Nasstar takes nasty tumble after losing large clients

21st Jul 2015 09:44

(ShareCast News) - Shares in Nasstar took an early tumble on Tuesday after the Microsoft reseller and cloud computing services company warned that it had lost two of its largest customers.Despite promising cost and cash control to help reduce the impact of these losses, management said full-year results are now expected to fall short of original expectations despite showing good year on year growth.One client was lost after being acquired having its IT services consolidated into the new owners' operations, while the group's largest customer has taken the "very unique and unusual" step of signed a direct enterprise licensing agreement with Microsoft for its Office and Exchange licensing in July, which means Nasstar retains the customer but no longer receives licensing revenues and margin for Office and Exchange for this particular client.Some good news was unveiled to cushion the blow, with consolidation programs including the merging of the two London offices and progress made on reducing monthly licensing costs associated with the Microsoft product range.The AIM-listed group said it has also become one of "a select few" UK Microsoft partners that have been invited to join the US software giant's Cloud Solution Provider program, helping to differentiate its offering from many competitors."This supplies the group with a tier one agreement to sell Microsoft's cloud offering known as Office 365. The program enables the Group to supply Office 365 on a true flexible per user per month model, with the Group contracting with the end user and retaining full invoicing and support of the customer."A new head of sales was said to be "making good progress" in continuing to develop and evolve the direct go-to-market strategy of the group since joining the business in May, with agreements signed with a further three law firms for its fully managed hosted desktop offering, a significant strategic win in the recruitment sector and three-year renewals from four of its top 30 clients.Shares in Nasstar were down 13.4% to 7.25p by 0835 BST on Tuesday.