I'm not sure that it should have been marked as market sensitive (or price sensitive), but I reckon they have released it to try to highlight the potential for recurring revenue from maintenance/support contracts. This is not for the sale and/or installation of perimeter intrusion detection systems, because those systems have been in place protecting Sydney Trains’ maintenance centres and stabling yards for more than 10 years. This is a 5 year maintenance & support agreement/contract (@ $100K/year = $500K in total) .
It's chicken feed, but it's more about what this type of contract represents.
I'm thinking back to the second interview that we had with then CEO Rob Broomfield last year - the first interview/meeting was on 8th March and the second was on 7th September, and from around the 25 minute mark Rob talked about their systems being able to achieve Zero Nuisance Alarms, what many people call "False Alarms" but we're talking about stuff blown around by the wind, tree branches moving, or wildlife, or light at night from passing traffic, not people who shouldn't be there. Rob said that he could not and would not make that sort of promise ("zero nuisance alarms") on the sale and installation of a system, but he said if people were prepared to sign up for a three year support agreement(/contract), then he could guarantee that by year 2 or 3 they would be getting zero nuisance alarms. This was being achieved by AVA through machine learning, system refinement, etc., but it takes time and every site has its own issues that need to be addressed - so it takes time to see them occur and then to fix the system so it does not alarm when it shouldn't next time the same thing occurs. So that's what we're seeing here with the Sydney Trains support agreement, and the key sentence in the announcement was the shortest paragraph:
"This agreement is a further example of the Company growing its recurring revenue base via long term relationships with key customers."
So this is not a new customer, and this is not a big contract, but it's what they're trying to achieve, i.e. not just to sell and install systems, but to create recurring revenue streams from multi-year support agreements. And it's with someone we all recognise and who is happy enough for AVA to broadcast the details of the support agreement. AVA have many clients who do NOT want the details of their security systems to be made public, or even who is supplying their systems, which was also discussed by Rob in those interviews last year. They can't always name their clients, and we have seen that the ASX does not like it when companies announce contracts without sufficient details, so I would suggest that if they can't name their clients, they won't announce the contracts - unless they are monster (huge) contracts - like the IMOD contract was a couple of years ago.
Last year, in their own presentations they did disclose the following in terms of their clients and the number of systems they had deployed (this is from the September 7 meeting slides):
Sydney Trains is there on Slide 4 under FFT (Future Fibre Technologies) End Users.
I get that it can be frustrating to get very little news and then see an announcement for such a small contract in dollar terms, however I think the point of the announcement was to highlight the opportunity for recurring revenue over multiple years AFTER a system (or multiple systems) has been purchased and installed.
And they may not get many opportunities to highlight that because of confidentiality agreements they have with a number of their clients.
Disclosure: I hold AVA in my largest real money portfolio as well as here on Strawman. The investment thesis is taking longer to play out than I expected, however I don't think it's busted. I also wasn't too fussed either way about the recent small dividend they declared and paid - it's not particularly material - and they have form for distributing excess cash to shareholders in previous years.