Simigon Share Discussion Threads

[unclesamgw] 31/7/2019 15:13

What seems incredible is that the shareholders & Board haven't done anything yet in terms of getting a new CEO

[cockerhoop] 31/7/2019 14:45

No apology needed ;-)

[cockerhoop] 31/7/2019 14:13

I don't think it has masses of potential. I think it's a scheme to transfer the company assets to Ami Vizer.

Looks like Via Air has gone bust as all services suspended - maybe Ami will have more time for SIM now :-)

[cockerhoop] 31/7/2019 13:27

What on earth makes you think the woeful underperformance of the past 12 years under the same CEO is going to be magically transformed?

He's excessively paid, has issued nearly 20% of the company to himself during the years of abject progress. Gets paid for his holidays yet staff never see him!!

No real evolution of product since float, failed miserably whenever taking on the prime contractor roll (delays, retentions etc, etc)

Lifestyle business for Ami.

[rivaldo] 31/7/2019 13:13

Of course the CEO's salary is large, and undeserved given the under performance.

But at the end of the day (cliche alert) the potential remains huge here. Some credit must be given for the way this micro cap retains and increases business with a bluer than blue chip client base, and in these days of VR/AR, airline growth etc the potential is obvious.

If SIM can pull off the transition to SaaS with high recurring income and increasing profitability, then the share price potential will completely outweigh misgivings over the CEO's salary package.

[calijoe] 31/7/2019 11:39

You could be right Rivaldo. By the way, what do you think of the CEO, given the business' awful performance over the past 2-3 years, all-time low shareprice and his enormous salary (>10% sales)?

[rivaldo] 31/7/2019 11:04

CaliJoe, I assume because of the flux that SIM was in with the transition to SaaS etc and the difficulty in looking ahead. Hopefully the H1 results will show a clearer picture and enable the resumption of forecasts.

With $6m net cash, plus large trade receivables, SIM certainly have the firepower to further their aims in VR, AR etc.

[calijoe] 31/7/2019 09:26

Any ideas rivaldo why finncap has stopped their forecasts?

[rivaldo] 31/7/2019 09:00

Two excellent contract wins with the US Air Force in the last couple of weeks.

The transition to SaaS should hopefully be over the main short-term impact in terms of loss of lumpy licence fees and replacement build-up of recurring income.

If SIM can continue to win such prestigious contracts, then the following phrases from last year's Finals should be achievable for this year and going forward:

"the Company expects to quickly resume cash flow positive activities and profitability"

"positions the Company well to deliver improved financial performance in 2019 and beyond""

Hopefully Finncap will re-initiate forecasts following the H1 results next month.

[varies] 25/7/2019 10:58

The announcement tells us that profits expected from this contract are already factored into expectations for 2019. So, I believe, were profits from the contract announced a few days ago.
A few years ago SIM changed its accounting rules. Profits from long-running contracts would be brought into account over the term of the contract whereas SIM had previously brought the initial payments into the years in which they were received. This is my understanding and I would glad to hear from anyone else here who understands such things better.
The price of SIM shares then was over 25p and fell sharply on this change.
We should soon reach a point when this change has a beneficial effect on profits reported and we have been led to expect an improvement in 2019.
How much of this will be absorbed by Mr Vizir remains to be seen.

[uk2day] 25/7/2019 09:10

Another contract win! Why no visible rns on monitor? Anyone?

[brummy_git] 18/7/2019 12:54

Thanks Yump - You're right.

According to the 2018 annual report, the CEO took home a $521k package (> 10% Simigon's revenues) last year, including $39k for vacation days (?), $29k as a severance allowance (?) and another $39k for health insurance.

Plus it appears Mr Vizer (& his relatives) gets paid another $75k per year, renting out some office space to the company.

[yump] 18/7/2019 12:29

Glad I got out a good while ago. The chart shows what investors think of the 'core metrics'.

Why is it that some of the poorest performing businesses end up with the 'look at the cash' comments, over and over again. If that's the biggest positive, its a pretty useless investment prospect.

If anyone is thinking of averaging down, please look up 'sunk cost fallacy'.

There are plenty more businesses to put your money in where they haven't been sucked dry by high BOD salaries and the cash has actually been spent to generate growth, because the business, the products and the management are....

...GOOD.

