Servicepower Technologies (LON:SVR), the AIM quoted group that specialises in outsourced services and field management, has signed three new contracts worth a total of £2.9 million. The deals include two contracts for the company’s ServiceScheduling software and one contract for its ServiceOperations software-as-a-service platform.
Mark Duffin, the chief executive of ServicePower, said the contract wins were evidence of the momentum ServicePower is currently experiencing in the outsourced services and field management industry. “We are delighted that two long standing customers have chosen to expand their use of our software,” he said. “We are pleased to also welcome a new customer, Steritech, which sees our entry into the food retail market. Steritech has a proven commitment to customer services and we are delighted to assisting them in meeting their customers’ expectations.”
Among the new orders, North America’s leading home appliance retailer and largest provider of home services, has signed an additional software licence, maintenance and support contract for ServiceScheduling. This one-year rolling contract will add GPS tracking into its current ServiceScheduling platform, integrating real time location based services into the decision engine to allow for the more efficient scheduling of service visits by the its engineers.
The contract win with new customer Steritech is a two-year perpetual software, maintenance and support contract for ServiceScheduling and ServiceStats. Steritech is one of the largest outsourced food safety and quality assurance companies in the US. It will use ServiceScheduling to schedule client visits by its consultants to food retail outlets across North America while ServiceStats will provide it with an in-depth view of workforce activity.
The third contract win is with Homeserve (LON:HSV), the international home emergency repairs business, which already uses ServicePower's ServiceScheduling software for the optimisation of its workforce. The new two-year contract (which includes an option for a further extension for an additional three years) extends this licence, and also includes the implementation of the ServiceOperations Software-as-a-Service platform to manage the dispatch of jobs and the payment of claims.
Mr Duffin said: “ServicePower is enjoying a growing momentum in new business, both with existing and new customers, due we believe to having one of the most complete outsourced service offerings in the market, and ServicePower continues to add to its customer base, building revenue visibility for this and future years. We believe…
I have added ServicePower LON:SVR as a stock to my holdings, SVR fits the type of unloved AIM plays with transformational potential that I look for. ServicePower Technologies (LON:SVR) reminds me a bit of picking up Apc Technology (LON:APC) a number of years ago at 6.5p initially, a stock which I still hold today in the 50s. Back in August SVR announced it had executed an expanded contract for its ServiceOperations software with a leading international insurance organisation. The five year contract, in support of its retail and manufacturing warranty business, is expected to deliver minimum revenues over the period of £1m in North America.
The 20th of November trading update was positive and gave some good vibes going forward, with new customers secured in the second half of the year, including several tier 1 appliance manufacturers as well as the North American segment of an international retailer.
With a market cap of ten million, cash in the bank and positive company announcements about the future, I am comfortable to buy and hold to see what 2014 brings for SVR.
20 November Trading Update
The strong growth in revenue in the first half of this year, which showed a notable increase on the equivalent period in the prior year, has continued into the second half with steady performance month by month expected through year end. By mid October, revenue booked to date had exceeded the prior full year revenue of £11.1 million. As at 31 October 2013 the Company had cash balances of £1.7m, following the repayment of a portion of the Company's convertible debt (leaving a balance of approximately £0.8m in principal outstanding) and in advance of collecting the larger maintenance renewals prior to year end. In tandem with driving revenue growth, the management team remains focused on delivering improved operating margins, providing a strong financial footing for the business for it to enter into 2014.
