An aggressive expansion strategy has delivered a 989 per cent surge in revenue for publicly-listed IT services provider MOQ Limited (ASX: MOQ), along with continuing losses.
MOQ Limited, which relisted on the Australian Securities Exchange (ASX) in June last year after acquiring Technology Effect and Breeze Training, has reported a net loss of $528,406 for the financial year ending June.
However, this represents a 97 per cent lift from the $992,228 net loss it reported for the same period the previous year. The company also recorded negative earnings before tax (EBITDA) of $-546,546, a 45 per cent rise on the previous year’s result of $-992,228.
At the same time, MOQ’s revenue from ordinary activities during the year rocketed to $33.9 million for the year ending June, a 989 per cent increase on the $3.1 million it reported the previous year.
Both the company’s losses and revenue gains are due to its aggressive expansion strategy, which includes multiple acquisitions and consolidation activities.
In its latest financial report, the company told shareholders that it was continuing with its commitment to invest strategically in building out its business model to capitalise on the emerging market for services and solutions in the increasingly Cloud-centric IT market over the next three to five years.
To date, these investments have included the initial merger of Technology Effect and Breeze, which saw the businesses list on the Australian Securities Exchange (ASX) under parent company, Montech Holdings, and the subsequent rebranding as MOQ Digital.
In May, the company completed its acquisition of managed Cloud services and professional services IT company, Tetran Group, in a bid to bolster its managed services capabilities.
Also this year, MOQ acquired education sector software-as-a-service provider, Skoolbag. A move likewise touted as helping to propel the company’s managed services and grow the commercialised IP base of the business.
At the same time, the company has also invested in strategic hires to build out its capability and capacity in sales, delivery, and mergers and acquisitions, with a particular focus on NSW, and the business intelligence and data analytics markets.
The company told shareholders its bottom line was hit by around $1.36 million in non-recurring costs for the year ending June. This includes $400,000 in due diligence and acquisition costs, $164,000 in integration costs, and $306,000 in restructuring costs.
During the June quarter, MOQ embarked on a successful $9 million capital raising effort to fund its acquisition of Tetran and Skoolbag, with the final financial report for the year including the results of these companies from April and May, respectively.
MOQ told shareholders that, looking forward, it expects to see positive cashflow in the first quarter of the 2017 financial year, predominantly in the form of potential new business.