A three-year managed services deal with hotel operator and apartment developer, Toga Group, has helped to bolster revenues for MOQ Limited (ASX:MOQ) during the quarter ending December 2016.
The multi-year contract sees the cloud systems integrator provide managed services for 70 of Toga Group’s hotels around the world, along with its development sites. The deal also includes data centre operations management.
The company reported $15.9 million in receipts from customers in the December quarter, and $30.9 million for the year to date.
The December quarter also saw MOQ renew a “significant” three-year managed services contract for an unnamed financial services customer, and the company’s deployment of a large retail store application integration professional services project.
Toga Group was among the list of clients claimed by managed IT services and professional services company, Tetran, had long-term relationships with at the time it was acquired for $9 million by MOQ in early 2016, along with Qube, Meriton, Danone, and Rendezvous Hotels.
The company told shareholders on 31 January that the integration of the Tetran business into MOQdigital has progressed well, with a number of back-office functions and roles being consolidated to assist operational efficiency.
“In line with our strategy and commitment to grow our NSW business, the Tetran acquisition has brought immediate scale to MOQdigital’s NSW operations, and together with MOQdigital’s prior year investments in sales and capability, has continued to see accelerated growth in that region,” the company told shareholders.
Meanwhile, the company flagged plans to consolidate the NSW offices of MOQ and Tetran into one premises in the fourth quarter.
At the same time, the company warned investors that the transition of existing managed services customers of MOQdigital to its new integrated business model is progressing at a slower rate than originally anticipated.
“This is primarily due to a strategic decision to bring forward investment in our managed services platform to ensure it meets longer-term capability and scalability needs,” the company said in a statement.
“Additionally, MOQ’s management team is taking a very considered approach to the integration work program, prioritising customer service and satisfaction,” it said.
Looking ahead, the company said that its second quarter activity has continued to “track well,” with strong revenue growth. This is despite moderate operating cashflows stemming from payments for technology deals in Q1 dropping into the second quarter, as well as a seasonal fall in activities towards the end of 2016.
Despite the moderate operating cashlows, MOQ reaffirmed its target revenue for the 2017 financial year of between $50 million and $55 million.
The latest outlook comes almost six months after MOQ revealed a 989 per cent surge in revenue, despite continuing losses.
MOQ Limited, which relisted on the Australian Securities Exchange (ASX) in June, 2015, after acquiring Technology Effect and Breeze Training, reported a net loss of $528,406 for the financial year ending June last year.
On the upside, this represented a 97 per cent lift from the $992,228 net loss it reported for the same period the previous year.
The company's share price was $0.35 at the time of writing.