Seamless Distribution Systems - Order intake broadens beyond the upgrade cycle

Impala Nordic comments on two orders announced by Seamless Distribution Systems AB (publ) (“Seamless” or the “Company”) on 14 and 15 October.

On 14 October, Seamless signed its first commercial contract for the new generation of its Intelligent Platform with a leading African telecom operator, sold as an annually renewed licence. The following day, the Company announced an order worth SEK 3.0 million from an existing customer in Sudan, covering its Voucher Management System and comprising a SEK 2.0 million licence fee and roughly SEK 1.0 million for three years of support. Both contracts fall outside the ERS 5 upgrade cycle that accounted for every order announced earlier this year, which in our view makes their composition more notable than their size: one is a new product line reaching its first paying customer, the other a second product sold into the existing base. Order volume has yet to follow, as these are the first orders announced since 7 August. With revenue recognised progressively as delivery proceeds, the order’s contribution to this year’s earnings is expected to be limited. Achieving the full-year guidance of SEK 45–55 million in profit before tax is therefore likely to prove challenging. Attention now turns to the third-quarter report on 12 November.

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