IT services provider, CSG, may suffer pre tax losses ranging between $3 million to $4 million, after the NSW Supreme court decided it must allow customers the choice of signing with Fuji Xerox Australia.
In August, Fuji Xerox issued proceedings against the ASX-listed provider (ASX:CSV) in the NSW Supreme Court to determine whether its relationship termination was valid and the obligations of both parties post termination.
The court matter relates to CSG’s Fuji Xerox contracts in Brisbane and Maroochydore.
Justice McDougall made orders that require CSG to provide the print vendor with signed deeds of novation, which can be forwarded to customers that CSG services in Brisbane and Maroochydore. The integrator plans to appeal the decision and will seek a stay of the orders pending approval.
In a statement to the ASX, CSG indicated that in the worst case scenario, the financial impact could be in the realm of $3m-$4m. It also stated the total number of machines in the field across Brisbane and Maroochydore represented about 10 per cent of CSG's total number of installed machines across the country.
“However, this would only be the case if every customer in Brisbane and Maroochydore consented to the novation in favour of Fuji Xerox,” CSG said. “Accordingly, the impact this could have on CSG’s business will depend on the number of customers who consent to the novation in favour of Fuji Xerox or choose to stay with CSG… any potential impact on its business following the order is unlikely to be material.”
CSG remains a Fuji Xerox dealer in Darwin and will continue to service the products.
The court has scheduled a further hearing in relation to damages and costs.