Over The Wire reveals major contract hit by "manufacturing and shipping delays"

Telecommunications provider Over The Wire has revealed that a major hardware supply contract had been affected by manufacturing and shipping delays.

In its ASX announcement, the company said it believes the contract will not be delivered before its original target of before 30 June 2021, but said it was working closely with the customer “to ensure a seamless process for completion” of the contract in the near term.

“While any ‘one off’ contract like this will continue to be subject to the challenges of parts and equipment shortages, shipping delays and the like, all exacerbated by the current Covid epidemic affecting all businesses, the company believes that these arrangements remain an important aspect of its business model,” the announcement read.

“These agreements provide us with additional access to very high quality customers, and potential avenues to further bolster the Company’s recurring revenue streams in the future.”

Upon arrival, OTW said the contract is expected to deliver $5 million in revenue and $1.5m of EBITDA in FY22.

The company also revealed some numbers from its upcoming financial report, including revenue of around $122 million, EBITDA of $23.5 million and a 7 percent increase in recurring revenue.

“Our pipeline of signed and potential business remains extremely positive and positions us well to deliver organic growth in FY22 in line with our 15 percent target. This is an exceptional outcome from our team and demonstrates that our Cloud. Connect. Collaborate. offering is delivering the right outcomes for our customers,” OTW managing director Michael Omeros said.

“Our focus remains on building a successful long term business and we continue to invest for growth and in positive solutions for our customers. Some of our recent investments include our tier one voice network, Super Core and international capacity.

"By calendar year end we also plan on having the Digital Sense cloud available in Sydney and Melbourne to take advantage of the continued demand for the cloud.”