CyanConnode Holdings plc (CYAN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the CyanConnode full year results investor presentation. [Operator Instructions] I'd also like to remind you that this presentation is being recorded. [Operator Instructions] And I'd now like to hand over to John Cronin, Chairman; and Heather Peacock, CFO, from CyanConnode. Good morning to you both.

Thank you, Mark. Good morning, everybody, and welcome to CyanConnode's full results for 2021, and it's an update that we've given to our shareholders and investors. Just to say prior to the pandemic, we used to do presentations at the Annual General Meeting. But with this video through Investor Meet Company, we've got a better reach. For instance, we used to have about 10 people attend the AGM. Now through Investor Meet Company, we have over 100 registered people to attend, and would never get that many at an AGM. So I think technology of videos is making people to sort of get more information in a timely manner, which is great. As we did state in the RNS sent out about this meeting and about the AGM, in light -- we say in light of the uncertainty surrounding COVID-19, physical attendance in person at the AGM is discouraged, and that's why we can do this presentation sooner than waiting for the AGM. I mean at the AGM this year, we'd only be doing formalities now, which will probably take no longer than 15 minutes just to put it in perspective. I have to also say, just as we have to say this to everybody, that there's no forward-looking statements in the presentation or in the questions that we'd be going through afterwards. There's been some pre-questions that's been set, which we'll go through every single one of them. And we can only put forward information that has been released to the market previously. So just to put some health warnings on that. So there's a health warning that we've got. So just moving on now to the next slide. So just what we'll do, myself and Heather are going to turn off our cameras so we can see the slides more clearly as we read out as it's a bit difficult with -- looking at the camera as well, but we will put the cameras back on at the question stage. So as you can see here, and just a few slides to set the scene for those people that are new to the presentation and new to the company, you can see that we're headquartered in Cambridge in the U.K. We have offices in Sweden and in India. We have a number of people in India right from sales, presales, technical support, delivery, finance, HR, a full-blown company, exactly replica of what's in the U.K. And the U.K. is the center of excellence. And we also then have people in India that is where we've done some skills transfer of different skills and knowledge into India. By the way, we will be putting these slides on to the website. So there will be copies available later on in the day just for those people who are taking notes. Just on the next slide here, you can see today, we have something like 2.1 million end points, electricity and street lights, to date from about 20 customers worldwide. We look at end points as either modules or, indeed, as we do in the U.K., providing software only for end points as Toshiba provide the hardware. But you can see the end customers and then you can see system integrators, a middle layer, and the meter manufacturers that we have. And basically, we're agnostic to any meter manufacturer in the world, and that's one of our USPs, which I'll mention later on in the presentation. Thought this would be a useful slide to show. On the left-hand side, what it's showing is the benefits of RF mesh over cellular and power line communication, that's what PLC stands for. You can see the outer ring of the spider's web as we call it. And the red where you can see RF, in all cases, is better in terms of performance, in terms of 2-way communication, in terms of coverage, network resilience, standards, et cetera, over and above the purple line, which is cellular, and then the PLC line as well. And this gives us better performance, great value and scalability. On the right-hand side, what you can now see is what we offer as CyanConnode. And that is we offer, through our Omnimesh platform, not only RF mesh, but also cellular, whether it's 2G to 5G or NB-IoT. And we say to our customers now, don't worry about what technology is being delivered to give you the data in the regions that you want and the measurements that you want, that's near enough live data. Let us worry about that at CyanConnode, and we're putting the appropriate communications to hook up your meters. So you can see we can have a combination in urban and suburban areas of the RF mesh and the last mile as we call it. And then we have the backhaul over cellular, which is good. And then when we look at isolated small clusters like small villages, individual farmhouses, we can then put cellular to those. And then the cellular and/or NB-IoT and RF all go back to the head end -- same head end system. So it's one system that the customer has. And therefore, they're much more happier. And the important thing is, is about the SLA that is delivered. The service level agreement that we have with the end DISCOM, the end utility, we delivered 99.5% plus, and in some cases, 100%. Cellular delivers something between 84%. And the best, when you remove some features like load bearing, it goes to 95%. This is why really going forward, it's a hybrid of RF mesh and cellular to give the performance and the clarity of the data to the customers. I'll just hand over now to Heather. She'll just take you through some of the highlights and numbers, et cetera.

