Simulation training services provider SimiGon Ltd has won a substantial South American military contract.
The unnamed country has chosen PC-based SIMbox to train all of its armed forces. The contract starts immediately and will be completed in early 2013. There will also be additional licence sales to a local partner that will generate additional recurring revenues. Further Latin American contracts could follow.
The share price rose 2.75p to 14p, which values SimiGon at £6.48m. Net cash of $4.6m covers nearly half of that valuation.
House broker finnCap forecasts a 2012 profit of $1m, which puts the shares on nine times prospective earnings. The new contract underpins this forecast.
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