The positive vibes from software testing and quality management services provider SQS that were apparent in the latter half of last year are still thrumming following the news of a number of major contract, renewals and extensions for the managed services part of the business.
The company has secured deals worth €64m over the next three years. They include its largest contract win (€25m over the next three years to provide managed and specialist services to an existing client in the automotive sector), and its largest contract extension (a €24m managed services deal with a tier-1 European bank over the next two years). It has also bagged another €15m Managed Services renewal with a tier-1 global bank. These deals confirm the momentum around managed services, which SQS was slow to adapt to (see here). Although it has taken its time getting there, the transition is paying off. Order intake for the section during 2012 was €101m, up 52% from 2011. What was missing from today’s update was insight into the impact the deals would have on profit and margins, particularly as one of SQS’s goals is to raise margins. (see here).