Spectra signs $38m manufacturing contract with existing customer

16th Jul 2024 15:41

(Sharecast News) - Spectra Systems, a specialist in machine-readable high-speed banknote authentication, brand protection technologies, security printing, and gaming security software, announced the signing of a $37.9m contract on Tuesday to manufacture sensors for an existing central bank customer.

The AIM-traded firm said an additional tranche of $1.7m was anticipated later in the year on the signing of a related manufacturing contract, bringing the total sensor manufacturing revenue from the new contract to $39.6m.

Revenue recognition for the contract would follow a standard cost accounting basis, with specific progress milestones tied to expenditures.

The majority of the revenue was expected to be realised from the first quarter of 2025 through to the fourth quarter of 2027, with trailing revenue of around $4.5m continuing until 2029.

Spectra said the manufacturing contract margin was projected to yield profits significantly higher than previously estimated.

In addition to the manufacturing contract, the board said it expected to execute a service agreement related to the new sensors with the central bank customer in the first quarter of 2025.

That, it said, was expected to further enhance Spectra's revenue streams and solidify its relationship with the customer.

"This long-awaited contract for the third generation of sensors follows after over $14.8m of development funding by our customer and reflects both the continued need for banknotes as well as the trust our customer has in Spectra Systems," said chief executive officer Dr Nabil Lawandy.

At 1416 BST, shares in Spectra Systems Corporation were down 8.36% at 252p.

Reporting by Josh White for Sharecast.com.