Infrastructure and managed services provider Phoenix IT has received notice from two key customers with accounts worth a total of £12.5m that they have made plans to take in house some of the services provided by the company.
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In a newly-released interim management statement, Phoenix IT said the two contracts would terminate in September and November of this year, but the board insisted that it did not expect a material impact on its results for the full-year, which runs until March.
Despite cutbacks in the public sector, the company insisted that the overall trend of market activity levels "remains promising and in line with expectations".
The firm said it saw a slight reduction in its order book, both sales and operating margins held steady at Phoenix IT during the first quarter, which closed at the end of June.
It added that the acquisition of Office Shadow Ltd, acquired towards the end of the last financial year, was now largely complete and integrated into its business continuity unit.
Back in June the company said it would continue to scope out potential cloud acquisitions, and it reiterated an emphasis on "selective acquisitions" in its latest statement.