Good morning, everybody. Yes. As I'm sure many of you are aware, the last financial year was a really good year for us despite COVID. In terms of revenue, we saw 163% revenue growth to GBP 6.4 million. And if you remember, the previous financial year had been a 15-month period. So to go from GBP 2.5 million for 15 months to GBP 6.4 million for a 12-month period was really a good achievement. And you will also have seen the number of modules that have been shipped in the last financial year. We shipped nearly 0.5 million modules versus less than 100,000 in the previous financial year. We've continued also to monitor our costs -- keep good cost controls. And as a result, we've seen a reduction of 57% in our operating loss to GBP 2.7 million for the period. And as you can see from the graph, the company is moving towards profitability. If you look back in 2017, where we were, you can see the strides that we have made. And that is sort of -- the key focus is to move towards that breakeven and past into profitability stage. 62% reduction in adjusted EBITDA to GBP 1.9 million adjusted EBITDA loss versus GBP 4.9 million the previous year. And a 27% increase in cash and cash equivalents to GBP 1.5 million, and that was without going out for any sort of funding in last financial year. Some of these points on the next slide have just been covered on the previous slide. As -- just to highlight, obviously, the increased revenue, cost controls. We've got a significantly increased order backlog. We achieved an order of 350,000 modules last year. And along with the deployments on the order of 430,000 that had been delayed the previous year and other orders that we had in the backlog, it was nearly 1 million units that we were deploying. And we've got around about 500,000 -- at the end of the financial year, we had about 500,000 left just for India still to be deployed. So that is where when we talk about how we are, on the previous slide, actually, just mentioning here the market expectation for revenue growth to GBP 9.4 million in this current financial year. It was GBP 8.8 million, which was expected from the order backlog just from last year that is expected to be delivered during this year. Not only in India, but we've got contracts in Thailand. And since the end of the year, we've announced another order in Thailand and continued rollout of Swedish contracts. So you can see that it has led to a major acceleration in deployment over the year and continuing into this year. During the year, we announced a new team in India, new CEO/MD, which was Ajoy Rajani, and an appointment of a new COO, Ratna Garapati. Since the period end, as you know, we've appointed a new CEO/MD who came in from IntelliSmart, Rajiv Kumar, and Ajoy is now the Vice Chair -- Non-Executive Vice Chair in India. So he's still very much involved. And it's great to see the experience of somebody like Rajiv who's coming from Intellismart, which we can see the benefits already within the company. The improved cash position, letters of credit and advance payments. So typically, we often go for advance payments for rest of world contracts, and that's what we've received for most of the Thailand work that's been done in advance before we even ship. We will receive payments from the customers, and we received GBP 5.3 million altogether from customers by letters of credit and the advance payments and, obviously, payment of any bills for things shipped during the period. This graph, you may have seen before, this shows the acceleration of modules during last year. You can see the early part of the year when we were in lockdown last year, there were not many shipped. And then gradually, as we came out of lockdown and the contracts accelerated, it sort of really ramped up, especially in the quarter from January to March this year to take the 481,000 this year. This is a share price graph, just showing what is our key focus is to deliver shareholder value. And going back a year ago and even prior to a year ago over the summer of last year when we were in the height of the pandemic when many companies actually were affected from a share price point of view, our share price was down even sort of lower than the starting point of GBP 4, which was a year ago. It was down sort of around about GBP 2, and at some points even below that. So we're really pleased to see the growth in the share price. It peaked just after the placing that we did in June, but you can see it's gone up recently again. And that's -- the aim is to grow the share price to deliver shareholder value. Since the period end, we've announced 3 new orders. So the one was for a utility -- sorry, just hold on a second. Three new orders, the one for Northern India utility for 152,000 modules. And we're already starting the delivery on that as we speak. We're sort of working to get modules ready to start delivery on that. Follow-on order for Thailand for further 31,000 modules. So just going through the background of Thailand. As you know, in December 2019, we won an order for 33,000 modules with associated software and services. And then in March last year, we got a further order for software to take the software licenses to the total capacity for the project, which is 240,000. And then this is the next 31,000. We've delivered the whole 33,000 modules from that first order. We delivered during last financial year. And this is the next order for further modules to be delivered. And then a new order for Africa for a further 100,000 modules. So Africa, John will talk a bit more about the markets later in the presentation, but that's -- this is one opportunity that we've won, but we see opportunity in other territories in Africa as well. We signed new partnerships. So for example, the MOU with IntelliSmart. We've been selected as technology partner for EESL in Middle East and Africa and then the global strategic alliance with Smart Energy Water. We completed a heavily oversubscribed placing. So we received GBP 3.1 million gross from new and existing shareholders, and this was done at a premium to the share price. I will talk about the proceeds of that placing on the next slide, just to talk about the background and the sort of reasons for going for the placing as opposed to, for example, a debt facility, which we've discussed previously. There was further strengthening of the India team, we talked about previously on the previous slide. And in awards, so the award of the London Stock Exchange, Green Economy Mark. This is something, I think, everybody is very much aware from recent events, fires that we're seeing wildfires and floods and climate change, everybody is very much aware of the importance of doing everything that we can for the environment. And it was really good to see that the London Stock Exchange has recognized our technology. So the way that our technology is considered to be green technology is, first of all, if the utility installs smart meters, it means that there's less people driving around in cars to