CyanConnode Holdings, a notable provider of smart metering technology, has shared its interim results, suggesting a strong performance outlook for the remainder of 2024. Despite seeing a slight drop in revenue in the first half compared to its exceptional 2023, the company’s considerable backlog and recent contract wins are expected to fuel a successful second half of the year. Panmure Liberum analyst Harvey Robinson highlighted CyanConnode’s potential in the Indian market, where the company’s smart metering solutions are rapidly gaining traction, capturing a 25% win rate by volume and securing around 14% of the country’s smart metering market share.
The company’s backlog has now exceeded 13 million units, more than double previous figures, and it anticipates deploying roughly 9.7 million units by the close of the financial year. This deployment should notably boost revenue in the fourth quarter due to typical seasonal demand patterns. CyanConnode’s focus on software and services, now accounting for 20% of revenues, has helped lift its gross margin from 31% to 41%, generating a gross profit of £2.3 million, up from £1.8 million in the same period the previous year.
India remains a key driver of CyanConnode’s growth, especially with a recent Letter of Award (LOA) for 6.5 million Omnimesh Modules, issued by a global partner. This contract has nearly tripled the company’s backlog to 9.7 million units, up from 3.5 million units at the end of FY24. CyanConnode also received a follow-on order worth $1 million from the MENA region, marking progress beyond India and helping diversify its revenue base.
In addition, CyanConnode recently raised £5.4 million through an oversubscribed placing, enhancing its financial standing and providing the necessary support for its strategic goals. Panmure Liberum has upheld its Buy rating on the company’s stock, with a target price of 18.5p. The development of a new, durable gateway version further underlines CyanConnode’s commitment to innovation and positions the company for sustainable profitability, with projections indicating profitability by FY25, spurred by rising revenues and improved gross margins.
CyanConnode’s interim results point to a promising second half of 2024 and underscore its pathway to sustained growth in FY25. With improved gross margins, an increased share of revenue from software and services, and solid positions in key markets like India and the MENA region, the company is well-prepared for further expansion and profitability. CyanConnode’s progress is certainly one to watch closely as it solidifies its position in the smart metering sector.
