Narrowband radio frequency communications networks developer CyanConnode (LON: CYAN) reported a decline its interim revenues but it is doing a good job of conserving its cash. The company is still on course to increase its revenues for the full year.
AIM-quoted CyanConnode is participating in tenders for 75 million smart meters in India, which is equivalent to £1bn of revenues, and more than 20 million have reached the final stage of tendering. The current record is that around one-quarter of the volume of tenders are won by partners of CyanConnode. Contracts are also being won in the Middle East and North Africa.
In the six months to September 2022, revenues fell from £4.08m to £1.35m. The operating loss doubled to £2.4m. There was a £114,000 cash outflow from operations and there was more than £1m in the bank at the end of September 2022.
Third quarter revenues are going to be at least treble those of the first half. Achieving the growth in 2022-23 revenues from £9.6m to £12.6m will still depend on improving activity levels in the fourth quarter. Demand tends to increase ahead of the March financial year end for Indian companies. A loss of £1.1m is forecast. There could be £3.2m in cash by the end of March 2023.
Uncertainty about the full year outcome has held back the share price. It did recover by 0.375p to 13.125p. That is not far off the low for the year. CyanConnode is valued at £31.6m.
If revenues can be significantly increased, then CyanConnode should be able to achieve profitability. Further contract wins will be required, though.
