REG - Gamma Communications - Final Results
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RNS Number : 7735X Gamma Communications PLC 24 March 2026
24 March 2026
Gamma Communications plc
Results for the year ended 31 December 2025
Significant growth in line with expectations, driven by strong German
performance. Continuing healthy cash generation.
Gamma Communications plc ("Gamma" or "the Group"), a leading European provider
of business-critical communication technology, is pleased to announce its
results for the year ended 31 December 2025.
Andrew Belshaw, Chief Executive Officer, commented: "2025 was another
successful year for Gamma. We delivered significant growth driven by our
German business, with a resilient performance in the UK, where we are pleased
to have won a number of blue-chip customers, despite the challenging
macroeconomic backdrop. These results reflect the disciplined execution of our
strategy and the strength of our highly cash-generative business model. We
continued to expand our portfolio of business-critical solutions, including
the launch of "Webex for Gamma" which has been our most successful UK product
launch ever.
"The nature of our cash generative business model means that in 2025 we were
able to both invest in our business and return £64m to shareholders. We
intend to continue to return substantial amounts of cash to shareholders
through FY 2026 and FY 2027, balancing investment in organic growth with
enhanced cash returns.
"Although the UK SME market headwinds remain, it now forms less than half the
Group and we are well positioned when conditions improve. Our strategy,
supported by our increased scale in a growing German market, an improving
Enterprise sales pipeline and the future growth potential of our Service
Provider business, positions Gamma well for years to come."
Year ended 31 December
2025 2024 Change (%)
Revenue £645.8m £579.4m +11%
Gross Profit £348.2m £300.3m +16%
Gross Margin 54% 52%
Adjusted EBITDA(1) £141.7m £125.5m +13%
Profit before tax ("PBT") £87.7m £95.6m (8%)
Adjusted PBT(1) £119.4m £111.9m +7%
Earnings Per Share ("EPS") (fully diluted) 69.3p 72.0p (4%)
Adjusted EPS (fully diluted)(1) 94.5p 85.1p +11%
Total cash returned to shareholders £64.0m £44.6m +43%
Adjusted cash generated by operations(1) £131.8m £120.4m 9%
Adjusted cash conversion(1) 93% 96%
Net (debt)/cash(1) (£9.3m) £153.7m NM
Key highlights
Significant growth across key financial performance metrics
· Group results underpinned by a strong performance from our recent German
acquisitions, and delivered despite the challenging UK macroeconomic backdrop.
· Recurring revenue(2) remains high at 89% (2024: 89%).
· Return on capital employed ("ROCE")(1) was healthy at 27.8% (2024 pro forma:
27.4%).
· Adjusted EBITDA increased by 13%; Adjusted EPS (fully diluted) increased by
11%.
• Gamma Germany increased gross profit by 197% to £78.4m (2024: £26.4m), led
by our acquisitions of Placetel in September 2024 and Starface in February
2025. Under our first year of ownership, they delivered double digit revenue
growth(3) in FY 2025 and improved Group gross margin by 2% to 54% (2024: 52%).
• Gamma Business gross profit declined by 2% to £190.8m (2024: £194.7m).
• UK SME delivered a resilient performance. Cloud volumes increased despite the
challenging UK business environment. Expected headwinds due to the impact of
the PSTN switch off in early 2027 reduced FY 2025 gross profit by a net
c.£4m.
• Service Provider⁴ continues to expand globally, recently launching services
across APAC; calling services are now available in c.27 countries, making
Gamma one of the top global providers.
• Gamma Enterprise gross profit was £60.3m (2024: £60.2m) with competitive
ethernet pricing pressure offsetting the positive impact of our BrightCloud
acquisition in July 2024. We entered the current year with momentum following
several notable wins for implementation during 2026, including the RAC, Bosch,
Zigup plc and Safestore plc, and a substantial extension with WM Morrisons.
These wins reflect our competitive proposition, effective go-to-market
strategy and high levels of service.
Continued balance sheet strength
· Adjusted cash generated by operations increased 9% to £131.8m (2024:
£120.4m). Adjusted cash conversion remained strong at 93% (2024: 96%) and
with closing Net debt at 31 December 2025 of £9.3m (2024: Net cash
£153.7m). This was after total outflows of £216.2m for the acquisition of
Starface in February 2025 for £152.2m, returns to shareholders through the
share buyback of £45.1m in H1 2025 and the payment of £18.9m of
dividends in the year.
· In January 2026, we announced an intention to launch further share buybacks
during FY 2026 and FY 2027. When combined with the Board's intention to pay a
dividend per share fixed for FY 2026 and FY 2027 at FY 2025 levels, this would
represent an aggregate return of up to c.£125m of cash to shareholders in
total over the two-year period.
Substantial progress delivering strategic priorities
· Integration of Starface acquisition progressing well.
· 2025 restructuring completed, saving £7m p.a. of ongoing UK operating costs
from FY 2026 with an associated restructuring cost of £3.3m treated as an
exceptional item in FY 2025.
· Successful launch of Cisco's "Webex for Gamma" in the UK SME market in Q4 2025
- supported by our Cisco top-tier Preferred Partner status. "Webex for Gamma"
seats have grown to c.20k from a standing start in the UK.
· Move to the Main Market of the London Stock Exchange completed in May 2025,
with inclusion in the FTSE 250 index from June 2025.
Outlook
The Board expects FY 2026 financial performance to be in line with market
expectations, with Adjusted EBITDA and Adjusted EPS (fully diluted) within the
consensus range.⁵
Notes
1. See section "Alternative Performance Measures".
2. Recurring revenue being revenue which is recognised "over time" as per note 3.
3. On a proforma unaudited historical GAAP basis against 2024.
4. Gamma's Service Provider business provides numbering, Voice and SMS
capabilities in c.27 countries for large, global communications platform
providers who do not have their own telephone networks.
5. Company compiled range is based on known sell side analyst estimates. The
current consensus range for full year 2026 Adjusted EBITDA £138.0m - £144.6m
and Adjusted EPS (fully diluted) 90.0p - 96.6p, as at 23 March 2026
Enquiries
Gamma Communications plc Tel: +44 (0)333 006 5972
Andrew Belshaw, Chief Executive Officer
Bill Castell, Chief Financial Officer
Jennifer Shaw, Group Communications Director
Investec (Joint Broker) Tel: +44 (0)207 579 5970
Patrick Robb / Virginia Bull
Peel Hunt (Joint Broker) Tel: +44 (0)207 418 8900
Neil Patel / Benjamin Cryer / Kate Bannatyne
Teneo (Financial PR Adviser) Tel: +44 (0)207 353 4200
James Macey White / Matt Low / Ollie Simmonds Gamma@teneo.com
About Gamma
Gamma is a leading European provider of business-critical communications
technology. Our extensive channel partner network connects major technology
vendors with hundreds of thousands of SMEs, and we deal directly with large
corporates and the public sector. Gamma combines its proprietary solutions
with leading third-party cloud platforms, its own telecoms network and a high
quality of service, to help customers communicate and collaborate more
effectively.
Our broad and expanding portfolio - including cloud communications software
(telephony, messaging, video, AI-driven customer experience), calling and
network connectivity (including security) - enables customers of any size to
deploy end-to-end communications and IT solutions via a single provider.
In mainland Europe, Gamma has its largest presence in Germany, delivering
services to SMEs through both partners and its own self-service digital
platform, and is recognised as one of the country's leading cloud
communications providers.
Gamma Business serves UK SMEs via an extensive network of over 1,500 channel
partners and its Service Provider business provides international calling
capabilities for global communications platform and service providers.
For larger corporate and public sector organisations, Gamma Enterprise engages
directly to design and support complex, integrated communications solutions.
With over 2,000 employees, Gamma is a FTSE 250 company listed on the London
Stock Exchange (ticker: GAMA). More information can be found at: gammagroup.co
Cautionary Statement
Certain statements in this Full Year results announcement are forward-looking.
Although Gamma believes that the expectations reflected in these
forward-looking statements are reasonable, we can give no assurance that these
expectations will prove to have been correct. Because these statements contain
risks and uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements. We undertake no
obligation to update any forward-looking statements whether as a result of new
information, future events or otherwise.
Management and Financial Overview
2025 was another successful year for Gamma. We delivered significant growth,
driven by our German business and continued resilience in the UK, despite a
challenging macroeconomic backdrop.
Our increased scale across Europe, expanded product portfolio and the
disciplined execution of our strategy have significantly strengthened the
Group, supported by a continued focus on service quality and go‑to‑market
execution. The completion of the Starface acquisition marked an important step
in our shift to a genuinely pan‑European business, alongside actions to
streamline the organisation and strengthen the long‑term resilience of the
business model.
During the year, Gamma moved to the Main Market of the London Stock Exchange
and, from June 2025, entered the FTSE 250 Index. We returned significant cash
to shareholders and expect this to continue through 2026 and 2027, balancing
investment in future growth with our commitment to deliver enhanced
shareholder returns.
Thank you to our employees for their hard work and commitment throughout the
year, including the integration of our largest acquisition to date, navigating
the challenging UK trading conditions, and delivering key customer and partner
projects across the Group.
Revenue increased by 11% to £645.8m (2024: £579.4m) and gross profit by 16%
to £348.2m (2024: £300.3m). This significant growth was driven by our German
business, in particular our acquisitions of Placetel and Starface. Under our
first year of ownership, they delivered double-digit revenue growth*. Our UK
performance was resilient despite the challenging UK business environment. As
expected, the UK SME component of Gamma Business was impacted by headwinds
ahead of the PSTN switch-off in January 2027 which reduced gross profit by a
net c.£4m, while Gamma Enterprise experienced near-term competitive ethernet
pricing pressure which reduced gross profit by c.£2m. Together these reduced
UK gross profit by approximately £6m in the year. Following a review of the
efficiency of our UK operations, we completed a restructuring programme in H2
2025 that will deliver annual operating expense savings of £7m from FY 2026.
Adjusted EBITDAgrew by 13% from £125.5m to £141.7m. It grew at a lower rate
than gross profit, as while Starface and Placetel have higher gross profit
margins than the existing Group, they structurally have higher operating
expenses.
Adjusted PBT increased by 7% from £111.9m to £119.4m. This reflects the
£4.2m reduction in interest income and £3.5m increase in interest expense
after we used a significant portion of our cash holdings and a drawdown on the
RCF to fund the acquisition of Starface in February 2025.
Profit before tax decreased by 8% from £95.6m to £87.7m primarily because of
£10.6m (2024: £Nil) of exceptional costs incurred in the year and an
increase in amortisation of intangibles arising due to business combinations
following the Starface acquisition. These exceptional costs were previously
highlighted and comprised our costs to acquire Starface of £5.1m, the one-off
costs incurred in our move to the Main Market of the London Stock Exchange of
£2.2m and costs of £3.3m incurred in completing the UK restructuring in H2
2025.
Adjusted EPS (fully diluted) increased by 11% from 85.1p to 94.5p. This
increase was driven by Adjusted PBT growth as above, supplemented by a 4%
benefit from the reduced share count following the share buybacks in 2025 and
2024. EPS (fully diluted) decreased by 4% from 72.0p to 69.3p, reflecting the
fall in profit before tax of 8% partially offset by the 4% benefit from share
buybacks.
* on a pro forma unaudited historical GAAP basis against 2024.
Market and strategy update
Gamma provides essential business communications technology across Western
Europe, enabling organisations of all sizes to connect and collaborate
effectively. Our portfolio supports businesses as they modernise their
communications infrastructure - from cloud communications for SMEs to secure,
complex networking solutions for larger enterprises - providing reliable,
flexible platforms for today's digital environment.
Our solutions cover three core categories:
· Calling: Our telecoms network enables businesses to make and receive external
voice phone calls, including the ability to voice-enable third-party platforms
such as Zoom, Microsoft Teams and Amazon. For businesses with operations
overseas, Gamma operates as a global service provider, supplying phone numbers
in c.27 countries to support reliable, compliant global calling.
· Cloud Communications: Cloud communication solutions bring voice calling,
video, messaging and customer contact tools together in one easy-to-use
platform, accessible from anywhere. We provide our own technology (such as
PhoneLine+ and Starface) for the SME market as well as leading enterprise
platforms from partners like Cisco, Ericsson-LG and Amazon.