read meters. It's less people having to go out to, for example, banks, post offices to go and pay their bills. So the fact that the whole system is automated, not only did it also sort of show benefits in the pandemic where there was lockdown because all of this process being automated was not interrupted, it obviously means it's better for the environment. It also -- with implementing our technology where we've seen in some utilities -- also John will talk about this later on, the one case study that we've got on MPWZ Indore, they -- from installing our technology where it sort of prevents test and tampering of the meters and more efficiencies to the utility and actually also means that they use less electricity. So all of that contributes to the environment. And the benefits to us of having achieved this award is that many companies are required now to really sort of focus on ESG, and funds also need to focus on -- some funds have to set aside certain amounts of their investments that need to invest in companies that are considered to be green companies. So all of this is really considered as a benefit to us. Getting back to the placing and the proceeds of the fundraising. So one of the things is to fund development to accelerate new products. We've got sort of a quite a small team of developers in Cambridge. We are further sort of expanding development and engineering into India, but obviously, being able to get a couple of extra resources to help accelerate the development of some of the new products that are needed in the short term. One of the key things is also to strengthen the company's balance sheet and get confidence to show that we can scale up. What we see is some of our partners -- as you know, many of our partners are multibillion-dollar organizations. And the contracts that we deliver are large contracts, and they are delivered over a long period of time, some of them up to 10 and more years, but a minimum of usually around about 7 years. So we often get questions from our partners when -- for example, we're a public company. All of our financials are on our website for anybody to have a look at. And some of the companies will come back and say, we've looked at your balance sheet. And are you sure that you can deliver a contract that's going to run at over 7, 8 years? So that was one of the reasons is really to give confidence that we can give -- that we can scale up, give confidence to some of these large organizations that we partner with. Optimizing the company's working capital also in respect of stock and payables. This is linked to the next point as well, funding certain long lead time, critical components required for production. The one thing that we have seen in the pandemic, one of the knock-on effects of the pandemic, is many people going on to electronic devices, buying more electronic devices. And this has led to shortages around the world, affecting car manufacturers and many other businesses, but also manufacturing of our components, they are quite long lead times. And fortunately, we sort of planned for this right from the end of last year where we could see that things were ramping up, that's one of the really critical ones, we sort of -- by also good relationships with our suppliers. We've managed to mitigate and ensure that we've got a pipeline of components to come into us. But some of the other components, we've -- it's sort of -- the lead times have gone out, and we've had to go to other places to go and buy. And in some cases, because of such shortages, people require these to be paid upfront, and it's -- and so that's what the fundraising also helped with. And then the final point is to enable rapid expansion and pursue large targeted growth opportunities. As we said before, we've really focused, over the last 3 or 4 years, on just going to -- going for opportunities where they show the nearest-term growth and nearest-term revenue opportunities. But some of those that are being posed to us are the sort of near term, and maybe we don't have resource. So we want to make sure that we can capture any opportunities that are presented to us as long as they are ones that will deliver revenue in the near term to us. Looking at the different business models that we currently operate with. The typical model that we've seen, particularly, for example, in India, is the CapEx model where there would be capital expenditure over the first couple of years that would be paid by the DISCOM. And that's typically about 80% of the contract. And then after that, you would see a support and maintenance contract paid monthly or quarterly over the next sort of 5 or 6 years. So that's a typical CapEx model. That's the most price competitive as -- looking at the benefits to DISCOM, most price -- most competitive to them. And they only asset 100% from the outset, and there's much less dependency on the vendors after the initial rollout. What we've seen is we've been moving towards more of a hybrid model, and this hybrid model might be something where there's about 30% CapEx against the supply of the hardware and then 70% OpEx. So everything else that isn't hardware would be spread as a per meter per month over the remainder of the contract. That is obviously -- that gives the added benefit to the discount where there's less initial capital outflow. The required capital can be met through the regular DISCOM funds, and they have assured deliveries as the vendors payments are unlocked. It also means a quick implementation as there's an early realization, which will be the vendor's target. Then what India is really moving towards now is the OpEx model, which would be done via an infrastructure fund. So the OpEx model to CyanConnode still works as a CapEx model because, for example, if there is an SPV that is set up that would run the contract, we at CyanConnode would still be paid as CapEx. We would sell our products into the SPV, and things for us may not necessarily change from a revenue point of view. The SPV was then funded, and 100% of the project costs are paid for by what are called EMIs, so equal monthly installments, for the duration, and that's on a per meter per month basis. The benefit -- the big benefit, obviously, to the DISCOM is that there's no upfront capital expenditure, but there's interest rates on return on equity and debt repayment. But then the EMIs can be paid through the benefits achieved through the EMI. As such, there's no investment. So for example, the savings that they make can pay for the whole system on their own. And it's a quicker and faster rollout as early deployment leads to the start of the EMIs. The right technology delivered guarantees -- it gives a guaranteed SLA on this. So this is where -- as John talked about in one of the earlier slides, RF has been seen to deliver one of the best SLAs, which is 9.5% and above. So that's why we feel that our technology can be really beneficial in these large rollouts in India and elsewhere. And I'm now going to hand back to John.

