Dubber shares almost halve in value after major contract lost
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The news: Dubber’s share value has almost halved after the call recording software firm announced its subsidiary has lost a contract with UK telecommunications giant VirginMedia O2 (VMO2).
The numbers: Dubber shares were trading 44.74% lower at $0.021 at 11:36am AEST.
The agreement to provide call recording and wholesale SIP services signed between Dubber subsidiary Aeriandi and VirginMedia O2 will not be renewed when it expires on 30 June. This is expected to deliver Dubber a $7 million gross margin reduction if no further mitigating actions are taken.
The context: Overnight, VirginMedia O2 told Aeriandi that it would not renew its contract in response to a formal proposal for an extension it received last week.
Verbal confirmation was sought by Aeriandi after it first learned it had lost the contract from another market participant earlier in the day, according to a statement to the exchange.
Dubber also said it now understands that VMO2 has for some time been using an alternative call recording provider and Aeriandi concurrently, without its prior knowledge, raising potential security exposure concerns.
The company is targeting a return to operating cash-flow run-rate positive by the end of the calendar year.
Last August, Dubber was at risk of insolvency after auditors flagged "material uncertainty" in its full-year results and it issued a correction to previous years' accounts just months after firing its CEO for being involved in the misappropriation of $26.6 million in company funds.
It then launched an equity raise in October to recover some of the missing funds before repaying the Australian Taxation Office in January for historic tax liabilities.
The source: ASX