· Connectivity: Modern voice and cloud services depend on strong, secure data
connections. Through partnerships with major network operators, we deliver the
broadband, ethernet and mobile access that businesses rely on.
Market trends
Demand for modern, resilient communications solutions remains strong as
organisations adopt cloud-based platforms, upgrade connectivity and invest in
technologies such as AI, automation and cybersecurity. Gamma sees AI as an
enabler. We are using AI to improve operational efficiency internally and for
partners, to enhance customer service and security, and to accelerate product
development. We are also embedding AI‑enabled solutions across our
portfolio, leveraging leading hyperscaler technologies that deliver real ROI
for partners and end users. The telecoms industry relies on physical
infrastructure and regulatory frameworks that AI cannot replace, and our
extensive channel‑partner relationships further strengthen this foundation.
In previous reports, we highlighted a number of structural market trends that
we believe will drive Gamma's growth over the medium term. These themes remain
firmly intact and, over the past year, have continued to develop in ways that
reinforce our confidence in the long-term opportunity across our core markets.
Ongoing migration to cloud communications - a primary driver of Gamma's growth
Gamma provides cloud communications solutions for businesses of all sizes,
combining its own platforms with leading third-party services, and extending
popular collaboration tools such as Microsoft Teams, Google, Amazon and Zoom,
with secure voice calling. Cloud platforms help companies to reduce
complexity, improve reliability and enable flexible working, while avoiding
the costs and maintenance of on-site communications hardware.
In Germany, where cloud adoption remains at an earlier stage than the UK, our
product portfolios from our recent Placetel and Starface acquisitions have
expanded our reach, and support the shift from legacy hardware to
higher-value, long-term cloud subscriptions with higher recurring revenue. We
are well positioned for significant long-term growth in a large,
underpenetrated market.
In the UK, cloud adoption is more advanced. We continue to migrate customers
from legacy telephony to higher‑value cloud services across both our own
platforms and third‑party solutions such as Cisco Webex. As the market
matures, growth is increasingly displacement-led and pricing remains
competitive. As a result, growth in cloud user numbers is likely to be broadly
offset by lower average margin per user ("AMPU"). To support future margin
improvement, we continue to expand our portfolio of value-added services and
to deliver more end-to-end managed services for larger organisations and
partners.
The Coolwave acquisition in 2024 extended Gamma's international footprint,
supporting voice and messaging services for service providers and
hyperscalers, and creating further partner-led growth opportunities,
particularly in APAC from 2026.
Customer experience ("CX") is an increasing focus for organisations
Part of the transition to cloud communications is driven by increasing
consumer expectations of the services they receive from businesses. In
response, businesses are increasingly prioritising CX, recognising its impact
on customer loyalty, revenue and operational efficiency. This is driving
demand for cloud-based contact centre platforms ("CCaaS"), which bring
together voice, email, webchat and other channels into a single, flexible
solution. These platforms enable organisations to respond faster to customer
needs, scale more effectively and harness AI‑driven automation and
personalisation to deliver higher‑quality service. While CX currently
represents a small proportion of our portfolio, Gamma's products - including
enhanced AI capabilities - support both small businesses and larger
enterprises.
Full-fibre connectivity is a structural trend
High‑capacity, reliable internet access is now essential for modern business. As more applications and services move to the cloud, and hybrid working and AI-adoption increases data usage, demand for full‑fibre connectivity ("FTTP") continues to rise. Full‑fibre replaces traditional copper lines with fibre‑optic infrastructure, delivering faster speeds, lower latency and improved reliability - all critical for cloud services, video collaboration and the growing use of AI.
The UK's transition from the old analogue phone network to digital, IP‑based voice services by January 2027 - known as PSTN switch-off (Public Switched Telephone Network) - is accelerating the shift from copper to fibre. While full‑fibre offers faster, more reliable service, it carries a higher unit cost for Gamma than legacy copper. As a result, the migration of customers ahead of the switch‑off is creating a one-off gross profit headwind that is dependent on the pace of customer migration, with the full-year financial impact of 2026 migrations expected to be felt until the end of 2027. The headwind will cease once all customers have transitioned.
Gamma is seeking to mitigate this reduction in gross profit by actively capturing market share through structured migration programmes that move customers from legacy copper to fibre efficiently, and through our FibreXchange platform, which simplifies customer access and migration to the fragmented UK fibre market. As the fibre market continues to grow, these combined activities are expected to lead to medium-term connectivity gross profit improvement, once copper withdrawal is completed.
In Germany, while the move from the analogue to the digital phone network happened some time ago, connectivity remains largely on copper lines. Full‑fibre coverage remains relatively limited and fragmented, but is expected to expand, supported by government initiatives and operator investment. While connectivity is currently a small part of our German business, we are exploring ways to maximise this opportunity through partnerships with major local providers or via selective acquisitions.
International expansion of hyperscaler platform communications
As large technology platforms, such as Microsoft Teams, Amazon and Zoom, continue to grow internationally, they require communications partners capable of delivering consistent, compliant voice and messaging services across multiple countries. Only a small number of providers have the scale, regulatory expertise and operational capability to support this effectively. Through its Service Provider business, Gamma is well positioned to meet this demand, providing voice‑enabled, compliant services and multi‑country solutions for its international platform partners.
In addition to supporting global platform providers, Gamma's capabilities also address the needs of multinational enterprises seeking to simplify their communications estate, consolidate suppliers and ensure consistent service quality across geographic regions. Gamma's ability to deliver compliant, scalable solutions across multiple countries positions it as an attractive partner for enterprises looking to streamline their global communications footprint.
Cybersecurity is a critical requirement for businesses
The increasing use of cloud-based services and the growth of data stored in
the cloud, have elevated the risk of cyber threat disruption for all
businesses. Cybersecurity resilience investment continues to grow across
businesses of all sizes as threat levels increase. Gamma's security
capabilities provide enterprise‑grade protection in a simple, scalable way.
Gamma currently provides cybersecurity products to a number of its enterprise
customers and this will increasingly be extended to SMEs.
Adoption of the Internet of Things ("IoT") continues to expand
IoT lets devices like sensors, vehicles and equipment connect to the internet
to share data in real time. This helps organisations work more efficiently,
reduce risks and costs, and make better decisions. Adoption is accelerating as
faster mobile networks and smarter data tools make it easier to use. A recent
entrant to the IoT market, Gamma's Fusion IoT platform and embedded SIM
("eSIM") technology offer simple, reliable solutions that help businesses get
the most from connected devices.
Taken together, these trends continue to shape demand across our core markets
and support our confidence that the current UK SME headwinds are cyclical
rather than structural. Gamma's differentiated portfolio, strong partner
relationships and continued investment in technology innovation leave us well
positioned as market conditions improve.
Strategic Priorities
Gamma's strategy remains focused on strengthening our position as a leading
provider of business communications solutions across Western Europe. Five
strategic priorities guide our approach:
1. Migrate customers to modern platforms
2. Grow the core business
3. Expand into adjacent markets
4. Enhance operational efficiency
5. Deliver exceptional customer service
Together, these priorities position us to capture market growth opportunities,
supported by a robust business model and disciplined capital allocation, as
well as skilled, committed people. Our commercial model is based largely on
subscription contracts which have high rates of renewals. This means the Group
has high recurring revenues of 89% (2024: 89%) and high levels of cash
generation (93% cash conversion in 2025 (2024: 96%)).
1. Migrate customers to modern platforms
The PSTN switch-off in the UK is scheduled for January 2027. Our operational
focus is to ensure that existing customers migrate to Gamma's core modern
platforms, ensuring they remain with us as their technology needs evolve. In
addition, there is the continuing migration of hardware on-premise users in
the UK, with customers who have been using Gamma SIP - the internet‑based
method that connects on‑premise phone systems to the public telephone
network - able to move to our Cloud Communications or our voice-enabled
Calling products (such as Microsoft Teams).
2. Grow the core business
Business communications are becoming more complex, combining voice, video,
messaging, collaboration tools, AI and customer relationship management
systems. Gamma's core strength is enabling organisations to adopt and manage
these technologies in a simple, secure and scalable way.
We continue to invest in new product development and delivery, broadening our
core customer proposition to offer a comprehensive suite of cloud-based
communications solutions for organisations of all sizes across Europe - from
micro‑businesses to large enterprises. These are delivered through our own
platforms and in partnership with leading global technology providers,
including Cisco, Microsoft, Amazon and Ericsson‑LG, whose products we adapt
to meet the specific needs of our customers. By integrating these solutions
with our telecoms network and service portal, we simplify deployment and
management, increase cross-sell and up-sell opportunities, improve margins and
deepen long-term customer relationships.
Our pan‑European portal architecture streamlines partner ordering and
provisioning and allows new devices to be added within hours (previously
days). Gamma Plus, our new approach to launching new value-added services,
enables faster delivery of margin-accretive, add-on products. During the year,
we launched standalone AI voice agent products in the UK and Germany, and are
further developing AI in our products. These upgrades simplify and reduce the
cost of product adoption, strengthen loyalty and increase share of customer
spend.
In Germany, we expect continued double-digit revenue growth as businesses
transition from on-premise systems to the cloud. We are well positioned to
capture this shift by scaling Starface through our channel partners and
Placetel through our direct online model.
The successful launch of Cisco's Webex cloud communications platform in the UK
further strengthened our position across all customer segments. As the UK
market consolidates, we see opportunities to acquire substantial customer
bases from exiting providers, strengthening our scale and reinforcing our
market position.
Across Europe, we see further opportunities to roll out Cisco's Webex as well
as in full-fibre connectivity and the growing demand for IoT solutions.
3. Expand into adjacent markets
We are extending our capabilities into new geographies and services, focusing
on organic growth with selective accretive M&A as appropriate.
Within Gamma Business UK SME, we are expanding our Managed Service offer to
provide customer service, first‑line support and operational services on
behalf of certain Channel Partners. This creates a new revenue stream while
strengthening partner relationships and expanding the value we provide. We
will also grow our higher-margin value-added solution set, including AI
Agents, IoT and cybersecurity, to increase share of wallet and customer
loyalty.
Our Service Provider business provides numbering, voice and SMS capabilities
for large, global communications platform providers who do not have their own
telephone networks. Supported by structural demand and largely insulated from
UK SME market headwinds, the continued international rollout of our Service
Provider capability remains an important growth driver. We now offer fully
compliant phone numbers in around 27 countries and are working to expand this
further. This global capability enables us to support customers with
international operations and generate additional revenue streams beyond the UK
market, including our recent expansion into APAC.
We are expanding Placetel, our German digital-direct business, into the
Netherlands and Austria, and in Gamma Enterprise our multi‑country
capability will allow us to scale across Europe.
Globally, we see further opportunities developing our Microsoft proposition
and launching new mobile services through digital and Mobile Virtual Network
Operators ("MVNO") models.
4. Enhance operational efficiency
Operational efficiency remains an important focus for Gamma and our customers.
We will continue to review our UK and German operating models and cost base
while protecting the investment required to capture growth opportunities.
Increased use of automation and AI will reduce our costs and improve customer
experience, by simplifying their purchase and provisioning journeys.
For customers, our cloud platforms reduce the need to maintain complex
on-premise systems, lowering operational overheads. For partners, our portal's
self-service and automation features streamline how they can interact with our
solutions. Data-driven insights from Gamma Edge, our partner experience
programme, are already informing improvements to order journeys, reducing
friction in key support workflows and strengthening onboarding. All of this
helps partners operate more effectively and deliver better outcomes.
5. Deliver exceptional customer service
Across all routes to market, we remain focused on delivering consistently
high‑quality service that supports retention, strengthens partner
relationships and underpins our recurring revenue model. Our regulated calling
infrastructure, secure connectivity and operational support all ensure
reliability at scale. We continue to simplify deployment and management
through enhancements to our portal, improving the experience for partners and
end users. Targeted investment in our people and customer‑experience
programmes will further reinforce service quality and operational resilience.
These five strategic priorities provide a clear and disciplined framework for
the Group as we continue to expand our portfolio, grow our presence across
Europe and strengthen operational efficiency.