Yes. Thanks, Heather. So just to focus a little bit more on India. As you know, India is our prime market, and we see the best market worldwide where, just to recap for everyone, there's 250 million units to go after in India. And let's assume for us that we only get 20 million over the next 5 years. That's quite a significant growth if you think that per point is anywhere from $28 to $30 a point. So that's a large revenue turnover and something that we're aiming for. So we have to do that through multiple partners. And that's why the ecosystem of partners is really important. And we're in the heart of that ecosystem of partners, which shareholders should be pleased to hear. And today, if you think about it, there's around about awarded -- well, implemented, I should say, around about 3.5 million-ish meters. So it's nothing to date. Obviously, IntelliSmart got orders in hand, around about, in total, 8 million, 9 million. But even so taking that and with what we've done, there's a huge amount. I mean we've hardly scratched the surface, really, in terms of the opportunity in India. You can see it's also supported by the Government of India. You can see the Finance Minister has allocated $42 billion for the power and renewable sector, which is good. And that will continue being implemented over the next number of years. So there's even more cash going to come from the government. And that's proven by the bullet point a couple down, saying that the central government also is giving grants to the DISCOMs, to the utilities to the tune of GBP 3.1 billion, which is about 15% of the cost of the devices will be supported. So you can see there's a real push to get that done. And not only that, but there's a lot of people coming out of the woodwork now because of the opportunity in India that has become more real. So there will be other look-alike-type companies like IntelliSmart. So the Power Grid Corporation only announced last week that they're entering into the smart metering market, very similar to wanting to fund the projects very similar to IntelliSmart. So there'd be a number of these agencies to be able to handle the rollout as well as, of course, our normal CapEx, that Heather went through, model where we go through meter manufacturers to -- or system integrators or mobile operators to the customer. And that pipeline that we have today, that opportunity and bids that we're working on in India alone is worth around about $80 million. They're all at different stages, as you can imagine, as we go forward. I'll go through what the bidding stages are. Many of these are funded through third parties as well. And more and more, we're seeing some of the opportunities. They aren't just CapEx, but they are the OpEx model, as Heather mentioned. And the OpEx model where the SPV, she mentioned, which is a special purpose vehicle, everything -- the hardware all goes through that special purpose vehicle, and it's financed by infrastructure fund. It's a bit like all of us if you go to a car showroom and you lease a car for 3 years, then the car showroom, they get their money when you take control of the car, but you have then the leasing arrangement for 3 years with the finance company. This is exactly the same. It's a way of spreading the cost over 7 to 10 years per meter per month to make it affordable for the DISCOMs to actually implement smart metering. And as Heather said, where they may recover $2 or $3 each month by improvements in billion, getting people to pay their bills, where they haven't paid and it is where prepaid metering is important, so they're controlling that. So they get the money -- it might cost them $1 or $2, but they're getting $3 plus black. So it covers that cost of doing metering as a service. Just as an example, Indore, which is something I'll talk about in a moment, which is in the state of MP, where we've already won 3 orders, they are now going to issue additional 2 million or 3 million tender for over 3 utilities. So hopefully, we'll be in a good position to win one of -- at least one of those other utilities going forward. Just a little bit on IntelliSmart here in a couple of slides. So just to recap what IntelliSmart is. So they're a joint venture between EESL, which is a government body, and the National Investment and Infrastructure Fund. So NIIF is a platform that manages $4.5 billion of equity capital. And that's -- those are the shareholders in IntelliSmart. And what IntelliSmart is, is a bit like Macquarie is in the U.K. or Calvin Capital in the U.K., known as meter asset providers, which really, as I mentioned, deploying the funding -- or they fund the CapEx through the OpEx model. But what their real role is, is all about looking at the finances, the procurements, the deployments and operation of smart metering and had to accelerate the rollout of the 250 million smart meters throughout India. And they're obviously leveraging what they get from their shareholders in doing that. What they have done very successfully is what they've done is from a procurement point of view is really driven down the costs of buying the meter. The meter is the biggest bulk. I mean we're about INR 7,000. And through their procurement got it down to about INR 2,500. So they've proven that they can buy in bulk and drive down the cost. And really, this is where they see now that we -- with the MOU that we've signed that we'll work with them to actually help them deliver the SLA now required by the utilities and the collaboration that we've put together. And I'll just go on the next slide, just to go through a few points that IntelliSmart here, as I mentioned, around about 8 million to 9 million smart meters orders to date, 1.7 million that's being deployed. And this is through a nomination basis. Because of the government basis, there's 2 types of DISCOM utilities. One is run and controlled really by the state governments. Each government has its own, and some of those government sizes are -- with people are bigger than the U.K. And then the other one is by the National Party, the Modi party, Prime Minister Modi, they're in control of that. And there's about 8 or 9 utilities that are controlled by the center as opposed to the state. And those run by the government can actually