Digital Barriers plc Trading Update (9056F)
February 26 2015 - 2:03AM
UK Regulatory
TIDMDGB
RNS Number : 9056F
Digital Barriers plc
26 February 2015
26 February 2015
Digital Barriers plc
("Digital Barriers")
Trading Update
The Board of Directors (the "Board") of Digital Barriers (AIM:
DGB) (the "Group"), the specialist provider of advanced
surveillance technologies to the security and defence sectors,
provides an update on trading for the current financial year,
ending on 31 March 2015.
Trading
The Group continues to secure contract awards with key customer
organisations in both domestic and international markets, further
examples of which have been announced separately today. However,
the timing of two expected significant contract awards in relation
to the Group's financial year-end means that revenues for the
period will fall below the Board's initial expectations, although
they are expected to be stronger than the prior year (FY14:
GBP19.0m). As a result, losses for the period will also exceed
Board expectations, although they are expected to show a
year-on-year improvement (FY14: Adjusted Loss before Tax*
GBP12.0m). Cash at the year-end is expected to be approximately
GBP8.0m, compared to GBP14.2m on 31 March 2014.
The two contracts in question are now expected to close and be
delivered early in the first half of the coming financial year and
the Group's broader sales pipeline remains strong. On account of
this, and coupled with the operational improvements outlined below,
the Board expects that the revenue risk associated with deal
closure timings will now begin to reduce. Consequently, the Board
still aims for the Group's performance by the end of the financial
year ending 31 March 2016 to be break-even.
Operational Improvements and Focus
In October 2014, the Group changed its senior management
arrangements, appointing Zak Doffman to the position of Chief
Executive Officer. Led by Mr Doffman, the senior team subsequently
initiated a detailed review of its operations, which has now
concluded. Improvements to sales and technical leadership teams; an
increased focus on maximising the opportunities presented by key
accounts; and an ambition to deliver a larger number of follow-on
sales to existing customers have been three key focus points
following this review.
Improvements to the Group's sales operations are best evidenced
by new sales leadership appointed in three of the Group's four
international regions. The Group also now has a much tighter
strategic focus, balancing the ongoing sale of advanced
surveillance solutions built around the Group's intellectual
property with a parallel, longer-term focus on licensing or selling
its intellectual property through partnerships with a number of the
industry's leading technology and services companies. Some of these
partnerships are already in place.
This stronger sales leadership has already enabled the Group to
close material opportunities from its sales pipeline. The most
significant of these closures have been in the Group's UK/Europe
region, where new sales leadership was appointed in October 2014.
Changes to the management arrangements in the Group's Americas and
Middle East/Africa regions were made in January 2015, and are
expected to yield similarly positive results in due course.
The Group remains focused on securing new flagship government
and commercial organisations as customers for its class-leading
technical solutions. With increasing numbers of these organisations
having adopted the Group's technologies, each of the Group's
regions is also focused on key account management to secure
follow-on sales. An increased volume of existing technologies sold
into existing customers should lead to enhanced forward visibility
and improved sales forecasting.
Taken together, these changes and their early positive impacts,
combined with further planned restructuring of the Group's
operational cost base, give the Board confidence in the trading
ambition outlined above.
Zak Doffman, Chief Executive Officer of Digital Barriers
commented:
"It is frustrating that the timing of sales closures has
impacted our performance this year, but we firmly believe that we
remain on the right long-term course. In recent weeks we have seen
encouraging progress with our first sales secured into leading
transportation, energy and industrial services companies. During
the period we have also seen our technology selected by government
agencies in the US, Asia, the Middle East and Europe. Our focus now
is to turn modest initial sales into material follow-on sales from
next year.
To achieve this goal, we have carried out a granular operational
review. This review has brought about three key changes:
significantly improving sales leadership, focusing harder on key
accounts, and pursuing follow-on sales with greater determination.
These changes are already yielding results and position us well to
reach our long-stated break-even goal."
For further information, please contact:
Digital Barriers plc Tel: 020 7940 4740
Zak Doffman, Chief
Executive Officer
Sharon Cooper, Finance
Director
Investec Investment Tel: 020 7597 5970
Banking
Andrew Pinder/ Dominic
Emery
FTI Consulting Tel: 020 3727 1000
Edward Bridges/ Matt
Dixon/ Rob Mindell
About Digital Barriers
Digital Barriers provides advanced surveillance technologies to
the international homeland security and defence markets,
specialising in 'edge-intelligent' solutions that are designed for
remote, hostile or complex operating environments. We work with
governments, multinational corporations and system integrators in
the defence, law enforcement, critical infrastructure,
transportation and natural resources sectors. Our surveillance
technologies have been successfully proven on some of the most
demanding operational and environmental deployments around the
world.
www.digitalbarriers.com
This information is provided by RNS
The company news service from the London Stock Exchange
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