Business Unit performance
Business unit share of Group gross profit
Gamma Germany
Gamma Germany serves over 75,000 SME customers with a comprehensive product
portfolio of cloud communications platforms, on-premise calling, connectivity
and IoT products. Delivered through multiple routes to market, including a
partner network of c.4,500 partners and our digital channel in Placetel, Gamma
Germany now accounts for nearly a quarter of the Group, at 23% of Group gross
profit (2024: 9%) following our recent acquisitions of Placetel and Starface.
2025 2024 Increase
£m £m
Revenue 110.2 54.3 +103%
Gross Profit 78.4 26.4 +197%
Gross Margin 71.1% 48.6%
Overall growth in Germany was significant, led by our acquisitions of Placetel
and Starface, acquired in September 2024 and February 2025 respectively. Both
performed strongly, increasing cloud seats (to c.600k) and under the first
year of our ownership they delivered double-digit revenue growth*: this was
despite an ongoing weak macroeconomic backdrop. Organic gross profit growth
was 11% on a constant currency basis, of which 8% was driven by Placetel's Q4
2025 trading which was organic given its acquisition in September 2024. The
remainder reflected continued growth in higher margin cloud services partially
offset by lower renewals in certain low margin Calling products. Gross margin
increased significantly as Starface and Placetel generated meaningfully higher
gross margins than our existing German business, as neither incurred
significant third‑party licensing cost for their products and currently do
not sell mobile through their channels which is at lower margin.
The acquisitions of Placetel and Starface have given us the necessary scale -
and around a 15% cloud seat market share - to establish Gamma as the leading
challenger in Germany, Europe's largest business communications market, and
one where cloud adoption remains at an early stage. Integration is progressing
well, with a single German management structure and a country-wide sales team,
bringing together our existing German business with Starface with a unified
approach to Channel Partner sales.
* on a pro forma unaudited historical GAAP basis against 2024.
Gamma Business
Gamma Business comprises our UK SME and Service Provider businesses, and
accounts for 55% of Group gross profit (2024: 65%).
UK SME - accounting for 42% (2024: 51%) of Group gross profit - sells a broad
range of Calling, Cloud Communications and Connectivity products that support
small UK businesses typically with fewer than 250 employees.
Service Provider - accounting for 13% (2024: 14%) of Group gross profit -
provides Calling products (voice services, numbering and SMS capabilities) in
c.27 countries for large, global communications platform providers, network
operators and Mobile Virtual Network Operators who do not have their own
telephone networks.
2025 2024 Increase
£m £m
Revenue 374.6 368.9 +2%
- UK SME 282.4 278.5 +1%
- Service Provider 92.2 90.4 +2%
Gross Profit 190.8 194.7 (2%)
- UK SME 146.5 151.6 (3%)
- Service Provider 44.3 43.1 +3%
Gross Margin 50.9% 52.8%
UK SME - delivered a resilient performance despite challenging UK market
conditions. Cloud volumes increased, supported by continued growth in our
cloud communications portfolio, although gross profit declined by 3%. This was
primarily due to expected one-off headwinds ahead of the PSTN switch-off in
early 2027 (which includes the impact of customers migrating from higher
margin legacy copper products to lower margin fibre replacements), which
reduced gross profit by a net c.£4m. We estimate that gross profit will be
further reduced by a similar amount in FY 2026, with the full-year financial
impact of FY 2026 migrations expected to be felt until the end of FY 2027,
depending on the speed of customer migration. Gross profit was also impacted
by a slight decline in other traditional voice traffic, which was partially
offset by higher cloud volumes and inflationary price rises.
Despite these headwinds, product volumes and customer engagement remained
strong. Our broader portfolio - including the lower‑cost PhoneLine+ solution
- helped us maintain market share. The successful UK launch of "Webex for
Gamma" in Q4 2025 further strengthened our position and, since the October
launch, we already have nearly 20,000 seats from a standing start in the UK.
We continue to attract Channel Partners wanting long‑term, strategic
alignment and, to maximise opportunities created by migrations, we are
offering a fully managed end-to-end migration service:
· Flotek transitioned its cloud and connectivity portfolio to Gamma through our
Gamma Edge programme, adopting Webex as its core application to enhance
customer value.
· Clear Business signed a landmark agreement for Gamma to provide a fully
managed connectivity and voice service to their end users on an outsourced
basis.
· Our long-term partnership with O2 Daisy enables Gamma to sell our products and
services into their c.500,000 customer base. The partnership also sees Gamma
take over the voice enablement of O2 Daisy's cloud communication platform,
giving both organisations a clearer strategic focus.
These partnerships demonstrate our ability to deliver complex, high‑value
deals and long‑term, scalable growth.
Service Provider - now contributes 25% (2024: 21%) of revenue and 23% (2024:
19%) of gross profit in Gamma Business. It saw healthy growth in Calling
products leading to a 3% increase in gross profit, benefitting from structural
demand and remaining insulated from UK SME market headwinds. While to date
most of its revenue has been generated in the UK and Ireland, we are also well
positioned internationally to meet the demand of global platform providers and
multinational enterprises who seek to streamline their global communications
footprint, as we now offer Calling products in c.27 countries, and in Q1 2026
we launched services in the higher‑growth Asia-Pacific region (starting in
Australia, Singapore and the Philippines). This enables global communications
platforms and service providers to access compliant calling capabilities
locally without becoming licensed telecommunications operators or building
their own infrastructure.
Gamma Enterprise
Gamma Enterprise sells cloud communications platforms (including contact
centre solutions), connectivity, mobile, security and complex managed networks
to mainly large corporate and public sector organisations. It accounts for 17%
(2024: 20%) of Group gross profit.
2025 2024 Increase
£m £m
Revenue 130.5 126.5 +3%
Gross Profit 60.3 60.2 +0%
Gross Margin 46.2% 47.6%
Gamma Enterprise delivered growth, with the acquisition of BrightCloud,
completed in July 2024, contributing £4.4m (2024: £3.3m) of inorganic
revenue and £2.4m (2024: £1.9m) of inorganic gross profit. On an organic
basis, gross profit reduced by approximately £2m (4%) in 2025 compared to
2024. This was due to near-term competitive ethernet pricing pressure, as
long-term customer contracts came up for renewal and we had to apply discounts
to the pricing of fibre connectivity in order to retain the business, given
the number of alternative networks now competing to provide fibre. We expect
this ethernet pricing competition on renewals to continue, reducing gross
profit by a further c.£3m in FY 2026, after which we believe pricing will
stabilise as the market reaches an equilibrium. This impact is expected to be
offset by notable contracts won late in 2025 for roll-out during 2026, as the
pipeline continues to improve. These wins include:
· In the retail space:
• Morrisons - an extension of the current agreement to 2030, together with
upgrades to in‑store WiFi and cyber protection.
• Safestore plc - a five‑year contract to modernise and secure the network
across 150 locations.
· Other notable customer wins included:
• RAC - managing inbound customer calls.
• Bosch - providing business voice services in both the UK and mainland Europe -
a truly pan-European win.
• Zigup plc (formerly Redde Northgate plc) - unified communications service for
3,000 users and 160 locations.
Our shift to a new go-to-market operating model focused on Secure Networking,
Cyber, Collaboration and Customer Experience better reflects customer needs.
We remain confident in the medium‑term growth potential for Gamma Enterprise
across our core markets.
Financial review
Operating expenses
Operating expenses grew from £210.0m in 2024 to £257.3m. We break these down
as follows:
2025 2024 Increase/ (Decrease)
£m
£m
£m %
Operating expenses excluding research and development costs, depreciation, 187.3 156.5 30.8 +20%
amortisation and exceptional items:
-- Gamma Germany 55.5 19.4 36.1 +186%
-- UK (Gamma Business and Enterprise) 110.7 110.4 0.3 0%
-- Other Europe 13.6 14.0 (0.4) (3%)
-- Central 7.5 12.7 (5.2) (41%)
Research and development costs 19.4 19.7 (0.3) (2%)
Depreciation and amortisation (excluding business combinations) 21.4 20.4 1.0 +5%
Amortisation arising due to business combinations 18.6 13.4 5.2 +39%
Exceptional items 10.6 - 10.6 n/a
Total operating expenses 257.3 210.0 47.3 +23%
Operating expenses excluding research and development costs, depreciation,
amortisation and exceptional items increased by £30.8m (20%), comprising the
following:
· German costs increased by £36.1m (186%) to £55.5m (2024: £19.4m) following
the acquisitions of Placetel in September 2024 and Starface in February 2025,
compared to gross profit growth of £52.0m (197%). Excluding these
acquisitions, the costs of our German business otherwise increased 7% compared
to gross profit growth of 3% as we completed a small amount of restructuring
to integrate our German sales force and we undertook limited recruitment to
support our enlarged German business.
· The UK businesses' costs remained flat at £110.7m (2024: £110.4m) despite
the impact of the acquisitions of BrightCloud and Allnet. On an organic basis,
operating expenses decreased by £3.3m (a 3% decrease in line with a 3%
organic gross profit reduction). Continued cost control across the UK
operations more than offset the impact of the increase in employer's NI and
inflation.
· Central costs, excluding the exceptional items discussed below, decreased by
£5.2m to £7.5m (2024: £12.7m) for three primary reasons. Firstly,
acquisition‑related professional fees not deemed as exceptional reduced by
£2.5m to £0.3m. Secondly, a net gain of £1.6m (2024: £0.8m loss) on mark
to market movements on USD forward exchange contracts and the foreign exchange
movement on Placetel deferred consideration, reduced central costs by £2.4m.
Finally, a net contingent consideration release of £1.9m (2024: £1.3m)
related to the Satisnet, Pragma and BrightCloud acquisitions, reduced central
costs by £0.6m.
Research and development costs decreased £0.3m (2%) to £19.4m (2024:
£19.7m). The acquisition of Starface increased research and development costs
by £0.5m, without which costs reduced by 4%.
Depreciation and amortisation on tangible and intangible assets (excluding
business combinations) increased to £21.4m (2024: £20.4m), driven by an
increased level of leased right-of-use assets from Starface and Placetel.
Amortisation of intangibles arising due to business combinations increased to
£18.6m (2024: £13.4m). This reflected a higher level of acquired intangible
assets, principally from the Starface acquisition, as well as the full‑year
impact of amortisation on the Placetel intangible assets.
Exceptional items
There were three items classified as exceptional in the year (2024: £Nil)
given their size and nature, totaling £10.6m (2024: £Nil). These were the
costs associated with the acquisition of Starface of £5.1m, the one-off costs
incurred in the Group's move to the Main Market of the London Stock Exchange
of £2.2m and costs of £3.3m incurred in completing a UK restructuring in H2
2025. These were previously highlighted at the 2024 Full-Year results
presentation on 25 March 2025 and the Half-Year 2025 results presentation on 9
September 2025. The cash cost of these items in the year was £9.4m (2024:
£2.7m), with the remainder payable in 2026.
Starface acquisition costs
The acquisition of Starface was of significant scale and so the Group incurred
material one-off costs. These principally related to adviser fees, including
significant deal contingent success fees, and costs incurred to cap the amount
of GBP potentially payable given the acquisition consideration was Euro
denominated and subject to German regulatory approval.
Costs associated with the move to the Main Market of the London Stock Exchange
The Group's move of its listing from the AIM to the Main Market of the London
Stock Exchange resulted in significant one-off costs, comprising adviser and
admission fees.
Restructuring costs
Following a review of the efficiency of our operations, we completed a UK
restructuring programme in H2 2025 which resulted in one-off severance costs
of £3.3m. This will deliver annual operating expense savings of £7m across
both Gamma Business and Gamma Enterprise from FY 2026.
Adjusted EBITDA
Adjusted EBITDA grew from £125.5m to £141.7m (13%) driven by our recent
German acquisitions, which performed strongly. It grew at a lower rate than
gross profit, as while Starface and Placetel have higher gross profit margins
than the existing Group, they have relatively higher operating expenses.