nominate where they want to place tenders or orders because it actually isn't a tender as we know it. It's an order. And that's how IntelliSmart had got those orders. Whereas what we do elsewhere is we then tender for our work and winning those tenders with the other states throughout the country. So what we are doing -- why do they want us? Well, they rolled out the 1.7 million smart meters on GPRS. And we all know even in the U.K. that cellular doesn't work everywhere, and there's these notspots, et cetera. And what you have to do on electricity metering, you have to give 15 minutes -- every 15 minutes, you have to give data back to the head-end system from every single meter. So that's a lot of data, and it means that the network needs to be on all of the time. And that's what you get with RF mesh. It's there all of the time. And it's a private network as opposed to GPRS being a public network. So the benefits of RF will enable 99.5% service level agreements with the DISCOMs, performance up to 100%, whereas GPRS on its own is anywhere from 48% -- 46%, 48%, to the best sort of 95% if you do some adjustments. So they really do need the hybrid approach. So what we are doing there right now is working with IntelliSmart. And there's many meetings each week since we've signed the MOU with IntelliSmart, looking at where, of the 1.7 million, we will replace some of the GPRS meters with RF meters. Now to do that, it's not a simple process of just turn it up 1 day and just plug-in something and taking it away. We've got to work with the ecosystem and partners, whether it's the company that's provided the head-end system, it's the company that's provided the billing system, it's the different meter manufacturers that we have to integrate our RF into their meters, and also to ensure that all the processes are in place for the DISCOM utility to be able to read them on their systems, et cetera. So all that's taking place, and there's a number of units that we will do as a point and prove to the Board of IntelliSmart that the RF will work in a hybrid, and replacing what we call the brownfield site. So I call the 1.7 million is brownfield opportunity, and then I'll call the 8 million to 9 million that's still to be rolled out as a greenfield opportunity. And therefore, in a couple of the states, New Delhi and UP, this is where we're working on, replacing the percentage of them with RF. And this will help them prove the RF when GPRS as a hybrid to the rest of the portfolio of the 8 million to 9 million as well as we are already billing -- bidding in parallel on new tenders with IntelliSmart that are out there. So we're doing that right now using their OpEx model, which they'll do over the end about 7 years or so. So we are looking to look at doing this pilot, which will take a couple of months to bed down and to implement. And following on from there, then we'll know more about the quantity and the size of orders going forward that we get with IntelliSmart. So it's a bit early to say what the quantity will be, and it's a bit early to say exactly what date, but that's what we're aiming to do. And then we can all announce to the market once we're all clear on precisely the quantum and the size and the time lines. Just there's a question that was asked, and this is a slide that we used in last year's presentation. I thought it was worth putting back up again. But basically, it's about the -- what do we do with a competitive tender? Well, it's a full bidding process that goes on. Obviously, we have to work with our ecosystem of partners, which meter manufacturer, several meter manufacturer, which SI, which meter data management software company we would work with. And we negotiate with them and put the tender together. And once they have won the tender. So let's say it's a system integrator, they then come back after the award because it depends on what they've gone in with pricing, whether we've got to do anything there or any of the terms and conditions, the delivery timescales, can we meet the delivery timescale. So all of this takes time through the bidding process, through the gating of -- approving the technology, approving timescales, delivery components, also then of the pricing, and we negotiate and then they negotiate with all their other partners and then they place an order with us. So even though we know a partner may have won the business, and they would have won it with our solution and their meters and their SI work, et cetera, there's still a time lapse before we can say, yes, we've got the order, and therefore, we can go ahead and manage the market. But that's sort of just a typical way that India contracts work. We just have to be patient. But the -- as I say, various stages that we're operating in right now. Some we're working that are 12 months away where we go and talk to the utility and explain to the benefits of RF mesh. And our platform as a communications platform now allowing cellular as well as RF as well as the benefits of the SLA of 95% plus because that's what they're interested in. They're interested in the service level agreement and the performance to date that they'll get from us. Just briefly, as I say, there's -- these slides will be on the website. So you can look at these closer. But Indore is a great ambassador for us. Most Chairman MDs of utilities and ministers have been to Indore to look at the performance there. Give an example, within 3 months, we improved their billing by 25%, that's collecting more cash in that time, and control have been able to do disconnect and reconnect of meters by people that haven't paid the bills. And this is where prepaid then comes in, those they haven't paid the bill where they disconnect them, and they phone up with their credit card to get back online, they put them on to prepaid smart metering. And that means they're always getting the money upfront before they use in the electricity. So you can see here some of the drivers that Indore as MPWZ is known of why a utility would go for smart metering. On the right-hand side, you see the slide here that India loses $32 billion a year where they've generated electricity, distributed it but not collected the cash. And by the way, these 2 slides, I should say, have been written by