The Damstra Holdings Ltd (ASX: DTC) share price is firmly in the green during mid-afternoon trade. This comes after the workplace management solutions company announced a multi-year contract extension with NBN Co Limited (nbn).
At the time of writing, Damstra shares are swapping hands for 84 cents, up 3.70%. In comparison, the All Ordinaries Index (ASX: XAO) is sitting at 7,596 points, up 0.9% for the day.
Damstra secures extended partnership
Investors are buying Damstra shares after the company provided a positive update to the ASX this morning.
According to its release, Damstra advised it has signed a multi-year Master Services Agreement (MSA) with its existing customer, nbn.
Under the contract, Damstra will continue to supply its dedicated workforce management platform, enAble to Australia’s national wholesale broadband provider. This will allow over 25,000 workers and contractors nationwide to have access to the specially designed and branded platform for nbn.
The enAble platform can perform a number of functions. This includes storing worker’s skills and competencies, hosting online training, and providing real-time information about nbn accreditations with auditing capability. In addition, the software ensures that all nbn employees and contractors have the required skills to carry out tasks.
Damstra plans to employ digital ID cards which will provide further processing efficiencies, allowing contractors to deliver nbn services faster.
The deal has an initial term of 3 years and includes three 1-year contract extensions (end date up until 2027). Damstra expects the total revenue over the full-life of the contract to generate up to $7 million. This is broken down to $5 million in monthly fees, and a variable $2 million on expected platform usage.
Damstra CEO, Christian Damstra commented:
We are very pleased to announce the signing of this MSA with nbn; already a valued customer of Damstra. We are proud of the work we have put into developing and evolving the enAble platform and this agreement clearly demonstrates the confidence nbn has in Damstra’s ability to provide critical services for their workers and contractors across Australia. We look forward to continuing the relationship with nbn for many years to come.
About the Damstra share price
It has been a turbulent 12 months for Damstra shareholders, with the company’s shares down almost 40%. The downfall began after Damstra reported its disappointing half-year results for FY21 in February.
Damstra has a market capitalisation of roughly $155 million, with approximately 186 million shares on its books.
The post Why the Damstra (ASX:DTC) share price is on the move today appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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