On 1 February 2019, one of the leading Australian telecommunications provider, Norwood Systems Limited (ASX: NOR) has provided an update on its existing contract with Spark New Zealand. Spark NZ is a New Zealand based digital services provider.
On 7 December 2018 the company has mentioned that the contract is for four years and expected committed upfront payments covering installation and commissioning works and initial development to be supplied by the company for smartphone App software licenses and associated core network software component licenses committed recurring fees for a baseline minimum number of user licenses over the contract period.
The company has now disclosed that these payments are procured from the supply of white label world voicemail apps, world voicemail software and professional services that will deliver a minimum anticipated committed revenue to the company of circa NZD 1.1 million over four years. The company has also mentioned that the anticipated business plan target sales to the company will be circa NZD 2 million over that period.
As stated by Norwood’s Chief Executive officer and Founder Mr. Paul Ostergaard they are thrilled to join hands with Spark NZ, and he also mentioned that they won this contract in the face of strong competition from other well-established telco voicemail vendors. This win validates their technology and delivers an important material new income stream to enhance the company’s business, competitiveness and the value of NOR’s new voicemail platform.
On 31 January 2019, the company had announced its December quarter updates. The company had mentioned that they had signed a SPA (Strategic Partnership Agreement) with ECConnect. Under the agreement, NOR and ECConnect have agreed to establish a framework. Under the framework, the company and ECConnect will co-market each other’s services to their respective customer bases. Both the companies will jointly identify further opportunities for the mutual advantage and benefit. Currently, ECConnect and NOR are working together to establish frameworks for co-marketing activities, finalizing terms and covering all aspects of the partnership, including commercial terms with a target launch date expected within the upcoming months.
Over the past quarter, the company has been developing relationships with two significant telco vendors whose offerings complement Norwood’s World Voicemail solution. Those vendors are Oracle plus one another vendor. The company expects both relationships to evolve into formal partnership structures over the course of this quarter, with very positive discussions advancing in January 2019 to date.
During the December quarter, the company has successfully closed a Rights Issue. The company has raised a total fund of $545,201.30. The existing shareholders were expected to get two new shares for every eleven existing shares held by them at an issue price of $0.005, plus one additional free attaching Option for every one share issued (with an exercise price of $0.008 and this will expire on 31 October 2020).
Looking at Norwood Systems Limited’s stock performance and the return it has posted over the last few months, NOR has generated a negative return of 28.57% during the past six months. The shares of NOR closed the day’s session at its 52-week low of A$0.003, down by 40% (as at 1 February 2019). The company has circa 1.44 billion shares outstanding with the market capitalization of circa A$7.21 million. The 52-week high and low for NOR are marked at $0.020 and $0.003 respectively.
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