the DISCOM, by the utility, not by us. So we just copy them over just to say that this is what they are saying about the performance of the CyanConnode RF solution that we've got in there, which it's going to be close to about 0.5 million units now that we'll have installed in Indore. So you can see some of the measurable -- the benefit, but I won't go through them. As I say, you'll be able to look at them more closely, but it's a good ambassador project for us, and it's something that we're very proud of. Just looking further then opportunities globally that we have. Heather mentioned we've got opportunities further in both Thailand and Sweden, and we continue to look at that as well as we mentioned the African project. And the sort of timescale that we're looking at for that is around about 12, 18 months. I mean we're just in the throes of doing surveys and planning because that's something else that has to be done, making sure we either get -- well, put the gateways for the backhaul of the cellular in the right places for the last mile to be picked up by RF mesh. So yes, it's -- we have to be careful with the information that we give on Africa because it seems that -- well, we know that there's a number of our partners, at least 3 that have come to us, all wanting quotes and pricing for Africa. So it's very competitive, and we have to be careful not to give too much information to our competitors because it's starting to heat up there in terms of the opportunities. And that's why we're careful. And we were asked by our customer partner to do the minimum information. So it doesn't leak out, and we don't want to give competitors any more information than we need to. But we are actually looking at several countries in Africa right now, and we are sort of looking at other areas of working with the likes of EESL for Cambodia and the UAE. And we've got opportunities where we're asked is to look at lighting, but lighting isn't a big thing for us. It's mainly smart electricity metering that we're focused on because we've got so much of it where partners are coming to us. And we are looking to move in other areas. We have talked in the past about Bangladesh, and I know there's a question on that, which I'll address later. Malaysia, we're working in and looking at that as well as Indonesia and, of course, the U.K. as well. And there are opportunities coming along in water metering. And the good thing is we do get advance payments in some of these countries. So you'll be pleased to know, in the African project, we're actually getting paid 100% for the hardware before we ship that hardware. So we get so much on order and so much before we ship. So that's good that we get the cash in before we ship that. There's a question that was asked as well, just about what is our USP. What's the unique selling point to CyanConnode? Well, we are a technology company. So what customers look forward, DISCOMs look forward is standards-based, IPv6 6LoWPAN, which is really important, so it's an international worldwide standard. We're fairly secure because we're a private network, as opposed to GPRS or mobile, which is, as you know, a public network, and it's not very secure. Our network, the Omnimesh network, has been approved by GCHQ from a security point of view as we're involved in the U.K. rollout. So security is really important, and we do have that at various different levels. And that is much better than you would get on GPRS or mobile. As you know, if you all come out of Wembley, and all try to make -- after a football match and make a phone call, those towers and the cells get blocked and you can't make a call. Well, that's not good enough when you got to do 15-minute readings on electricity metering. We are meter agnostic, so we can connect to any meter in the world, which is great. So we're independent from that point of view. And as I mentioned earlier on, we can handle not only RF mesh, cellular, NB-IoT and power line communication, PLC. We are classed as an innovative company, always looking at how we can improve. We've got long-range radio as well. Instead of doing 2 or 3 kilometers, we can go to 10 or 12 kilometers, depending on the environment. And we also -- and nobody has taken us up on this year, but we got an in-meter gateway, instead of the gateway sitting on a lamppost or the side of a building, it can now fit inside a meter. So people have to just change their meter to fit that. And that's actually security, and it's also less cost as well to our partners. So we always look at being cost effective as we go forward. And we are excellent in ensuring there's a full end-to-end solution delivered to the utility. And we go the extra mile with some -- I mean some -- I won't mention names, but some large billing companies that have had difficulty on the integration. We've gone in there and helped them do that to integrate our head-end system into their billing system. And we've got some real good Ph.D.s in the company that have got some great know-how and have proven and delivered in difficult situations. We're also -- the applications are focused on really today is electricity. But yes, we can do gas, water metering, EV chargers in all moving to smart cities. And the opportunities, as I mentioned, is 250 million in India alone. And as I said, growing opportunities then in Africa, UAE, Thailand, Sweden and other territories that I've mentioned. So we do have as well, which is really important for shareholders to know that we've got significant orders and backlog, and that's being deployed, as Heather mentioned, another 0.5 million at least to go this year just in India. And that's great, and we're deploying that. And we will meet the end contract date as already committed to those partners and customers. And you can see our pipeline worldwide is $270 million. So you can see that's an awful lot to go at. It won't all happen over this next 12 months. That's spread over the next 2 or 3 years, those opportunities. Some will disappear as they do, but we don't need to work on what information we've got at any given time. And it's important that we have a growing pipeline and continue to ensure we have the right partners going forward. So what we'd now do is we'll open up to some questions. So...

