ASX-listed MOQ Limited has posted a $3.6 million net loss after tax due to “poor” project governance and controls, promoting a refresh in its personnel and processing work.
The losses were revealed following a comprehensive assessment of MOQ’s professional services customer contracts conducted in late 2021, which resulted in a $3.5 million write off from project overruns.
MOQ revealed its plans to raise some $6 million to implement “a range of personnel and processing changes” and “reset” its project management and finance functions.
The $6 million amount was identified through an operational review with an undisclosed independent third party, which was the expenditure needed to improve MOQ’s operational controls and project governance.
“The board has determined that it would be optimal for [MOQ] to procure and use a cash injection of approximately $6 million to enable the company to fully implement a range of personnel and processing changes to reset the company's project management and finance functions and satisfy its general working capital and banking requirements,” MOQ told shareholders in a statement.
“Any lower amount raised between the pre-committed and partially underwritten amounts of $3.2 million and the total entitlement offer of $6 million, will be allocated appropriately based on immediate priorities and is still considered sufficient to cover general working capital requirements.”
In the half-year ended 31 December 2021, MOQ reported revenue of $42.9 million, up 20 percent year over year from $35.7 million, while earnings declined from $4 million in 2020 to a loss of $3.3 million. The $3.6 million net loss meanwhile compared to a $1.3 million net profit after tax the previous year.
The revenue growth was underpinned by MOQ’s ongoing Microsoft partnership and increased demand for cloud technology services. The company also attained Azure Expert MSP certification during the period, joining four other Australian partners and 117 other partners globally.
Looking ahead, MOQ will look to improve its profitability and increase its margins, two of the company’s five strategic initiatives planned for the 2022 financial year that it did not meet during the period. The three that it achieved were growth in services revenue, annuity type revenue and Azure cloud services revenue.