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Summary
- The shares of IDE Group Holdings PLC skyrocketed after it bagged a contract with an existing customer within its partnership channel.
- The IDE Group is to receive services from its partner valuing £22.5 million over the course of next three years under the terms of the contract
The shares of IDE Group Holdings PLC (LON:IDE) skyrocketed on the first trading day of 2021 after bagging a contract with an existing customer within its partnership channel. IDE stocks, which quoted GBX 0.78 in its last trading session on 31 December, surged by 274.19 per cent to GBX 2.90 on 4 January at 12:40 PM GMT after the mid-market network, cloud and IT managed services provider announced that it had signed a new deal.
IDE Group is to receive services from its partner valuing £22.5 million over the course of next three years under the terms of the contract. IDE Group has also been granted the opportunity to extend the agreement to a further two years if the commitment is not fulfilled.
The excellent services that the IDE Group has provided to the partner over the years along with a commitment to reduce the cost of services across the customer base is behind the group getting the new contract.
The LSE-listed AIM-All share stock disclosed that £22.5 million worth services are in addition to the existing £5 million per annum of revenue that has been contracted with the partner.
Andy Parker, the Non-Executive Chairman of IDE Group, said that this contract would further help in enhancing the group’s existing relationship with the long-standing partner.
He added that the contract is proof that the group offers products that are well aligned to customer requirements and continue to believe that IDE is well positioned in the market.
Even though the global pandemic has led to many challenges, the management has stated that the underlying trading for H2 2020 has been satisfactory. The company also announced that it would be publishing the trading update at the end of this month for the year 2020.
How is the AIM stock financially placed?
- The company’s revenue, driven by the impact of the Covid-19 pandemic on the business, had declined to £12.4 million during the first half for the period ending 30 June 2020 in comparison with £14.7 million that was generated in H1 2019.
- Gross profit recorded by the company was £3.1 million (H1 2019: £3.6 million), accounting for an overall gross margin of 24.7 per cent.
- The Group reported a lower adjusted EBITDA of £0.4 million compared to the previous year. The decrease in EBITDA was due to a decline in revenue and gross profit.
- The company witnessed a loss after tax of £3.6 million for the period (H1 2019: £2.9 million).
- The loss per share amounted to 0.89 pence (H1 2019: 0.72 pence).