[calijoe] 18/7/2019 12:22

Google is amazing. Worth a read guys -> comments on Glassdoor from recent staff leavers.

hxxps://www.glassdoor.co.uk/Overview/Working-at-SimiGon-EI_IE593160.11,18.htm

[unclesamgw] 18/7/2019 12:12

Many thanks to chalky - hadn't realised that. Also it seems as though American Express is suing Amos vizor and via airlines.

hxxps://flarecord.com/stories/512593381-case-activity-for-american-express-national-bank-vs-amos-vizer-on-may-29

[chalkyboard] 18/7/2019 10:57

Good to see too that the CEO has (after 5 years - see below) finally decided to concentrate fully on profitably growing Simigon, rather than also simultaneously trying to run his (Amos Vizer is apparently the Chairman) and his wife's (CEO) US regional Airline, Via Airlines.

hxxps://www.tribpub.com/gdpr/orlandosentinel.com/

[uk2day] 18/7/2019 09:35

Up we go!! Far too cheap to ignore!!

[rivaldo] 29/4/2019 12:17

Indeed. The transition to SaaS has inevitably slowed progress, along with contractual mishaps. But given the trading at essentially break-even, the blue chip clients globally, the potential in simulation training, unmanned aircraft, VR and AR, and the $6m cash pile relative to a £1.5m EV at the current share price, let's see if this year justifies the increased optimism in the outlook.

Finncap have updated today and hope to relaunch forecasts asap. They conclude:

"Transition: the on-going transition to SaaS impacted sales as license revenue is spread over 5-12 year (reduced by 85% this year) yet 2018 was one of Simigon’s strongest delivery years. This should improve the long-term financial security but leaves the current valuation looking extremely cheap on core metrics."

[daz] 29/4/2019 09:37

Agree Rivaldo, the company does look better placed than for some time.

The development of new markets and verticals that they made such a play of a couple of years ago is still painfully slow though but hopefully they will at last start to see some of that coming through.

[rivaldo] 29/4/2019 08:03

Pretty decent results today, particularly as regards H2'18 compared to H1.

SIM made a loss of only $0.3m excluding the one-off bad debt provision - and in H2 this loss was just $0.04m.

So SIM is now trading essentially at break-even. And this outlook reads well in that respect:

"By increasing SaaS-based contracts for more recurring revenue and better long term visibility, together with intensive R&D investment and business development efforts on multiple market opportunities, the Company expects to quickly resume cash flow positive activities and profitability."

This £5.6m m/cap has $6m net cash plus around $2.4m net trade receivables/payables.

SIM have written off $2.34m of R&D expenses - and this increased to $1.3m in H2, yet SIM still almost achieved break-even.

And of course there's also today's other extremely interesting news re the commencement of an AR training programme with Israeli Air Force:



"SimiGon kicks off Augmented Reality maintenance training research with the Israeli Air Force

SimiGon (LSE: SIM), a global leader in providing simulation training solutions, is proud to announce that it has commenced a ground-breaking Augmented Reality ("AR") research programme with the Israel Air Force ("IAF") (the "Programme"). The Programme will utilise SimiGon's R&D investments in the Virtual Reality ("VR") and AR domains with respect to aircraft maintenance training by providing the invaluable ability to test and refine technologies in the demanding, up-tempo operational environment of the IAF.

SimiGon designed and developed AR and VR enhanced products and technologies will be used by the IAF in the research programme with the IAF providing logistical support and subject matter expert feedback. The Programme is expected to place SimiGon at the forefront of technology and it will enable the Company to use this technology in various domains. As the market for AR and VR enhanced training takes off, it is expected that this Programme will have positive impact on the Company's business opportunities.

SimiGon Vice President of Research and Development, Hagai Piechowicz, said: "SimiGon's training technologies will be making a great leap forward with this Programme. Our R&D team will rapidly design, develop, prototype and test our newest training technologies for the AR and VR aircraft maintenance environment in the IAF F-16 squadrons."

[rivaldo] 24/4/2019 07:11

Good news today re a $1.41m extension to the US Air Force contract:



SIM must now have a considerable portion of forecast revenues for this year already secured.

This is another validation of SIM's business. And there's an interesting concluding comment which hints at more to come:

"Management expects this Contract to generate new business with the USAF and other Government end users."

[rivaldo] 18/4/2019 11:42

I don't disagree with any of that. But as a part of a diversified portfolio, I believe that:

- with the £5m-£6m cash pile almost equal to the m/cap
- with a number of long-term blue chip customers
- with the transition to recurring revenues largely complete
- with the obvious potential in VR/simulation
- with similar potential in diversification into related areas
- with a number of contract RNS's securing income for this year
- and with a more positive outlook for this year and going forward per the last trading statement

the upside remains large - if they finally get it right - and the downside from this £6.3m m/cap (there are only 51.4m shares in issue) is relatively limited.