Vection Technologies secures trio of contracts across key sectors

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By Imelda Cotton - 
Vection Technologies ASX VR1 virtual augmented reality interface

Perth-based Vection Technologies (ASX: VR1) has entered into three new software contracts across its healthcare, real estate and retail divisions worth $971,000 on a total contract value basis.

The company has executed a $350,000 deal with Italy’s ITS Biomedical Mirandola in the healthcare segment, a $250,000 contract with local developer Edge Visionary Living (real estate) and a $371,000 contract with Germany’s Kiosk Embedded Systems (retail) for a total combined revenue of around $760,000.

Vection expects a gross margin of between 35% and 45% before overhead, finance, depreciation and amortisation and corporate costs are deducted.

It will include limited set-up costs, which may not be repeated if similar future orders are obtained.

Biomedical application

ITS Biomedical is an educational institution in Italy’s renowned Mirandola district highly-regarded for its production of medical devices including equipment and disposable products for therapeutic applications.

Under the terms of the new contract, Vection will provide ITS Biomedical with a selection of its virtual (VR) and mixed-reality (MR) software products on a subscription basis for three years.

The deal will focus on software subscriptions and related professional services and will include a small portion of VR hardware.

The collaboration is expected to align Vection within a vital segment of the biomedical field, leveraging its expertise in VR and MR technologies to potentially transform educational and operational practices within the sector.

Vection said it anticipates recognising approximately $139,000 in contract revenue during the second half of this year.

The remaining $210,000 will be recognised as revenue over the next three fiscal years and will correspond to the annual subscription value for each year.

Advanced smart kiosks

Vection’s contract with German company Kiosk Embedded Systems is for the provision of advanced smart kiosks, including those with an artificial intelligence (AI)-powered 3D digital avatar layer.

The kiosks will be developed for a prominent hotel chain that operates several hundred establishments in various locations.

Vection anticipates the completion and delivery of this project by the end of 2024.

Kiosk Embedded Systems will unveil the prototype of Vection’s modular kiosk integrated with an AI-powered 3D digital concierge at the ITB Berlin Show in March.

Virtual reality experience

The final contract to be awarded in this series was with West Australian apartment development company Edge Visionary Living and will see Vection provide a VR experience to showcase prominent homes in an immersive format.

Vection expects this project will also be completed and delivered by year end.

The contracts with Kiosk Systems and Edge are repeat orders, with Vection having previously completed smaller-scope jobs for each company.

Defence contract

This morning’s release follows on from Vection’s announcement last week that it had secured a $4.9 million defence contract to provide solutions for a non-European government.

The contract is with a technology services provider focused on cybersecurity and infrastructure security solutions for law enforcement, as well as government and security agencies.

While Vection anticipates positive earnings from the deal, the company said the result will likely be considered immaterial to earnings per share this year.