Excluding acquisitions, Adjusted EBITDA was flat on an organic constant
currency basis, as defined in the APM section. Adjusted EBITDA also benefitted
from a net contingent consideration release of £1.9m (2024: £1.3m) related
to the Satisnet, Pragma and BrightCloud acquisitions, following an assessment
of current trading compared to earn out related thresholds and the expected
timing of such payments.
There was also a net gain of £1.6m on mark to market movements on USD forward
exchange contracts and the foreign exchange movement on Placetel deferred
consideration. We have excluded this net gain from Adjusted EBITDA, treating
it as an other adjusting item, as it reflects external market factors and not
the Group's trading performance.
We continue to exclude the costs of the implementation of the new UK Finance
ERP system from Adjusted EBITDA. We have recorded them as an other adjusting
item as the total cost of c.£3m for the implementation across 2024 and 2025
was considered significant. These incremental costs in the year were £1.8m
(2024: £1.4m). The implementation is now completed in the UK, with the new
Finance ERP in use in 2026. In the medium-term, we also plan to implement the
new Finance ERP system in our German operations which will facilitate
synergies in the long-term.
Profit before tax and Adjusted PBT
Profit before tax decreased from £95.6m to £87.7m (-8%) while Adjusted PBT
grew from £111.9m to £119.4m (7%).
Adjusted PBT was similarly impacted by the items which impacted Adjusted
EBITDA above. It grew less than Adjusted EBITDA as net finance costs increased
following the use of a significant portion of our cash holdings and a drawdown
on the Revolving Credit Facility ("RCF") to fund the acquisition of Starface
in February 2025. This led to a corresponding £4.2m reduction in interest
income and £3.5m increase in interest expense. Interest on borrowings
resulting from the RCF was £2.6m (2024: £Nil).
Profit before tax was also impacted by £10.6m of exceptional costs incurred
in the year and an increase of £5.2m in amortisation of intangibles arising
due to business combinations following the Starface acquisition, as previously
described.
Taxation
The effective tax rate for 2025 was 26% (2024: 27%). This was higher than the
25% statutory UK average rate due primarily to professional fees incurred on
the Starface acquisition and the move to the Main Market that were not
deductible in determining taxable profit, as well as increased profits
generated in Germany that were taxed at a higher rate. These were partly
offset by the recognition of a successful £1.9m historical multi-year patent
box claim and assumption true ups following the submission of the 2024 UK tax
computations.
Net debt, financing and cash flows
As at 31 December 2025, the Group had Net debt of £9.3m (2024: Net cash
£153.7m). Net debt comprises borrowings of £33.0m (2024: £Nil) less cash
and cash equivalents of £23.7m (2024: £153.7m).
In January 2025, the Group agreed a three-year £130m multicurrency RCF, with
an option to extend for a further year. Net of repayments, £33m was drawn
down during the year, of which £30m was initially drawn down in February 2025
to part fund the Starface acquisition.
Cash generated by operations was £115.1m (2024: £116.8m). This reduction was
after the £9.4m (2024: £2.7m) one-off cash impact of exceptional items
previously described and after an overall increase in working capital cash
outflows of £6.0m. These outflows were offset by the additional cash
generated from our Placetel and Starface acquisitions.
The increase in working capital cash outflow was largely due to a one-off
£4.0m of Starface maintenance revenues where the billing and cash collection
took place prior to acquisition and so formed part of net cash used in
investing activities rather than cash generated by operations. Working capital
was also impacted by the one-off payment of an acquired £1.7m
non-trading-related Placetel liability.
Adjusted cash generated by operations, which excludes the one-off cash impacts
of the exceptional and other adjusting items and the Starface and Placetel
working capital matters described above, increased by £11.4m to £131.8m
(2024: £120.4m). Adjusted cash conversion remained strong at 93% (2024: 96%).
Adjusted free cash flow which is Adjusted cash generated by operations after
capital spend and taxes paid (both as described below), increased by £3.5m to
£80.8m (2024: £77.3m), funding amongst other things, £64.0m of returns to
shareholders.
Taxes paid increased to £26.7m (2024: £23.9m). This includes a £1.9m
partial payment of the tax liabilities acquired with Starface as well as
amounts related to Starface's 2025 post acquisition trading.
The primary cash items which are not directly related to trading were:
· £159.3m was the total cash outflow for acquisitions net of cash acquired
(2024: £15.4m). This comprises £152.2m for the acquisition of Starface (net
of cash acquired of £14.8m and including the repayment of borrowings acquired
of £14.6m presented within financing activities in the cash flow), £1.5m for
the acquisition of Allnet (net of cash acquired of £1.4m) and £1.5m for the
acquisition of Desatel. This also includes £4.0m of deferred consideration
paid for Placetel and BrightCloud and £0.1m of other contingent consideration
payments.
· £45.1m of own shares were repurchased as part of the share buyback programme
announced in March 2025 (2024: £27.3m) and £18.9m was paid as dividends
(2024: £17.3m). This totals £64.0m (2024: £44.6m) of cash returned to
shareholders.
· £33.0m of the RCF was drawn down net of repayments (2024: £1.5m repayment of
German borrowings) to part the fund the acquisition of Starface and the share
buyback.
· Capital spend was £24.3m, which is an increase from £19.2m in 2024. This is
discussed below.
· £5.1m of lease liability repayments, which increased from £3.3m in 2024
primarily due to the new leases acquired with acquisitions.
· £3.0m of interest and costs paid on borrowings which was partly offset by
£2.3m of interest received on cash and cash equivalents. This net interest
payment of £0.7m compares to a net interest receipt of £7.1m in 2024,
reflecting the move from a Net cash to a Net debt position following the
acquisition of Starface.
Capital spend
Capital spend in 2025 was £24.3m (2024: £19.2m), which is 3.8% (2024: 3.3%)
as a percentage of revenue. This is broken down as follows:
· £19.2m on the capitalisation of development costs incurred during the year
(2024: £12.5m). The increase was due to additional development costs from
Starface following its acquisition and the full‑year impact of development
projects which commenced in 2024. This includes the development of the Channel
Partner Portal and enhancements to our voice applications.
· £4.8m on the core network, including increasing capacity as well as computer
equipment and fixtures and fittings (2024: £4.9m).
· £0.3m with third-party software vendors for the software which underpins our
Cloud products (2024: £1.8m).
Adjusted EPS (fully diluted) and EPS (fully diluted)
Adjusted EPS (fully diluted) increased from 85.1p to 94.5p (11%). This
increase was primarily driven by Adjusted PBT growth of 7% as previously
described, supplemented by a 4% benefit from the share buybacks in 2025 and
2024. As explained in the later APM section, we have amended Adjusted EPS
(fully diluted) to exclude the benefit of a successful historical multi-year
patent box claim of £1.9m recognised in the year, given its multi-year nature
which does not reflect current period trading performance. EPS (fully diluted)
decreased from 72.0p to 69.3p (4% decrease) primarily reflecting the fall in
profit before tax of 8%, which was partially offset by the 4% benefit from
share buybacks.
Return on capital employed ("ROCE")
ROCE measures the efficiency of the Group's profit generation from the capital
we deploy. It is an important measure of efficiency, newly introduced as a KPI
in 2025. ROCE for 2025 was healthy at 27.8% (2024 pro forma: 27.4%). Pro forma
explanation included in the APM section.
Acquisitions
The acquisition of Starface in February 2025 was the main driver of a £207.5m
increase in intangible assets from £189.3m to £396.6m. This included
acquisition-related intangible asset additions of £198.0m comprising customer
relationships intangibles of £87.7m, development cost intangibles of £14.9m,
brand intangibles of £6.6m and goodwill of £88.8m. The smaller acquisitions
of Desatel and Allnet contributed a further £4.3m of intangible assets. In
addition, £34.0m of deferred tax liability was recognised on acquired
Starface intangible assets.
As at 31 December 2025 the acquisition of Starface had also increased Group
contract liabilities by £5.8m (which include the deferred maintenance revenue
amounts referred to previously), leased right-of-use assets by £5.9m, lease
liabilities by £6.1m (included within other financial liabilities), trade and
other receivables by £4.6m and trade and other payables by £3.7m.
Share buyback
In total 3,736,038 ordinary shares were acquired by the Company for an
aggregate £45.1m over the course of the H1 2025 share buyback. This
represented approximately 4% of the Company's ordinary share capital at
commencement of the buyback. The shares purchased were cancelled resulting in
a £45.1m reduction in retained earnings.
Dividends
The Board is proposing a final dividend of 14.8p (2024: 13.0p). This is an
increase of 14% and is in line with the progressive dividend policy we have
applied in respect of FY 2025. Subject to shareholder approval, the final
dividend is payable on Thursday 18 June 2026 to shareholders on the register
as at 5.00pm on Friday 29 May 2026.
Capital allocation policy
Gamma has a strong balance sheet and a high level of recurring revenues. It
continues to generate significant operating cash flow with liquidity supported
by its £130m multicurrency RCF, of which £97m remained undrawn at 31
December 2025. The Company is committed to maintaining balance sheet
efficiency and providing the appropriate returns to shareholders, while also
balancing investment in the development of the business and selective M&A,
as appropriate.
In January 2026, following a review of the Company's capital structure,
liquidity and cash generation, the Board announced the launch of a share
buyback programme within existing shareholder authorities of up to £42.5m in
FY 2026 and an intention to launch a further £42.5m share buyback in FY 2027,
returning up to £85m in aggregate.
In parallel, the Board also announced that it intends to pay a dividend per
share for the next two years fixed at FY 2025 levels. The intended dividends
would continue to be structured as 1/3rd : 2/3rds across interim and final
payments. The first such dividend would be the interim dividend declared
alongside the 2026 interim results in September 2026.
The Board will continue to keep its capital allocation policy under review.
Going concern
In making its assessment on going concern the Directors have considered:
· The principal risks faced by the Group.
· The strong liquidity position of the Group - at 31 December 2025 the Group had
cash and cash equivalents of £23.5m and £97.0m of the revolving credit
facility undrawn, providing total liquidity of £120.5m (31 December 2024:
£153.7m). The Group has drawn £33.0m of the RCF at 31 December 2025.
· Budgets, financial plans and associated future cash flows, which assume that
in addition to the dividend, £85m is returned to shareholders by way of share
buybacks during FY 2026 and FY 2027, including the availability of liquidity
and borrowings, as well as covenant compliance.
· Sensitivity analysis assessing the impact of severe but plausible scenarios on
the going concern assessment period. This analysis confirms that projected
cash flows and current borrowing arrangements should provide the Group with
significant liquidity over the going concern period.
The Directors are satisfied that the Group and Company have adequate financial
resources to continue in operational existence for the foreseeable future,
being a period of at least 12 months from the date of this
report. Accordingly, the going concern basis of accounting continues to be
used in the preparation of the Annual Report for the year ended 31 December
2025.
Other matters
Sustainability
Gamma remains committed to proactively minimising its environmental impact,
delivering further progress against our sustainability strategy in 2025,
including our 20th consecutive year of CarbonNeutral® certification. Scope 1
and 2 emissions reduced again during the year, supported by the removal of gas
heating, improved datacentre efficiency and continued sourcing of renewable
electricity. With purchased goods and services accounting for 92% of Scope 3
emissions, we expanded supply‑chain assessments to 81% of suppliers by
spend to enhance data quality and inform reduction plans. Governance remains
strong, with Board‑level oversight through the ESG Committee and
carbon‑reduction metrics embedded into long‑term incentives.
Board changes
Gamma is pleased to announce the appointment of Damien Maltarp as Chief
Financial Officer and Executive Director, following a comprehensive search and
selection process. Damien will succeed Bill Castell, who, as previously
announced, will be leaving the Group on 31 March 2026 to take up an executive
role at a private equity backed business.
Damien will join the Group and the Board at the latest in September 2026, with
the exact date to be confirmed.
Andrew Belshaw Bill Castell
Chief Financial Officer
Chief Executive Officer
Supplementary information on product volumes
The following reporting of data is consistent with the past. Gamma will host a
capital markets day later this year where we will explain how we will report
progress going forward.
