DMS announced that it has been selected as a supplier to UGAP – a French public purchasing body – for its Platinum and Optima DRF solutions.

Again, the group puts forward a release that looks positive news. According to management, the agreement signed with UGAP (to be carried out through NGI’s salesforce) could bring as much as €10m in sales for DMS over four years.

Why not. That said, a number of past releases have mentioned or understated big numbers could be reached (including the agreement with NGI in January 2017 or that with UniHA signed in early 2018) with no tangible results so far.

Moreover, there is no commitment for UGAP to buy anything as we understand the agreement.

The figure put forward is only DMS’s estimate of what the agreement could bring.

The other issue is of course the pricing of such agreements (by definition such bodies tend to put pressure on prices) and the fact NGI will take its margins a well.

In short, it remains to be seen if/when volumes go up thanks to this new agreement and, secondly, the kind of margins DMS is able to achieve.

Investors will be happy to wait, we believe, and this all the more since the group’s credibility has been damaged as of late.

We will not change our forecasts, since future sales linked to this agreement are very theoretical so far.