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Inabox Group in a cloud conundrum as Hostworks dampens financials

Hostworks was acquired earlier this year, and has not performed to expectations.
Inabox Group in a cloud conundrum as Hostworks dampens financials
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.

View full IAB profile View Profile

Inabox Group Ltd Timeline

February 20 2017
August 28 2015
November 04 2014

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