[Operator Instructions] Just while the company take a few moments to review investor question submitted already, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your Investor Meet Company dashboard. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations. John and Heather, I haven't given you an awful lot of time, particularly given we've got a number of questions that have come in the live event, but perhaps I could start off the Q&A with the pre-submitted questions. And thank you, firstly, to all those investors that have taken the time to submit those questions. If I may, the first question reads as follows: It appears EESL have done extensive work on lighting in India. Does CyanConnode expect to be involved in the lighting sector in India going forward?

Yes. Thanks, Mark. So I'll just pick that one up. I mean EESL are heavily and have been heavily focused on lighting, and that's been one of their priorities actually when they started off doing that some years back. We've -- CyanConnode is certainly focused on electricity in India, and we believe a lot has been done in the past by EESL. And we're not really focused on that. I mean if we're asked to bid, we will. But because a lot have been done already by EESL, we don't see that, that's a sort of focus that we have at the moment. But again, if they asked us, then we would do that. But elsewhere in the world, we've had a couple of partners wanting us to bid on lighting, and that's what we do. But there's not a lot in our forecast and our budgets for lighting this coming financial year.

The next question reads as follows: I know the company is doing well with increasing sales of unit and license agreements. When are investors like myself expected to see a dividend being paid?

Okay. I'll pick that one up. Well, the group has no plans to adopt a dividend policy in the immediate future. All funds generated by the group will be invested in the further development of the business as is normal for -- in this industry and companies at this stage of development. There was -- just to pick up one thing as well, just covering a bit on that, seeing one of the other questions earlier was regarding the placing. So I covered all the use of the proceeds of the placing. But I just wanted to say is, while there's a question that said, how is it, given very strong revenues, the company needed further funding, and that came from a placing and not a debt facility as had been issued in the last presentation? So I just wanted to say that the reason why we went for placing as opposed to a debt facility is that we evaluated all options. And obviously, we are a company that is not yet profitable. And the terms that were offered on standard debt facilities were not that great. We were offered a number of convertible facilities, and we did actually discuss this with some of our key shareholders, including institutional shareholders. And most of them felt that in terms -- looking at the terms and the cost of debt in some of these proposals that we had, a placing was actually more beneficial. And obviously, this was done at a premium, and we've gotten some significant shareholders. You would have seen obviously from [indiscernible] and other significant investors that we believe will be very supportive of the company as we go forward.