The table below shows the number of Cloud seats in UK and Europe
Cloud seats - UK & Europe December December Change
(000's) 2025 2024 (%)
UK* 1,087 1,040 5%
Europe 711 434 64%
-- Germany(+) 594 311 91%
-- Other Europe 117 123 (5%)
*UK Cloud seats excludes seats resulting from the migration of the O2 Daisy
base and are at a lower margin.
+On a proforma basis, including Starface seats at 31 December 2024, Cloud
seats in Germany were 536,000 and therefore 2025 growth was 11%
The table below shows the number of CCaaS seats:
CCaaS seats - UK & Europe December December Change
(000's) 2025 2024 (%)
UK* 48 45 7%
Europe - Other Europe 3 5 (40%)
*CCaaS seats for Horizon Contact users also take a "Base Horizon" seat
(therefore 32,000 seats are separately disclosed within Cloud PBX
seats).
The table below shows the increase in the number of SIP Trunks which provide
voice enablement to various hardware PBXs and voice applications:
Calling - UK & Europe December December Change
(000's) 2025 2024 (%)
SIP Trunks enabling traditional hardware PBX
UK 892 932 (4%)
Europe 203 206 (1%)
-- Germany 197 199 (1%)
-- Other Europe 6 7 (14%)
SIP Trunks enabling a non-Gamma Cloud PBX
UK 522 481 9%
Europe - - -
Voice enabled Microsoft Teams users (either Operator Connect
or Microsoft Teams Direct Routing)
UK 555 467 19%
Europe 20 14 43%
Condensed consolidated statement of profit or loss
For the year ended 31 December 2025
2025 2024
Note £m £m
Revenue 3 645.8 579.4
Cost of sales (297.6) (279.1)
Gross profit 348.2 300.3
Operating expenses (257.3) (210.0)
Of which exceptional items 4 (10.6) -
Profit from operations 90.9 90.3
Finance income 2.9 7.1
Finance expense (6.1) (1.8)
Profit before tax 87.7 95.6
Tax expense 5 (22.7) (25.8)
Profit after tax 65.0 69.8
Profit attributable to:
Equity holders of Gamma Communications plc 64.9 69.8
Non-controlling interests 0.1 -
65.0 69.8
Earnings per share attributable to the ordinary equity holders of the Company:
Basic per Ordinary Share (pence) 6 69.5 72.3
Diluted per Ordinary Share (pence) 6 69.3 72.0
All results recognised during the period were generated from continuing
operations.
Condensed consolidated statement of comprehensive income
For the year ended 31 December 2025
2025 2024
£m £m
Profit after tax for the period 65.0 69.8
Other comprehensive income/(expense)
Items that may be reclassified subsequently to the statement of profit or
loss:
Exchange differences on translation of foreign operations before tax 10.0 (1.9)
Tax effect of exchange differences on translation of foreign operations (1.0) 0.6
Total other comprehensive income/(expense) 9.0 (1.3)
Total comprehensive income 74.0 68.5
Total comprehensive income for the period attributable to:
Equity holders of Gamma Communications plc 73.9 68.5
Non-controlling interests 0.1 -
74.0 68.5
Condensed consolidated statement of financial position
As at 31 December 2025
2025 2024
Note £m £m
Assets
Non-current assets
Property, plant and equipment 8 40.0 33.6
Intangible assets 9 396.8 189.3
Deferred tax asset 6.9 8.6
Trade and other receivables 10.8 8.7
Contract assets 12.7 6.7
467.2 246.9
Current assets
Inventories 7.5 10.0
Trade and other receivables 78.4 80.4
Contract assets 41.8 35.0
Cash and cash equivalents 23.7 153.7
Current tax asset 2.7 2.0
154.1 281.1
Total assets 621.3 528.0
Liabilities
Non-current liabilities
Other payables - 0.1
Other financial liabilities 45.6 5.9
Provisions 1.4 1.4
Contract liabilities 15.0 13.3
Acquisition-related liabilities 10 15.8 22.0
Deferred tax liability 48.8 17.6
126.6 60.3
Current liabilities
Trade and other payables 70.3 68.4
Other financial liabilities 5.2 2.0
Provisions 2.1 0.9
Contract liabilities 20.2 18.5
Acquisition-related liabilities 10 7.2 4.5
Current tax liability 4.7 0.7
109.7 95.0
Total liabilities 236.3 155.3
Net assets 385.0 372.7
Equity
Share capital 11 0.2 0.2
Share premium reserve 23.3 23.3
Other reserves 12 (6.3) (18.2)
Retained earnings 368.6 368.3
Equity attributable to owners of Gamma Communications plc 385.8 373.6
Non-controlling interests 0.3 0.2
Written put options over non-controlling interests (1.1) (1.1)
Total equity 385.0 372.7
Condensed consolidated statement of cash flows
For the year ended 31 December 2025
2025 2024
Note £m £m
Cash flows from operating activities
Profit for the year before tax 87.7 95.6
Adjustments for:
Depreciation of property, plant and equipment 8 8.2 9.3
Depreciation of right-of-use assets 3.8 2.4
Amortisation of intangible assets 9 28.0 22.1
Other change in fair value of contingent consideration (1.9) (1.3)
Share-based payment expense 2.2 2.7
Finance income (2.9) (7.1)
Finance expense 6.1 1.8
Other non-cash movements* (1.4) -
129.8 125.5
(Increase) in trade and other receivables and contract assets (6.8) (1.7)
Decrease/(increase) in inventories 3.4 (1.7)
(Decrease) in trade and other payables (6.0) (4.8)
(Decrease)/increase in contract liabilities (6.1) 2.0
Increase/(decrease) in provisions 0.8 (2.5)
Cash generated by operations 115.1 116.8
Taxes paid (26.7) (23.9)
Net cash flows from operating activities 88.4 92.9
Investing activities
Purchase of property, plant and equipment 8 (4.8) (4.9)
Purchase of intangible assets 9 (19.5) (14.3)
Interest received 2.3 7.1
Acquisition of subsidiaries net of cash acquired 13 (144.7) (15.4)
Net cash used in investing activities (166.7) (27.5)
Financing activities
Lease liability repayments (5.1) (3.3)
Proceeds from borrowings 108.5 -
Repayment of borrowings (75.5) (1.5)
Repayment of borrowings acquired with acquisitions (14.6) -
Interest paid (3.0) -
Share issues/ reissued 0.9 1.8
Dividends (18.9) (17.3)
Repurchase of own shares (45.1) (27.3)
Net cash used in financing activities (52.8) (47.6)
Net (decrease)/increase in cash and cash equivalents (131.1) 17.8
Cash and cash equivalents at beginning of year 153.7 136.5
Effects of exchange rate changes on cash and cash equivalents 1.1 (0.6)
Cash and cash equivalents at end of year 23.7 153.7
*Primarily relating to deferred consideration included in investing activities
Condensed consolidated statement of changes in equity
For the year ended 31 December 2025
Share capital Share premium reserve Other reserves Retained earnings Non- controlling interests Written put options over non- controlling interests Total equity
£m £m £m £m Total £m £m £m
£m
1 January 2024
0.2 22.9 6.9 315.1 345.1 0.2 (1.1) 344.2
Issue or reissue of shares - 0.4 (2.0) 2.0 0.4 - - 0.4
Share-based payment expense - - 2.2 - 2.2 - - 2.2
Deferred tax on share-based payment expense - - - 0.9 0.9 - - 0.9
Share buyback(1) - - (27.3) - (27.3) - - (27.3)
Treasury share allocations(2) - - 3.3 (2.2) 1.1 - - 1.1
Dividend paid - - - (17.3) (17.3) - - (17.3)
Transactions with owners - 0.4 (23.8) (16.6) (40.0) - - (40.0)
Profit for the year - - - 69.8 69.8 - - 69.8
Other comprehensive (expense) - - (1.3) - (1.3) - - (1.3)
Total comprehensive (expense)/income - - (1.3) 69.8 68.5 - - 68.5
1 January 2025 0.2 23.3 (18.2) 368.3 373.6 0.2 (1.1) 372.7
Issue or reissue of shares - - (1.2) 1.2 - - - -
Share-based payment expense - - 2.2 - 2.2 - - 2.2
Deferred tax on share-based payment expense - - - (0.8) (0.8) - - (0.8)
Share buyback(1) - - - (45.1) (45.1) - - (45.1)
Treasury share allocations(2) - - 1.9 (1.0) 0.9 - - 0.9
Dividend paid - - - (18.9) (18.9) - - (18.9)
Transactions with owners - - 2.9 (64.6) (61.7) - - (61.7)
Profit for the year - - - 64.9 64.9 0.1 - 65.0
Other comprehensive income - - 9.0 - 9.0 - - 9.0
Total comprehensive income - - 9.0 64.9 73.9 0.1 - 74.0
31 December 2025 0.2 23.3 (6.3) 368.6 385.8 0.3 (1.1) 385.0
1 Represents shares purchased under share buyback programmes. Shares purchased
under the 2025 buyback programme were immediately cancelled rather than held
in Treasury, within Other Reserves.
2 Treasury share allocations relate to treasury shares which have been used to
satisfy share options and other employee share plans.
1. Basis of preparation
The preliminary results for the year ended 31 December 2025 are an abridged
statement of the full Annual Report which was approved by the Board of
Directors on 23 March 2026. The consolidated financial statements in the
full Annual Report are prepared in accordance with UK-adopted International
Financial Reporting Standards ("IFRS"), with IFRS as issued by the
International Accounting Standards Board ("IASB") and with the requirements of
the Companies Act 2006. The financial statements are prepared on a going
concern basis and have been prepared on a historical cost basis, except for
certain financial instruments which have been measured at fair value.
The financial information contained in this statement does not constitute
statutory financial statements within the meaning of the Companies Act 2006.
They are an extract from the full accounts for the year ended 31 December 2025
on which the auditor has expressed an unqualified opinion and do not include
any statement under section 498 of the Companies Act 2006. The Group's
statutory consolidated financial statements for the year ended 31 December
2025 will be available on the Gamma Communications plc website in due course,
will be posted to shareholders prior to the AGM, and subsequently filed at
Companies House.
The financial information included in this preliminary announcement does not
itself contain sufficient information to comply with IFRS. The annual
report and audited financial statements for the year ended 31 December 2025
will be made available on the Group's website in April 2026.
The financial statements are presented in Pounds Sterling and, unless
otherwise stated, have been rounded to the nearest 0.1 million (£m).
The consolidated financial statements have been prepared on a going concern
basis under the historical cost convention, except for certain financial
instruments which have been measured at fair value.
The accounting policies adopted are consistent with those followed in the
preparation of the audited statutory consolidated financial statements for
the year ended 31 December 2025.
A full set of the audited statutory accounts will be available in due
course at: www.gammagroup.co/company/investors/results-presentations/
The new standards, amendments and interpretations applied for the first time
are shown below. There were no new standards, amendments or interpretations
applied for the first time which had a material impact on the condensed
consolidated financial statements.
· Amendments to IAS 21 - Lack of Exchangeability
2. Accounting policies, judgements and estimates
Accounting policies
The accounting policies adopted are consistent with those followed in the
preparation of the audited statutory financial statements for the year ended
31 December 2024 other than for the new amendments applied for the first time
as outlined in note 1 and which did not have a material impact on the
condensed consolidated financial statements. As a result of the increased
balance of acquired intangibles from acquisitions, the group has revised the
presentation of the development costs and technology intangible asset
categories, which previously included internally generated assets, purchased
licences and rights, and acquired technology arising from business
combinations. Acquired technology arising from business combinations is now
presented separately from internally generated development costs and purchased
technology categories, new accounting policy below.
Intangible assets Acquired technology
Acquired technology comprises development projects (both completed and in
progress), licences and rights over network interface
identifications acquired through business combinations, which
are recognised at fair value at the acquisition date. Amortisation is
charged to the Consolidated statement of profit or loss through operating
expenses on a straight-line basis over the estimated useful life from the date
the asset is available for use.
The fair value of a acquired technology at the date of acquisition is based
on the Income Method or the Relief from Royalty Method, which is a valuation
model based on discounted cash flows or based on fair value, by reference to
observable market transactions for similar assets. The useful lives
of acquired technology are up to seven years, corresponding to a
yearly amortisation of between 14% and 25%. The useful lives are reviewed
annually and amended, as required, on a prospective basis.
