Very bad outcome - at an initial glance for impact, the contract value (in terms of revenue) can be gleaned from the annual report. Big customers reported in the 2018 annual report - page 59
"Revenues of $41.3m (2017: nil) and $12.6m (2017: $16.7m) are derived from two single customers of the Company.Each of these separate revenues amounts to more than 10% of the Company’s revenues from external customers."
We know that in 2017 they didn't yet have Mission Providence - so the $41.3m would relate to the Government Jobactive contract
Other big contract is the $12.6m in revenue - this is probably the MHS contract (especially given commentary on lower revenues considering in 2017 it was $16.7m).
Guidance at AGM was for revenue to be steady for the Konekt Workcare business - with a continued soft market (relative to 2017).
To be hit with a loss of revenue this magnitude is going to hurt - they'll need to support the business through to June 30 then make significant cuts. This is on top of the expense with changing the model to "on-base" that were already incurred. Interesting to see who won the tender (perhaps an opportunity to offer similar services as a subcontract to the new provider...but given they likely won with a more competitive offer I suspect margin will be squeezed even further anyway.
Buying Mission Providence may have saved the day long term...the value of the workcare business has potentially taken a very large hit today
