SQS22 Nov 2012 21:28
Contract wins and business update
SQS Software Quality Systems AG (AIM: SQS.L), the world's leading specialist in software quality services, announces several contract wins and a business update.
The previously announced preferred partnership with Siemens, for the provision of testing services to its manufacturing, predominantly automotive clients, has led to further contract wins. These include three in Europe, one in Japan (which represents a new territory in which SQS is now delivering services) and two in the US. The US is a region of particular strategic focus for SQS given that it is the world's largest software testing services market where there are significant opportunities in high margin software product testing as well as in the automotive sector.
These new contract wins are evidence that the Company's stated strategy of expansion into new territories and increased focus on the manufacturing market, where the Company has deep domain knowledge and technical expertise, is already gaining traction.
Outside of the manufacturing sector, SQS has also won a significant multi-year contract with a major transport infrastructure provider in Switzerland, and a global insurance provider, a multinational consumer goods company and a tier-one bank in the UK. In total these new contracts represent business worth approx. €10 million over two years.
The Company has also won a considerable number of contract extensions and contract expansion orders since 30 June 2012 within the Managed Services business. On an annualised basis, Managed Services now accounts for approximately 35% of total revenue, up from 33% as reported at the 30 June 2012, and in-line with the stated target of 40% by 2014.
The Company also continues to generate significant cashflow which is reducing net debt in line with management expectations. The net debt position is now significantly lower than at this time last year and lower than at 30 June 2012.