Critical accounting estimates and judgements
Preparation of the consolidated financial statements requires the Group to
make certain estimations, assumptions and judgements regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including best estimates of future events. In
the future, actual experience may differ from these estimates and assumptions.
The following are considered to be the critical accounting judgements and key
sources of estimation uncertainty.
Critical accounting judgements
Critical judgements, apart from those involving estimations, applied in the
preparation of the consolidated financial statements are discussed below:
Revenue recognition
Revenue recognition on contracts may involve providing services over multiple
years and involving a number of products bundled together. In such instances,
judgement is required to identify the date of transaction of separable
elements of the contract and the fair values which are assigned to each
element.
Key accounting estimates
There are no key accounting estimates that could have a significant risk of
causing a material adjustment within the next financial year.
3. Segment information
The Group's main operating segments are outlined below:
· Gamma Business - Gamma Business comprises our UK SME and Service Provider
businesses. It contributed 55% (2024: 65%) of the Group's external gross
profit. UK SME sells a broad range of Calling, Cloud Communications and
Connectivity products that support small UK businesses typically with fewer
than 250 employees. Service Provider provides Calling products (voice
services, numbering and SMS capabilities) in c.27 countries for large, global
communications platform providers, network operators and mobile virtual
network operators who do not have their own telephone networks.
· Gamma Enterprise - Gamma Enterprise sells cloud communications platforms
(including contact centre solutions), connectivity, mobile, security and
complex managed networks to mainly large corporate and public sector
organisations. It contributed 17% (2024: 20%) of the Group's external gross
profit.
· Gamma Germany - Gamma Germany serves over 75,000 SME customers with a
comprehensive product portfolio of cloud communications platforms, on-premise
calling, connectivity and IoT products. Delivered through multiple routes to
market, including a partner network of c.4,500 partners and our digital
channel in Placetel. It contributed 23% (2024: 9%) of the Group's gross
profit.
· Other Europe - This segment consists of sales made through Gamma's Spanish
and Dutch businesses. It contributed 5% (2024: 6%) of the Group's external
gross profit.
· Central functions - This comprises the central management team and wider
Group costs.
Change in segmental reporting
Over the last year the Group has expanded its presence in Germany following
the acquisitions of Starface and Placetel. As a result, and to align with
internal management reporting, we have split our European segment into two
segments: Gamma Germany and Other Europe. This change in reporting structure
has taken effect for reporting in 2025 with prior year comparatives also
given.
Measurement of operating segment profit or loss, assets and liabilities
The accounting policies of the reportable segments are the same as those
described in the accounting policies. The Board and Executive Committee
principally evaluate performance on the basis of Adjusted EBITDA (see APM
section). The Gross profit of each operating segment is also evaluated.
Inter-segment sales are priced in line with sales to external customers, with
an appropriate discount being applied to encourage use of Group resources.
This policy was applied consistently throughout the current and prior year.
Revenue from external customers has been derived principally in the
geographical area of the operating segment and no single customer contributes
more than 10% of revenue.
Gamma Business Gamma Enterprise Gamma Germany Other Europe Central functions £m Total
£m £m £m £m £m
2025
Segment revenue 395.2 137.2 110.4 30.8 - 673.6
Inter-segment revenue (20.6) (6.7) (0.2) (0.3) - (27.8)
Revenue from external customers 374.6 130.5 110.2 30.5 - 645.8
Timing of revenue recognition
At a point in time 26.5 10.8 34.4 2.1 - 73.8
Over time (recurring) 348.1 119.7 75.8 28.4 - 572.0
374.6 130.5 110.2 30.5 - 645.8
Gross profit 190.8 60.3 78.4 18.7 - 348.2
Adjusted EBITDA 93.7 29.9 22.5 4.7 (9.1) 141.7
Exceptional items (2.2) (1.1) - - (7.3) (10.6)
Other adjusting items (1.8) - - - 1.6 (0.2)
EBITDA 89.7 28.8 22.5 4.7 (14.8) 130.9
Gamma Business Gamma Enterprise Gamma Germany Other Europe Central functions Total
£m £m £m £m £m £m
2024
Segment revenue 394.2 127.6 54.3 30.0 - 606.1
Inter-segment revenue (25.3) (1.1) - (0.3) - (26.7)
Revenue from external customers 368.9 126.5 54.3 29.7 - 579.4
Timing of revenue recognition
At a point in time 22.9 12.5 26.4 1.0 - 62.8
Over time (recurring) 346.0 114.0 27.9 28.7 - 516.6
368.9 126.5 54.3 29.7 - 579.4
Gross profit 194.7 60.2 26.4 19.0 - 300.3
Adjusted EBITDA 95.0 31.4 7.0 4.8 (12.7) 125.5
Exceptional items - - - - - -
Other adjusting items (1.4) - - - - (1.4)
EBITDA 93.6 31.4 7.0 4.8 (12.7) 124.1
A reconciliation of Adjusted EBITDA, the Group's measure of segment profit, to
the Group's profit before tax for the year is included below:
2025 2024
£m £m
Profit before tax 87.7 95.6
Finance income (2.9) (7.1)
Finance expense 6.1 1.8
Profit from operations 90.9 90.3
Depreciation of property, plant and equipment and right-of-use assets 12.0 11.7
Amortisation from intangible assets excluding business combinations 9.4 8.7
Amortisation from intangible assets arising due to business combinations 18.6 13.4
EBITDA 130.9 124.1
Exceptional items 10.6 -
Other adjusting items 0.2 1.4
Adjusted EBITDA 141.7 125.5
Further details on the definition and calculation of Adjusted EBITDA are
included in the APM section.
Geographic segmentation
The UK is the Group's country of domicile and is where most revenue is
generated, which is from external UK customers. The geographic analysis of
revenue presented below is based on the country in which the customer is
invoiced.
The Group's revenue from external customers by geographical location is
detailed below:
2025 2024
£m £m
UK 467.6 458.9
Germany 122.9 67.5
Rest of Europe 47.1 46.5
Rest of World 8.2 6.5
Total 645.8 579.4
The Group's non-current assets, which excludes deferred tax assets and
financial instruments, by geographical location of the assets, are detailed
below:
2025 2024
£m £m
UK 174.9 141.3
Germany 245.2 57.1
Rest of Europe 26.1 35.7
Total 446.2 234.1
Product segmentation
2025 2024
£m £m
Revenue recognised over time (recurring)
Voice and data traffic 107.7 109.2
Subscriptions and rentals 450.3 403.2
Installation fees and other (over time) 14.0 4.2
Total recognised over time (recurring) 572.0 516.6
Revenue recognised at a point in time
Equipment sales 29.4 31.1
Commissions 24.2 25.7
Installation fees and other (at a point in time) 20.2 6.0
Total recognised at a point in time 73.8 62.8
Total revenue 645.8 579.4
Recurring revenue includes revenues we have a reasonable expectation to recur.
This includes committed revenues, including those under rolling terms and
subscriptions.
4. Exceptional items
2025 2024
£m £m
Acquisition costs 5.1 -
Listing costs 2.2 -
Restructuring costs 3.3 -
Total exceptional items 10.6 -
Tax effect of exceptional items (0.8) -
The acquisition of Starface, see note 13, was of significant scale and so the
Group incurred material one-off costs. These principally related to adviser
fees, including significant deal contingent success fees, and costs incurred
to cap the amount of GBP potentially payable given the acquisition
consideration was Euro denominated and subject to German regulatory approval.
This is considered exceptional by virtue of the size of the acquisition and
the level of costs incurred.
The Group's move of its listing from the AIM to the Main Market of the London
Stock Exchange resulted in significant one-off costs, comprising adviser and
admission fees. This is considered exceptional due to the one-off nature of
the transaction.
Restructuring costs relate to severance of £3.3m in the year (2024: £Nil),
following a review of the efficiency of our UK operations. This is considered
exceptional due to the one-off nature of the transaction and the level of cost
incurred.
The total cash cost of these exceptional items in the year was £9.4m (2024:
£2.7m) and the remaining £1.2m is expected to be paid out within the next 12
months.
5. Tax expense
2025 2024
£m £m
Current tax expense
Current tax on UK profits for the year 24.5 26.4
Overseas current tax charge 5.8 1.5
Adjustment in respect of prior years (3.6) 1.0
Total current tax 26.7 28.9
Deferred tax expense
Origination and reversal of temporary differences (3.0) (2.1)
Adjustment in respect of prior years (1.0) (1.0)
Total deferred tax (4.0) (3.1)
Total tax expense 22.7 25.8
The tax charge of 26% for 2025 is higher (2024: 27%, higher) than the standard
rate of corporation tax in the United Kingdom of 25% (2024: 25%). The
differences are explained below:
2025 2024
£m £m
Profit before tax 87.7 95.6
Expected tax charge based on the standard blended rate of United Kingdom
corporation tax at the domestic rate of 25% (2024: 25%)
21.9 23.9
Effects of:
Tax effect of expenses that are not deductible in determining taxable profit 5.3 2.2
Effect of different tax rates of subsidiaries operating in other jurisdictions 1.4 -
Other tax items (1.3) (0.3)
Adjustment in respect of prior years (4.6) -
Total tax expense 22.7 25.8
The total tax expense for the year includes a £1.9m credit related to the
recognition of a successful historical multi-year patent box claim.
Deferred tax is calculated based on the tax laws and rates that were enacted
or substantively enacted at the balance sheet date.
6. Earnings per share
2025 2024
Earnings per Ordinary Share - basic (pence) 69.5 72.3
Earnings per Ordinary Share - diluted (pence) 69.3 72.0
The calculation of the basic and diluted earnings per share is based on the
following data:
2025 2024
£m £m
Profit after tax attributable to Ordinary equity holders of the Company 64.9 69.8
Shares No. No.
Basic weighted average number of Ordinary Shares 93,417,299 96,573,811
Effect of dilution resulting from share options 277,021 408,717
Diluted weighted average number of Ordinary Shares 93,694,320 96,982,528
7. Dividends
The following dividends were paid by the Group to its shareholders:
£m £m
Final dividend for the year ended 31 December 2023 of 11.4p per - 11.1
Ordinary Share
Interim dividend for the year ended 31 December 2024 of 6.5p - 6.2
per Ordinary Share
Final dividend for the year ended 31 December 2024 of 13.0p per 12.1 -
Ordinary Share
Interim dividend for the year ended 31 December 2025 of 7.4p 6.8 -
per Ordinary Share
18.9 17.3
A final dividend of 14.8p will be proposed at the 2025 Annual General Meeting
but has not been recognised as it requires shareholder approval. The total
amount of dividends proposed for the year ended 31 December 2025 is 22.2p. The
payments of these dividends do not have any tax consequences for the Group.
8. Property, plant and equipment
2025 2024
£m £m
Owned property, plant and equipment 24.8 27.0
Leased right-of-use assets 15.2 6.6
Total property, plant and equipment 40.0 33.6
9. Intangible assets
Intangible assets acquired through business combinations Internally generated development costs(1)
£m
Cost Goodwill Customer relationships Brand Acquired technology(1) Purchased technology(1) Total
£m £m £m £m £m £m
At 1 January 2025 135.0 78.6 5.9 14.9 58.8 29.6 322.8
Additions - - - - 19.2 0.9 20.1
Acquisition of subsidiaries 92.3 88.3 6.8 14.9 - - 202.3
Disposals(2) - (0.2) - - (14.2) - (14.4)
Exchange difference 7.3 7.0 0.4 1.4 0.4 - 16.5
At 31 December 2025 234.6 173.7 13.1 31.2 64.2 30.5 547.3
Amortisation and impairment
At 1 January 2025 19.8 46.3 1.8 4.9 37.3 23.4 133.5
Charge for the year - 12.1 1.6 4.9 7.9 1.5 28.0
Disposals(2) - (0.2) - - (14.2) - (14.4)
Exchange difference 0.8 2.1 - 0.2 0.3 - 3.4
At 31 December 2025 20.6 60.3 3.4 10.0 31.3 24.9 150.5
Carrying value
At 1 January 2025 115.2 32.3 4.1 10.0 21.5 6.2 189.3
At 31 December 2025 214.0 113.4 9.7 21.2 32.9 5.6 396.8
1 During the year, the Group revised the presentation of the development costs
and technology intangible asset categories to exclude "acquired technology
arising from business combinations" and present it separately, with
development costs renamed as "internally generated development costs" and
technology renamed "purchased technology", all as defined in Note 1,
Accounting policies.
