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UPDATE - Cloudbuy gaining traction in Australia with gov't contract

Published: 00:50 13 Aug 2014 AEST

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CloudBuy (LON:CBUY) has won a contract in Australia to build an emarketplace for a state government which could be worth up to A$7.2 mln to the firm in time.

The first phase of the contract, for a minimum period of six months, is to implement such an electronic procurement marketplace for the Treasury department and all IT purchasing.

An implementation fee has been agreed and ongoing cloudBuy revenues will be derived via a transactional charge, calculated as a percentage of the value of spend. 

Based on current spend, this could generate a fee of around A$900,000 per year which could in due course rise to a maximum of A$7.2 million a year, cloudBuy said.

The marketplace will be integrated with the State's SAP enterprise platform, enabling electronic invoicing and purchase orders.

Ronald Duncan, cloudBuy chairman, said: "This is the first cloudBuy emarketplace to be signed in Australia and follows our earlier contract wins for spend analytics in this market.  

"It validates our new business model of taking a small percentage of the spend through the system.  It is pleasing to report that there are a significant number of other similar potential customers in the pipeline."

Shares jumped 19% to 37.6p.

 

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