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Adept4 looks at legal options after customer cans contract

The managed services provider is looking at its options after a customer handed it a termination notice

Managing services player Adept4 is looking into legal means as a way of challenging a customer's decision to terminate a contract.

The firm has updated shareholders over the notice of termination for a contract that in its last fiscal year to 30 September 2018 was worth £0.7m.

The firm has warned that the impact of the termination is likely to have an impact on this year's results with a statement warning they could now be, "below the management's expectations". That has already triggered a drop in the share price this morning.

Contracts come and go but the response from Adept4 is going to stir some interest in the MSP channel with the firm choosing to look into its legal options.

"Based on current information, the Company disputes that the contract termination is valid and is therefore considering the legal redress open to it," the firm stated.

The firm generated 70% of its revenues in the last financial year from a recurring customers base and prided itself on its strong customer relationships.

In a statement that accompanied the results for 2018, which were released in February, Adept4 chairman Simon Duckworth, highlighted the way it worked with customers as one of the mainstays of the business.

The firm had also added some more depth to its management team to make sure it could increase the technical and service levels.

"We have improved our levels of service delivery leading to high levels of customer satisfaction, though the investment made in the new sales team has not yet delivered the results we had hoped for." he said.

"Maintaining our strong relationships with existing customers, together with protecting the Group’s cash balances and shareholder value are our key objectives while we explore the strategic options for the Group.," he added.

Read more on Infrastructure-as-a-Service (IaaS)

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