2 During the year, the Group disposed of certain assets with a net book value
of £Nil. These disposals had no impact on the Consolidated statement of
profit or loss or the Consolidated statement of financial position.
Included in development costs are assets not yet in service of £5.7m (2024:
£4.3m).
Customer relationships includes the following material balances at 31 December
2025:
· Starface: £88.4m (2024: £Nil) carrying value with nineteen years'
amortisation remaining.
· Pragma: £11.4m (2024: £12.6m) carrying value with eleven years' amortisation
remaining.
Technology includes the following material balances at 31 December 2025:
· Starface: £12.5m (2024: £Nil) carrying value with seven years' amortisation
remaining.
Brand includes the following material balances at 31 December 2025:
· Starface: £6.1m (2024: £Nil) carrying value with seven years' amortisation
remaining.
Intangible assets acquired through business combinations Internally generated development costs(1)
£m
Cost Goodwill Customer relationships Brand Acquired technology(1) Purchased technology(1) Total
£m £m £m £m £m £m
At 1 January 2024 133.2 56.7 2.2 5.6 46.7 24.4 268.8
Additions - - - - 12.5 1.8 14.3
Acquisition of subsidiaries 15.1 10.0 2.0 9.5 0.2 - 36.8
Reclassifications(2) (11.4) 13.7 1.8 - - 3.5 7.6
Disposals - - - - (0.2) - (0.2)
Exchange difference (1.9) (1.8) (0.1) (0.2) (0.4) (0.1) (4.5)
At 31 December 2024 135.0 78.6 5.9 14.9 58.8 29.6 322.8
Amortisation and impairment
At 1 January 2024 20.5 37.4 1.1 2.7 30.5 21.9 114.1
Charge for the year - 10.2 0.7 2.5 7.2 1.5 22.1
Disposals - - - - (0.2) - (0.2)
Exchange difference (0.7) (1.3) - (0.3) (0.1) (0.1) (2.5)
At 31 December 2024 19.8 46.3 1.8 4.9 37.4 23.3 133.5
Carrying value
At 1 January 2024 112.7 19.3 1.1 2.9 16.2 2.5 154.7
At 31 December 2024 115.2 32.3 4.1 10.0 21.4 6.3 189.3
1 Prior year comparatives have been represented to reflect the revised
presentation of intangible asset categories introduced in the current year.
See narrative above for further details.
2 In 2024 we reclassified the balances between goodwill, customer
relationships and brand as a result of the finalisation of the fair value
accounting for the Pragma acquisition. The other reclassification amount of
£3.5m in 2024 related to purchased technology intangible assets previously
reported in inventory to better align with other similar transactions.
When considering the recoverable amount, the break-even point for the
assumptions is calculated to understand the sensitivity of the assumptions.
Given the challenging market conditions in the Netherlands, the headroom
between the recoverable amount (determined based on a VIU model) and the
carrying value of the Dutch business is modest at £2.4m (2024: £2.5m) at the
measurement date.
Key assumptions for the Netherlands value-in-use ("VIU") on which the
impairment test is based is the revenue growth over the five-year period,
which totals double-digit growth. The long-term growth rate used was 1.4%
(2024: 2%). This is based on long-term GDP growth forecasts for the
Netherlands. This growth rate does not exceed the relevant long-term average
growth rate based on OECD long-term baseline projections No.117.
We have considered reasonably possible changes in key assumptions that could
cause an impairment and have identified two key assumptions relating to the
cash flows in years 1 to 5. Being:
1) The Netherlands CGU VIU cash flow assumes low double-digit revenue growth over
the five-year period. A decrease in the forecast revenue growth, factoring in
directly consequential cost savings to commission and bonuses, by 46% over
this period, would see the headroom reduce to £Nil.
2) An increase in the pre-tax discount rate of 1.7% from 11.3% to 13.0% would
reduce this headroom to £Nil.
The reduction required to the long-term growth rate to reduce the headroom to
£Nil is not considered reasonably possible.
10. Financial Instruments
The tables below set out the measurement categories and carrying values of
financial assets and liabilities with fair value inputs where relevant.
Carrying value 2025 Fair value hierarchy 2025/2024 Carrying value 2024
£m £m
Measurement category Fair value 2025
Financial assets
Non-current
Contract assets Amortised cost 12.7 6.7
Other receivables Amortised cost 1.4 0.7
Current
Cash and cash equivalents Amortised cost 23.7 153.7
Trade receivables - net Amortised cost 52.0 55.7
Contract assets Amortised cost 41.8 35.0
Other receivables Amortised cost 3.4 3.5
135.0 255.3
Financial liabilities
Non-current
Other payables Amortised cost - 0.1
Other financial liabilities:
Borrowings Amortised cost 32.7 -
Lease liabilities Amortised cost 12.8 5.9
Derivative liabilities Fair value through P&L 0.1 Fair value based on market inputs Level 2 -
Acquisition-related liabilities:
Deferred consideration Amortised cost 9.6 13.0
Contingent consideration Fair value through P&L 4.7 Fair value weighted expected Level 3 7.7
returns methodology
Put option liability Fair value through P&L 1.5 Fair value weighted expected returns methodology Level 3 1.3
Current
Trade and other payables Amortised cost 66.0 64.8
Other financial liabilities:
Borrowings Amortised cost 0.3 -
Lease liabilities Amortised cost 4.8 2.0
Derivative liabilities Fair value through P&L 0.1 Fair value based on market inputs Level 2 -
Acquisition-related liabilities:
Deferred consideration Amortised cost 4.0 4.4
Contingent consideration Fair value through P&L 3.2 Fair value weighted expected returns methodology Level 3 0.1
139.8 99.3
The carrying value of trade and other receivables, contract assets, cash and
cash equivalents, and trade and other payables is considered to be
approximately equal to their fair value, due to their short-term nature. The
fair value of borrowings is not materially different from its carrying amount,
due to the floating interest rate, linked to SONIA, aligning it with the
current market level.
Derivative liabilities relate to foreign currency forwards, with a nominal
value of $18.3m (£13.6m), measured at fair value which are classed as level 2
in the fair value measurement hierarchy.
Borrowings
Borrowings consist of Revolving Credit Facility ("RCF") of which £33.0m is
current and £Nil in non-current. Of which, £Nil (2024: £Nil) are secured on
the Group's land and buildings.
The total transaction costs incurred on signing the RCF were £0.7m. The RCF
is stated net of unamortised transaction costs of £0.3m (2024: £Nil) and
interest payable of £0.3m. The deferred transaction costs have been
capitalised and are being amortised over the expected life of the facility.
The accrued interest is current, which is payable within 3 months.
The RCF incurs interest on drawn balances at a margin between 1.5% and 2.25%
above SONIA, dependant on leverage, and between 0.5% and 0.8% on undrawn
balances.
Loan covenants
The following covenants relate to the RCF, and are tested on a 12-month
rolling basis:
· Leverage, defined as total Net debt to EBITDA, not to exceed 3.0x; and
· Interest cover, defined as EBITDA to net finance charges, not to be less than
4.0x.
The Group has significant headroom against both of these covenants throughout
the period.
Acquisition-related liabilities
Deferred consideration (amortised cost)
2025 2024
£m £m
Current 4.0 4.4
Non-current 9.6 13.0
13.6 17.4
Deferred consideration relates to fixed amounts payable with regard to
acquisitions. The reconciliation of the carrying amounts is as follows:
Satisnet BrightCloud Placetel Total
£m £m £m £m
At 1 January 2025 0.5 0.2 16.7 17.4
Deferred consideration settled - (0.2) (3.8) (4.0)
Unwinding of discount - - 1.1 1.1
Foreign exchange movements - - (0.9) (0.9)
At 31 December 2025 0.5 - 13.1 13.6
Contingent consideration (level 3)
2025 2024
£m £m
Current 3.2 0.1
Non-current 4.7 7.7
7.9 7.8
The reconciliation of the carrying amounts of contingent consideration is as
follows:
Satisnet Pragma BrightCloud Allnet Other Total
£m £m £m £m £m £m
At 1 January 2025 2.8 4.7 0.3 - - 7.8
Acquisition of subsidiary - - - 0.6 0.5 1.1
Contingent consideration settled - - - - (0.1) (0.1)
Change in fair value of contingent consideration:
Unwinding of discount (recognised in finance expense) 0.1 0.8 0.1 - - 1.0
Other change in fair value (recognised in operating expenses) (2.4) 0.9 (0.4) - - (1.9)
At 31 December 2025 0.5 6.4 - 0.6 0.4 7.9
Contingent consideration for Satisnet is based on the managed service revenues
for the financial year ending 31 December 2025, and gross profit between 1
July 2023 and 31 December 2025. The fair value of £0.5m at 31 December 2025
is current (31 December 2024: expected payout £3.2m). After the impact of the
unwinding of the discount, a decrease of £2.4m was required, which was
recognised in operating expenses.
Contingent consideration for Pragma is based on the EBITDA performance for the
financial year ending 31 December 2026. Consideration of up to £9.8m may be
payable. The fair value of £6.4m at 31 December 2025, which takes into
account the weighted probability of payout, is based on a payout of £6.4m (31
December 2024: £6.4m), of which £2.0m is current and £4.4m is non-current.
After the impact of the unwinding of the discount, an increase of £0.9m was
required following a change in the expected payment date which has been
recorded within operating expenses.
Contingent consideration for BrightCloud is based on the revenue performance
for any consecutive twelve-calendar-month period from acquisition to 31
December 2025. As the performance target was not met, the contingent
consideration liability has been released in full, which has been recorded
within operating expenses.
Contingent consideration for Allnet is based on future operating expenses
targets for the financial years ending 31 December 2025 and 31 December 2026.
Consideration of up to £0.6m may be payable. The fair value of £0.6m at 31
December 2025, is split between £0.3m current and £0.3m non-current and is
based on a payout of £0.6m.
Other contingent consideration relates to amounts owed by Starface prior to
the Group's acquisition. The remaining £0.4m is expected to be settled within
12 months.
The changes in fair value of contingent consideration have resulted in a
£1.9m net gain within operating expenses in 2025 (2024: £1.3m net gain). In
2025 acquisition related professional adviser costs not deemed as exceptional
total £0.3m (2024: £2.8m), have been expensed within operating expenses.
Put option liability (level 3)
2025 2024
£m £m
Non-current 1.5 1.3
As a result of the acquisition of Pragma in 2023 there is an option for the
previous owners to sell or for the Group to acquire the remaining 5% of the
shares in Pragma (which are held by management) in 2027 (where the
consideration will be based on the results of the preceding financial year).
The movement during the year relates to the unwinding of discounting.
Financial instruments measured at fair value
Liabilities measured at fair value are remeasured at each reporting date and
their values are illustrated in the table below:
2025 2024
Financial liabilities £m £m
Level 2 0.2 -
Forward exchange contracts (nominal value $18.3m)
Level 3 7.9 7.8
Contingent consideration 1.5 1.3
Put option liability
Total 9.6 9.1
The Group held mark to market forward exchange contracts with a nominal value
of $18.3m (£13.6m) at 31 December 2025, to limit potential foreign exchange
exposure that could arise on the Group's USD commitments, including up to the
next two year's Placetel deferred consideration payments which are denominated
in USD.
As at 31 December 2025, the potential undiscounted amount of future payments
that could be required under the contingent consideration and the put option
liability range from £1.2m to £11.3m and £Nil to £2.9m respectively (31
December 2024: £0.1m to £18.1m and £Nil to £2.9m).
The total gain recognised in the Consolidated statement of profit or loss on
Level 3 instruments was £0.7m (2024: £Nil).
The Group's finance team performs valuations of financial items for financial
reporting purposes and in consultation with third-party valuation specialists
for complex valuations. Valuation techniques are selected based on the
characteristics of each instrument, with the overall objective of maximising
the use of market-based information. Movements in the fair value are charged
through the Consolidated statement of profit or loss.
