Sign up
Tech Capital

Inabox Group in a cloud conundrum as Hostworks dampens financials

Hostworks was acquired earlier this year, and has not performed to expectations.
Inabox shares are in the slide in morning trade

Inabox Group Ltd (ASX:IAB) shares have plunged 36% to $0.64 in the first 15 minutes of trade, following the company being re-instated after a trading halt.

The financials of the company will be heavily impacted by the Hostworks business, which is a relatively recent acquisition.

Hostworks provides managed cloud-hosting, cloud solutions and co-location services.

Inabox has outlined that the business will perform well below expectations during FY18 and will have a significant negative impact on the company's financial performance for the period.

Why Hostworks

Inabox acquired Hostworks in February 2017 to fast-track the company’s cloud strategy and expand its cloud capabilities and services, which can be cross-sold to its existing 2,000+ managed IT and wholesale customers.

This did not materialise with lower take-up than expected, and other clients transitioning away.

At the time of the acquisition, Inabox estimated that Hostworks would contribute in excess of $21.8 million in revenue, $3.5 million EBITDA and $1.2 million of net profit after tax for FY18.

Inabox now expects that Hostworks will not contribute material earnings in FY18.

Register here to be notified of future IAB Company articles
View full IAB profile View Profile
View All

Related Articles

Telecoms board
"The excellent result for this year was delivered through a combination of strategic acquisition and organic contract wins, maintaining margins on customer contracts and maintaining high levels of operational efficiency."

© tech Capital 2018

Tech Capital, a subsidiary of Proactive Investors, acts as the vanguard for listed tech companies to interact with institutional and highly capitalised investors.
Headquartered in London, Tech Capital is led by a team of Europe's leading analysts and journalists, publishing daily content, covering all key movements in the Technology market.