Iomart (LON:IOM), the company that hosts and manages the business-critical IT systems of its clients, is on course to beat market expectations of its financial performance this year. In an update ahead of its interim result, the company said that revenues and profits were so far significantly ahead of the comparative period last year.

Iomart is continuing to benefit from the growing trend of organisations seeking to reduce both operational risk and IT costs by moving their mission critical business applications to a trusted supplier. The company said it was differentiating itself from its competitors by actually owning its data centres and network infrastructure, which is not typical in the hosting market. As a result it is able to deliver more services to customers.

The company said it was encouraged by a growing pipeline of opportunities and expected its market to continue to grow significantly as businesses move their critical IT systems to the cloud. In turn, it is continuing to pursue acquisition opportunities in order to accelerate growth. The acquisition of Switch Media, which was completed during the first half of the year, has been integrated into the group and is performing in line with expectations it said. Iomart is due to report its half yearly results for the six months to the end of September 2011 on 29 November 2011.

Angus MacSween, the chief executive of Iomart, said: “There is strong momentum in the business and our pipeline of opportunities is growing. The group’s business model continues to generate high levels of recurring revenues which provides excellent visibility of future earnings and we look forward with confidence to significant growth in the current financial year and beyond.” In an interview with Stockopedia earlier this year, Mr MacSween said that the demand for hosting services represented "a huge opportunity" for Iomart.

In a note to investors, broker Evolution Securities described the performance as “very strong”. It said the hosting market was seeing an extended period of structural growth and Iomart was an excellent investment play on the associated rising volume of data traffic.

Unlock the rest of this Article in 15 seconds

or Unlock with your email

Already have an account?
Login here