Covata Ltd (AX:CVT) reported its bookings intake for the first time, highlighting the benefit of a recent contract negotiation with one of its largest resellers, as well as contract wins for both SafeShare and CipherPoint. Development of the Data Security Platform (DSP) is ongoing, with beta launch expected later this year.
H118 results show revenue acceleration
Covata recently reported H118 results, with revenues of A$0.7m, an EBITDA loss of A$3.1m and a net loss of A$3.1m. Net cash outflow in H1 pre-equity raise was A$2.0m; net cash flow post the A$2.0m raise was effectively zero, to close H118 with a cash position of A$6.3m. The company expects a cash outflow for expenses of A$2.08m in Q318, before any receipts from customers. The CipherPoint acquisition contributed revenues of A$0.34m in H1, triggering the first milestone payment. If contracts are signed at a similar pace in H2, we would expect the second milestone (US$500k revenues in FY18) to be hit.
Bookings intake shows progress with new strategy
Covata reported a bookings intake of A$2.27m in H118. This includes all contracted revenues to be recognised within the next three years. A large component of this ($1.4m) arose from the renegotiation of the MaqTel contract, which should result in revenues of c A$0.47m pa over the next three years, a material uplift to the previous contract. Also included in this number are the recently announced CipherPoint contracts with Arthur J Gallagher, a German industrial company and a US sports franchise, totalling c A$0.3m, and previously announced SafeShare contracts totalling A$0.4m. We would expect future bookings intake to be more modest, as it will not have the benefit of the one-off MaqTel contract negotiation.
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