That could explain the selloff.... Changes to Cirralto...

That could explain the selloff....

Changes to Cirralto Relationship with Telstra

As part of the recently publicised rationalisation of Telstra’s product offerings to the Australian market, the Company will no longer be participating in the Telstra Digital Commerce programme. The implications of this are still being assessed and while there is no expected impact on any of the current work and success that the Company has achieved in the market to date, this change has resulted in the Company having to issue new engagement contracts to the majority of its customers, to replace previous contracts with Telstra. This has in turn impacted on FY18 revenues and cash flow and consequently the Company will not achieve the previously announced guidance to the market.

The Company expects that the overall effect of this change will be a net zero impact over the term of each customers’ engagement and with potential to see an increase in the value of each customer engagement resulting from the broadened product and service offering given the ability to add hardware solutions to the core Company software solution. In response, the Company has now initiated a new “Go to Market” strategy and is currently in the process of engaging directly with its current customer base and pivoting away from the Telstra model in order to mitigate the impact of this change. The change in strategy will enable Cirralto to significantly broaden the solution offering, supported by a more flexible financing solution for our customer basec