Trading Update (4916V)
January 13 2012 - 2:00AM
UK Regulatory
TIDMSQS
RNS Number : 4916V
SQS Software Quality Systems AG
13 January 2012
SQS Software Quality Systems AG
("SQS" or the "Company")
Trading Update
SQS Software Quality Systems AG (AIM: SQS.L), the world's
largest pure play supplier of independent software testing and
quality management services, provides an update on trading for the
year ended 31 December 2011.
We are pleased to announce that revenues for 2011 will be
slightly ahead of consensus forecasts owing, in the main, to a
strong performance from our Managed Services business which
accounted for more than 20% of revenues in 2011.
However, during 2011, we did not recover some additional
transition costs, not expected to exceed EUR2 million, relating to
two earlier Managed Service contracts, which are expected to result
in a PBT below analysts' forecasts for the period. However, these
contracts are now at an improved margin level and we have taken the
full cost in 2011 of transferring these contracts to an optimised
onshore/offshore delivery. We are in ongoing discussions with the
clients to recover at least some of those costs in 2012.
Furthermore, as a result of our ever expanding experience in the
provision of Managed Services contracts, all new Managed Services
contracts closed during 2011 have a better early stage margin and
cash flow profile and we do not envisage incurring any further
additional costs.
As stated earlier, Managed Services order intake has exceeded
EUR62m in 2011 and is in line with our stated strategy of building
the Managed Services business to account for 50% of revenues by
2014. As contracts mature and move offshore the Company would
expect to deliver a far stronger margin performance in the
future.
Despite Gartner recently reducing IT market growth forecasts for
Western Europe for 2012 to -0.7% our strong momentum in building
revenue continues. Overall, traditional project business remained
strong during 2011 with particularly healthy demand in the final
quarter which remained buoyant in all major geographies and
business verticals. However, we will maintain a cautious outlook
and not recruit additional staff unless this is essential to the
business. In addition, average rates for onsite consultancy
services slightly improved in the second half due to our continued
shift to offshore test centres.
Rudolf van Megen, CEO of SQS, commented: "In most respects, 2011
has been a successful year for SQS in which we have again won
market share and have continued to deliver on our strategy of
significantly increasing the proportion of our revenues derived
from Managed Services contracts. We are not satisfied that two
earlier contracts have had a one off impact on profitability, which
we do not anticipate to affect our expectations for the current
year. With further cost saving measures implemented, increased
visibility and order backlog, SQS is gaining the right momentum
from its "Profitable Growth Plan 2014" for an improved future
performance."
Enquiries:
SQS Software Quality Systems Tel. +49 (2203) 91 54 0
AG
Rudolf van Megen, Chief Executive
Officer
Rene Gawron, Chief Financial
Officer
Arbuthnot Securities Tel. +44 (0)20 7012 2000
Antonio Bossi
Paul Gillam
Tel. +44 (0)20 7933 8780
Walbrook PR Limited
Paul Cornelius 07827 879 460/ paul.cornelius@walbrookir.com
Helen Westaway 07841 8917 679/ helen.westaway@walbrookpr.com
About SQS
SQS is the world's largest pure play supplier of independent
software testing and quality management services. SQS consultants
design and oversee quality management processes during the software
and IT systems life cycle and test the resulting products for
errors and omissions.
Headquartered in Cologne, Germany, SQS has approximately 2,000
employees across Europe, Asia, North America and Africa. The Group
has a presence in Germany (Cologne, Munich, Frankfurt, Stuttgart,
Goerlitz and Hamburg), the UK (London, Woking, Birmingham,
Manchester, Belfast), Ireland, the Netherlands, Switzerland,
Austria, Sweden, Norway, Finland, France, India, Egypt, the United
States and South Africa. SQS also has a minor stake in an operation
in Portugal and a partnership operation in Spain.
With more than 5,000 completed projects, SQS has a strong
customer base including 20% of the FTSE-100 companies, more than
half of the DAX 30 and a third of the STOXX-50. It supports clients
in a wide range of industries, including major corporations such as
Allianz, Beazley, BP, Centrica, Daimler, Deutsche Post, Generali,
JP Morgan, Meteor, Reuters, SEB, Siemens and Volkswagen.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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