It is hard to find fault in half-year figures from high-tech simulation training specialist SimiGon (SIM:AIM) which falls 7.2% to 35.25p. A real curmudgeon might quibble over lower margin hardware kit that's stripped gross margins from 71% to 65% year-on-year, or the 23% increase in sales and marketing costs, but even so, these are outstanding results.
The important bits are strong revenue growth, managed costs and brilliant cash generation, giving net cash $8.45 million, almost a third of the £16.6 million market value.
'Looking ahead, we have excellent revenue visibility, a strong order book in place and an encouraging pipeline of business leads, which leads us to expect that revenues for the full year will be slightly ahead of market expectations,' spells out chief executive Ami Vizer. That's about as upbeat as an investors might reasonably wish to read.
Underpinning Vizer's optimism are several operational box ticks, not least its vital jump up as a prime contractor. This includes supplying all of the simulated training needs to the entire armed forces of one unnamed South American country, plus June's win (believed to be with a South East Asian nation) that should escalate into a vastly bigger opportunity assuming typical excellence with the initial $6.7 million rollout.
These bigger deals also explain the slightly higher weighting of lower margin kit that pulled back gross margins, something that needs to be watched but is fundamentally a positive for the future.
There's also scope to extend deeper into commercial markets thanks to its Check-6 partnership, first in oil and mining. No wonder finnCap tech analyst Lorne Daniel has upped his shares target price from 40p to 45p.
So why are the shares down, you might reasonably wonder?
Unhelpful City wags usually pitch the droll – more sellers than buyers – response, but there's more to it than that. We also need to put the shares longer-term run into perspective. They've rallied over 23% since the start of the month, 62% over the last three months and have soared 169% in 2013. Whoosh!
We spotted the value early at Shares, first flagging their jet-fuelled profits potential way back in our microcaps cover feature (see page 18 of PDF) almost exactly two years ago at just 4.88p, for a near-650% profit so far, before doing so again as a Play of the Week last October (see page 8 of PDF) at 22.25p.
It would take a steely disposition for any private investor or small cap fund to resist the temptation to top-slice a bit of those sort of profits. But I wouldn't expect anyone to be giving up on the shares for the longer-term, this is far too interesting, and exciting, a growth story.