Next question is as follows: how would the company cope if the R&D rebate was returned by the government?

Okay. I'll pick that up as well. Firstly, I'm not aware of any plans to withdraw. But the other thing that I'll say is that actually, with us getting the R&D tax credits, often, we can't take advantage about the government grants because if -- basically the way the state aid rules work is that if we are using -- if we get certain grants, then we cannot also take R&D tax credits. Similarly, like, for example, the CBILS and some of the government facilities that were provided for the -- during the pandemic, we didn't -- well, first of all, we didn't need to further anybody because we were also busy. And we didn't take any government funds because, for example, CBILS, the way that they were structured, was that if we used -- if we got a CBIL and we took any of that to use towards paying for engineering and R&D functions, then it would mean that we lost R&D tax credits as well. So if, for any reason, the R&D rebate was withdrawn, then obviously, there are other facilities that we can take up that we currently don't take up.

The next question reads as follows: 500,000 connected units per annum was a figure suggested a few years ago that would seek CyanConnode to break even. Has that number been achieved in the past?

So just to clarify one thing on that. I guess the 500,000 was the blended revenue across 500,000 units. As we've explained in the presentation, each contract is made up of modules, gateways, head-end software, annual maintenance charges, support or maintenance and various services. So it would be a blended amount of all of that revenue. And because many of the contracts are still in the initial stages, while we have shipped nearly 500,000 units in last year, the revenue from that, that would have come in would only have been on the modules. And I think the modules make up typically about -- the modules and gateways together are about 60% of the contract. Modules are probably about 50% of the contract. So it's only when we move into the next stage of where we're also seeing the services and move into support and maintenance that we would move into that blended stage where we might see a blended revenue across 500,000 units.

I have a couple of questions from [ Tony Jay ]. The first one reads as follows: current North India and Africa new contracts, I assume, were negotiated in 2021 period. Can we expect to see any similar disclosures during this period that originated in 2021?

Yes. I mean we'll continue to tender and negotiate, and many of these take a number of months to go through a process. Slide 16, which I mentioned, sets out the typical process from tender to award that I went through. So it'd be worth looking at that, Tony, yes.

Next question is, can you give any insights into the IntelliSmart 3 million units that Hardman anticipates as negotiations probably occurred in previous periods?

Yes. I think I did cover that on the slide. But -- I mean there's 8 million, 9 million units with IntelliSmart. And as I say, we're working on the pilot to prove it to their Board of the National Infrastructure Fund and EESL, and then we'll decide on the volumes -- or now we'll decide on the volumes, I should say, of what they'll give to us going forward.

It is anticipated -- sorry, it is now accepted that the Bangladesh order is canceled or any reasons to believe it may be resurrected?

Yes. So -- okay, I'll accept that it is canceled from that point of view. We did say back 31st of October 2019 in an RNS that we had removed this from our backlog. And from -- it's not in any of our forecast or pipelines. We decided to be prudent to do that. We've given those back to the market. Interesting enough, much of the press announcement about smart metering in Bangladesh have not really come too much. I mean there's a lot of confusion with the press announcement out there. I mean you talk about one particular utility called DPDC. The press says that they've got 3.8 million deployed. But actually, it hasn't gone live yet. So that's interesting. Now what we are doing is we're aiming to get a meeting with the Power Minister, Nasrul Hamid, to discuss this. And we're in -- we have been in discussion with a number of people early back in 2020 to progress the opportunity. But actually with -- due to COVID travel restrictions have not been able to meet anyone as yet. So we've still got our eye on our radar. And hopefully, we get another chance to sign up through a partner that ensures that it can be delivered. But Bangladesh is one of them that they have ordered and canceled a number of contracts across the country. And as I say, until we go back and get face-to-face meetings, because of COVID, we can't go there just yet.