UPDATE: Wynyard signs $3.2m contract, reducing risk of missing 2014 sales target

Shares of Wynyard Group [NZX: WYN], rose 6.7 percent after the security software firm signed a $3.2 million contract with an unidentified national security bureau, which it says reduces the risk of the firm missing its 2014 revenue target.

The contract, providing services to fight organised crime and counter terrorism, was signed on Dec. 31, the last day of its 2014 financial year, allowing some $2.5 million to be recognised that year, the Auckland-based company said in a statement. The deal mitigates the risk of Wynyard missing its 2014 revenue target of $29 million to $32 million, though doesn't eliminate it entirely, it said. The share rose 13 cents to $2.08, the highest since Dec. 12.

"This is an important customer with a growth problem - big data, a rapidly changing network of organised criminals and the need to rapidly surface actionable intelligence to help protect the country's citizens and critical national infrastructure," chief executive Craig Richardson said.

Last month Wynyard warned it might miss its forecast sales if larger contract negotiations extended into 2015, meaning the revenue would be recognised after the 2014 balance date.

Richardson said institutional investors have been supportive of Wynyard's push to attract larger contracts, which can create lumpier revenue, such as today's deal and last month's $1.4 million contract with a European justice agency.

"Those are very credible customers in a community that is pretty demanding in terms of what they expect from a supplier and product," Richardson said. "The deal that we did today is probably five times what a typical deal has been for us in the past and I think there's still considerable upside in terms of what a deal could look like for us in 24 months' time."

Richardson said the company is still working through "quite a few" contracts in "that larger deal size," and expects to update the market on the annual result at the end of January or early February.

"You establish credibility in a market, you build that credibility, you can demand a better price for your product and that solves half your problems," he said. "We've already done that in the Asia-Pac region - this is really the next step in the Europe and Middle East region, and in 2015 we'd hope to do that in the Americas."

Wynyard will launch the next version of its current products early this year, which Richardson said will make the firm "a leader in the big data market."

The company was spun out of Jade Software and debuted on the NZX in 2013, raising $65 million in capital to fund its international growth plans. The crime analytics and risk assessment software is used by the London Metropolitan Police and the New Zealand and Australian police forces, global banks and corporations, and is making inroads into the US market.

(Business Desk)