Equity Development upbeat on Synchronica following recent contract wins

In an note on Synchronica (LON:SYNC), entitled “Large Contracts Arrive Like Buses”, investment research specialist Equity Development said that several new contracts, announced last week, vindicate its decision to retain positive forecasts, despite the cautious statements previously reported by the company prior to its recent FY09 results.

On Tuesday 29 June, the company announced an 18-month contract, worth US$1.28m in the first 6 months, with an emerging market focused device manufacturer, to bundle the Mobile Gateway product in Asia and the former Soviet Union. Later in the week, Synchronica landed a US$1.25m contract via its distributor in Latin America; a US$1.09m purchase order from a device distributor targeting Indonesia; the first order through its deal with Nokia Siemens Networks to provide licenses to a North African operator; and two purchase orders from a device manufacturer in India.

“These contract wins have significantly improved the revenue outlook for FY2010, though the company still has some way to go in the traditionally busier 2H to meet our £12.8m revenue forecast for 2010. Attainment of our forecasts would suggest a share price valuation of 3.7-4.3p for 2010 and 7.5-9.6p for 2011,” Equity Development stated.

Synchronica develops industry-standard mobile push email and synchronization products. Its portfolio includes the flagship Mobile Gateway product and the device backup solution, Mobile Backup. Mobile operators in emerging and developed markets use Synchronica's white-labelled products to offer their consumer and business subscribers mobile email, PIM synchronization, and backup and restore services.

In response to the flurry of new business, Equity Development highlighted that the Latin America deal with a Tier-1 operator, secured by Brighstar, “gives Synchronica added credibility in the region as well as access to a very large and still growing mobile subscriber base”. Also the researcher noted that the North African contract is important as it represents the first carrier contract gained through Nokia Siemens Networks and “hopefully this will now be the first of many.”

"We are very pleased to announce this flurry of contract wins and purchase orders for our flagship product Mobile Gateway ... This once again demonstrates Synchronica's competitive strength as well as the Company's growing global footprint in emerging markets”, Synchronica chief executive Carsten Brinkschulte told investors last week.