Recognition Systems Group Plc, the Birmingham, UK-based provider of neural-based customer information systems, has made much of its success in winning its biggest ever licensing deal with US insurance company Aegon USA. Its ideas Solution software is reported to cost around $350,000 for an installation and the company’s first half revenues were 327,000 pounds ($539,550). From this, it may be deduced that Recognition is woefully dependent on a very few large orders, though 15% annual maintenance charges from existing customers will increase over time. Recognition made net losses of 1.3m pounds in the first half, up on the 1.1m pounds recorded in the same period last year. It has 788,000 pounds cash in the bank. Unless, as executive chairman David Bounds believes, several major new customers purchase its software in the next few months, it will have to find a way to raise more money. Analysts are certainly looking for total revenues of two million pounds for the year, well up on the 773,000 pounds reported last time. The shares, drifting at 22.25 pence compared with a year’s high of 56.75 pence are a classic gamble. If the trickle of customers turns into a flood, they are absurdly cheap. However, if customers continue to arrive at the rate of one every six months, the company will be out the lookout for more money. The encouraging news for the company is that customers are less nervous about its software which analyzes large customer databases and finds patterns which enables them to target their marketing more precisely. Previously, customers insisted on extensive trials before pulling out their checkbooks but Aegon did not insist on a pilot project. The company is becoming better known in the US, which now accounts for 93% of its sales.
