SQS Software Quality Systems : AGM Statement and Trading Update

The Company is trading in line with market expectations through the continued execution of its strategy to geographically diversify its revenue base, to industrialise testing services, and successfully integrate its recent acquisitions.

The Company has won a number of high profile potential Managed Services ("MS") clients, including one of the world's leading US hospitality chains, a leading US financial services group and a retailer based in Europe. MS now accounts for 47% of our total revenue (up from 45% as at 31 December 2014), providing considerable visibility for the remainder of this year.

The Company's expansion into the US market has continued post the 2013 acquisition of Thinksoft, now renamed SQS India BFSI, with the acquisition of Trissential LLC announced in April 2015. As previously stated, the acquisition of Trissential will approximately quadruple the Company's existing onsite delivery capability in the US and is expected to materially add to US segmental revenues during the second half of the current financial year.

SQS' European presence has also been boosted by the acquisition of Italian based Bit Media S.p.A, recently renamed SQS Italia S.p.A., in February 2015, which has a three year order book and provides strong cross selling opportunities for the Company, particularly within the traditional government and tax authorities' industry verticals. Integration of this acquisition has progressed very well.

The global testing services market continues to grow with companies investing heavily in multi-channel sales and delivery processes, offering testing services suppliers opportunities for growth within the digitalisation and mobility segments. At the same time many large corporations face severe margin pressure attracting greater scrutiny of IT costs and increasing price pressure on testing services.

Diederik Vos, Chief Executive Officer of SQS commented: "This year has started well and we are pleased to have further strengthened our position in the US, which is central to our growth strategy. Market fundamentals remain good and, despite continuing competition and price pressure, the start to this year has been encouraging."