Nice. Cut and paste of the announcement: AVA receives...

Nice. Cut and paste of the announcement:


AVA receives confirmation of Letter of Intent for a major military project

Ava Risk Group Limited (ASX: AVA) announced today that a data network security solution developed by its Technology Division has been selected to protect one of the world’s largest closed user group data networks for the exclusive use of more than one million military personnel.

• A Letter of Intent to manufacture FFT network security technology, under licence, has been issued to Ava Group’s in-country manufacturing partner, SFO Technologies Private Limited (SFO).

• The value of the licence fee is estimated at to be between US$10.5m and US$11.1m (A$14.4m and A$15.2m) and expected to be delivered over a 15 month period.

• While the final value and timing of licence fee revenue to Ava Group are dependent upon final cost of goods and delivery schedules, it is anticipated that approximately US$5.84m (A$8m) revenue will be generated in FY2019 with the remaining revenue expected in FY2020. The LOI estimates that SFO will receive the formal purchase order by the end of September 2018.

• Given the licence fee nature of the project and no working capital requirement, the project is expected to be highly profitable. Moreover, it’s expected that the project win should lead to further opportunities in the secure data network market.

• In addition, there is expected to be additional revenue after the initial 3 year warranty period from a subsequent 7 year spares and maintenance contract, which will be quantified at a later date.

Following an extensive tender process, this award underlines the quality and competitiveness of Ava Group’s data network security solution and its superior ability to locate interference and intrusions on a highly secure data network.

Of importance to the end user, was the implementation of a solution that included ease of deployment and a unique level of enhanced security provided by its real-time early warning of unauthorised access, with no impact on data throughput. This not only improves network efficiency, but also reduces the cost of deployment compared to traditional solutions.

Ava Group Chief Executive, Chris Fergus said that:

“With cybersecurity breaches a seemingly daily occurrence, we are presented with a significant opportunity to expand the application of our intrusion detection technology to the protection of sensitive data network cables.

"Our Ava Group intrusion detection solutions have previously been selected to protect sensitive military, government and utility data networks in the United States, Australia, and the Middle East, providing advance warning of attempted breaches and enables asset owners to quickly take preventative action.

"This project win not only introduces a new major customer to Ava Group, but also provides us with another opportunity to demonstrate the breadth of our risk management solutions into adjacent markets and is further supported by the recent launch of our Cybersecurity Centre of Excellence."

For the purposes of this project, Ava Group has licenced the manufacturing of its FFT technology to SFO, a major in-country manufacturing partner. This manufacturing partner will take on all of the manufacturing cost (and associated working capital) and delivery risk under the award.

The manufacturing partner will pay Ava Group a licence fee for each system supplied for the project, generating estimated revenue of between US$10.5m and US$11.1m (A$14.4m and A$15.2m).

Ava Group Chairman, David Cronin said

"the selection of Ava Group’s FFT technology to protect a large scale telecommunications network is reflective of the growing threat to the worlds data. Government, military and commercial end users are increasingly becoming aware of the potential for illegal tapping, and physical disruption, of their sensitive data.

With an increasing suite of products and risk management services, Ava is at the forefront of this large and growing market segment. This deployment is an important milestone for the Company, showing a clear return for shareholders on the investment we have made in increasing our geographic and market segment reach."