Iomart set to beat expectations as hosting market booms

Thursday, Sep 29 2011 by
1
Iomart set to beat expectations as hosting market booms

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.


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iomart Group plc is a holding company. The Company is engaged in providing secure managed hosting and cloud services. The Company operates through two segments: Easyspace and Cloud Services. The Easyspace segment provides a range of shared hosting and domain registration services to micro, and small and medium-sized enterprises (SME) companies. The Cloud Services segment provides managed cloud computing facilities and services, through a network of owned datacenters, to the larger SME and corporate markets. The Cloud Services segment uses various routes to market and provides managed hosting services through iomart Hosting, RapidSwitch, Melbourne, iomart Cloud Services, Redstation, Backup Technology, ServerSpace and SystemsUp. Its products include CloudSure Hosting Solutions, Managed Services, Storage, Network and Control Panel. It provides Infrastructure as a Service platform and EMC Avamar Cloud Backup for LabVantage Solutions, Inc., a global laboratory informatics provider. more »

LSE Price
368p
Change
-0.5%
Mkt Cap (£m)
400.9
P/E (fwd)
17.7
Yield (fwd)
2.3



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