itself so let's hope to see further adoption of their technology.