11. Share capital
At 1 January 2025 Number £m
Ordinary shares of £0.0025 each 97,500,389 0.2
Movement:
March* (925,000)
April* (1,579,000)
May* (125,000)
June* (1,107,038)
At 31 December 2025
Ordinary shares of £0.0025 each 93,764,351 0.2
* Ordinary shares purchased and cancelled under the share buyback
programme.
In the year 3,736,038 ordinary shares of £0.0025 each were acquired by the
Company and cancelled (2024: 1,910,596 ordinary shares of £0.0025 each were
acquired by the Company and held in Treasury). 131,073(2024: 186,946) were
transferred from treasury to settle exercised share options.
At 31 December 2025, 1,592,577 shares were held in treasury (2024: 1,723,650),
representing 1.7% (2024: 1.8%) of issued share capital. The shares held in
treasury do not have voting rights. The number of ordinary shares with voting
rights was 92,171,774 (2024: 95,776,739), therefore the total issued share
capital at 31 December 2025 was 93,764,351 ordinary shares (2024: 97,500,389
ordinary shares).
12. Other reserves
Merger Share option Foreign exchange Share Total other
reserve reserve reserve reserve reserves
£m £m £m £m £m
At 1 January 2024 2.3 7.2 (1.9) (0.7) 6.9
Issue or reissue of shares - (2.0) - - (2.0)
Share-based payment expense - 2.2 - - 2.2
Share buyback(1) - - - (27.3) (27.3)
Treasury share allocations(2) - - - 3.3 3.3
Other comprehensive expense - - (1.3) - (1.3)
At 31 December 2024 2.3 7.4 (3.2) (24.7) (18.2)
At 1 January 2025 2.3 7.4 (3.2) (24.7) (18.2)
Issue or reissue of shares - (1.2) - - (1.2)
Share-based payment expense - 2.2 - - 2.2
Treasury share allocations(2) - - - 1.9 1.9
Other comprehensive income - - 9.0 - 9.0
At 31 December 2025 2.3 8.4 5.8 (22.8) (6.3)
1 Represents shares purchased under the 2024 buyback programme which were held
in Treasury. Shares purchased under the 2025 buyback programme were
immediately cancelled.
2 Treasury shares allocations are treasury shares which have been used to
satisfy share options and other employee share plans.
13. Business combinations
Summary of acquisitions 2025
On 19 February 2025 the Group completed the acquisition of 100% of SF
Technologies Holdings GmbH ("Starface"). Germany holds strategic importance
for Gamma, as it represents the largest, and growing, cloud PBX market in
Europe, with significantly lower cloud penetration in a larger SME market than
the UK. The acquisition of Starface delivers on our strategy to establish a
new anchor in the European business, alongside our well-established UK
business. Starface is a market leader in the provision of proprietary business
communication and collaboration software solutions, tailored to fit the needs
of the German market. The company predominantly serves SME businesses in
Germany, as well as enterprises and the public sector via its nationwide
Channel Partner network, which also covers Austria and Switzerland.
The fair value of identifiable assets acquired and liabilities assumed, which
are final, is as follows:
£m
Tangible fixed assets(1) 7.3
Intangible assets - customer relationships 87.7
Intangible assets - development costs 14.9
Intangible assets - brand 6.6
Cash and cash equivalents 14.8
Inventories 0.9
Trade and other receivables 3.8
Trade and other payables (3.7)
Lease liabilities (6.5)
Current tax liability (4.5)
Bank loans(2) (14.6)
Contract liabilities (9.1)
Deferred tax liability(3) (34.0)
Total identifiable assets 63.6
Add: Goodwill 88.8
Net assets acquired 152.4
1 Included within tangible fixed assets is £6.5m of right-of-use assets and
£0.8m of property, plant and equipment.
2 Bank loans of £14.6m were repaid at the time of acquisition.
3 Deferred tax liability arising on customer relationships, development costs
and brand intangible assets.
The value of the goodwill represents the prospective future economic benefits
that are expected to accrue from enhancing the portfolio of products available
to the Group's existing customers and access to new customers. The goodwill is
not deductible for tax purposes. The useful economic lives applied to the
Starface intangible assets are: customer relationships 20 years, development
costs 7 years and brand 7 years.
Total
£m
Satisfied by:
Cash paid 152.4
Total 152.4
£167.0m was the total payment for the acquisition of Starface, gross of
£14.8m of cash acquired and including £14.6m to repay, at the time of
acquisition, all Starface bank loans. The acquisition consideration reported
in the Consolidated statement of cash flows is £137.6m being the £152.4m
cash payment of the equity less the £14.8m cash acquired.
Starface acquisition related costs of £5.1m were recognised as an expense
within operating expenses in the Consolidated statement of profit or loss.
Given their non-recurring nature and materiality, these costs have been
classified as exceptional, see note 4. To fund the acquisition of Starface the
Group agreed a RCF, for details on issue costs refer to note 10.
Starface contributed £35.7m of revenue, £9.4m to the Group's profit before
tax and £6.7m to the Group's profit after tax for the period between the
acquisition date and 31 December 2025. If Starface had been acquired on 1
January 2025 the contribution to the Group's revenue for the period would have
been £40.6m and the contribution to the Group's profit before tax and profit
after tax would have been £10.4m and £7.4m, respectively.
During the period the Group also acquired 100% of the share capital of Allnet
Solutions Limited (known as "Allnet") for total consideration of £2.9m (gross
of £1.4m of cash acquired) and the trade and assets of Desatel B.V. (known as
"Desatel") for total consideration of £1.5m. Fair value accounting for these
acquisitions is completed and customer relationship intangibles assets of
£Nil and £0.6m, brand of £Nil and £0.2m and goodwill of £2.4m and £1.1m
respectively have been recognised. In addition, Allnet's opening balance sheet
included a right‑of‑use asset of £1.3m, including £0.3m dilapidation
provision.
Net cash outflow on acquisitions:
Starface Desatel Allnet Other Total
£m £m £m £m £m
Cash consideration 152.4 1.5 2.9 - 156.8
Less: cash acquired (14.8) - (1.4) - (16.2)
137.6 1.5 1.5 - 140.6
Deferred consideration payments during the year(1) - - - 4.0 4.0
Contingent consideration payments during the year(2) - - - 0.1 0.1
Net outflow of cash - investing activities (Acquisition of subsidiaries net of 137.6 1.5 1.5 4.1 144.7
cash acquired)
Repayment of bank loans(3) 14.6 - - - 14.6
Net outflow of cash - financing activities (Repayment of borrowings acquired 14.6 - - - 14.6
with acquisitions)
Net cash outflow relating to acquisitions in the year 152.2 1.5 1.5 4.1 159.3
1 Deferred consideration relates to fixed amounts payable with regard to
acquisitions. Other relates to £3.8m Placetel and £0.2m Bright Cloud.
2 See note 10 Financial Instruments.
3 Banks loans of £14.6m were repaid at the time of acquisition.
Summary of acquisitions 2024
During 2024 the Group acquired Coolwave Communications Limited ("Coolwave"),
BrightCloud Group Limited ("BrightCloud") and BroadSoft Germany GmbH (known as
"Placetel"). The fair value accounting for Coolwave and BrightCloud was
completed and disclosed in 2024. The fair value accounting for Placetel was
provisionally disclosed in 2024. This has now been completed and no changes in
the reported fair values have been made.
14. Events after the reporting date
Share buyback
In January 2026, the Group appointed Investec Bank plc to manage a share
buyback programme to purchase ordinary shares of £0.0025 each in Gamma
Communications plc for an aggregate purchase price of up to £42.5m within
certain pre-set parameters (the "Programme"). The company has authorised the
Programme to continue while it retains the authority from shareholders to
repurchase such ordinary shares until the earlier of (i) the maximum aggregate
consideration payable by the Company has been reached or (ii) 31 December
2026, subject to the maximum aggregate number of shares not exceeding the
authority conferred by shareholders at the 2025 AGM or any renewal of such
authority at the 2026 AGM. The Programme will be conducted by the Company in
accordance with and under the terms of the general authority granted to the
Board by the Company's shareholders. Share purchases will be made by Investec
on the Company's behalf and, in the case of any purchases made during closed
periods, shall be made independently of and uninfluenced by the Company. The
purpose of the Buyback Programme is to reduce the Company's share capital (any
shares repurchased for this purpose will be cancelled) and to enable the
Company to meet obligations arising from share option programmes (any shares
repurchased for this purpose will be held in treasury).
At 20 March 2026, 1,002,213 ordinary shares have been purchased and cancelled
under the Programme for an aggregate value of £9.0m.
In January 2026, the Group also announced the intention to launch a further
£42.5m share buyback in FY 2027, returning up to £85m in aggregate.
Alternative Performance Measures
The Group uses certain non-GAAP measures, called APMs, to assess the financial
performance of its business as outlined below. These are used by management
for internal performance analyses. The presentation of these APMs facilitates
comparability with other companies, although the Group's measures may not be
calculated in the same way as similarly titled measures reported by other
companies. These measures are also useful in connection with discussions with
the investment community. They should not be considered in isolation or as a
substitute for analysis of the Group's results reported under IFRS.
An explanation of the relevance of each of the APMs and a reconciliation of
the APM to the most directly comparable measure calculated and presented in
accordance with IFRS are set out below.
Some APMs have the prefix 'Adjusted'. These APMs are all adjusted to exclude
the impact of exceptional items (by virtue of their size, nature or incidence)
as per Note 4 and other adjusting items, to show the Group's core performance.
Certain APMs are also adjusted for specific other items which are described in
the relevant APM definition below. Other adjusting items total £0.2m expense
(2024: £1.4m gain) and comprise i) consistent with the prior year, the
incremental costs of the implementation of new cloud-based Finance and HR
systems of £1.8m (2024: £1.4m), partially offset by ii) new in the year, the
mark to market movement on USD forward exchange contracts and the foreign
exchange movement on the Placetel deferred consideration totalling a £1.6m
gain (2024: £Nil). These are adjusted as i) the total incremental cost of the
new systems over the implementation period is considered significant and ii)
the mark to market movements of the forward exchange contracts and foreign
exchange movements on the deferred consideration are driven by macro-economic
factors and are not linked to the Group's trading performance. The adjustment
for foreign exchange movements is limited to the Placetel deferred
consideration as the deferred considerations payments are, in part, fixed by
the forward exchange contracts and therefore the two transactions are
considered linked.
The Group has also defined Adjusted free cash flow and return on capital
employed ("ROCE"), as below, as new APMs in the year. Adjusted free cash flow
has been included as it aids understanding of the Group's ability to fund its
development, selective M&A or returns to shareholders, from its trading
cashflows. ROCE has been included to measure the efficiency of the Group's
profit generation from capital employed.
EBITDA and Adjusted EBITDA
EBITDA is presented because it is widely used by securities analysts,
investors and our peer group internationally to evaluate the profitability of
companies. EBITDA is defined as profit before tax excluding finance expense,
finance income, depreciation of property, plant and equipment, right-of-use
asset depreciation and amortisation of intangible assets. EBITDA eliminates
potential differences in core financial performance that can be caused by
variations in capital structures (affecting net finance costs), tax positions
(such as the availability of brought forward losses against which taxable
profits can be relieved), the cost and age of property, plant and equipment
and right-of-use assets (affecting relative depreciation expense), and the
extent to which intangible assets are identifiable (affecting relative
amortisation expense).
Adjusted EBITDA is a primary profit measure used internally by the Board to
assess financial performance of the Group and its segments. It is defined as
EBITDA adding back exceptional items and other adjusting items. The following
table is a reconciliation from statutory profit before tax for the year, to
EBITDA and Adjusted EBITDA:
2025 2024
£m £m
Profit before tax 87.7 95.6
Finance income (2.9) (7.1)
Finance expense 6.1 1.8
Profit from operations 90.9 90.3
Depreciation of property, plant and equipment and right-of-use assets 12.0 11.7
Amortisation from intangible assets excluding business combinations 9.4 8.7
Amortisation from intangible assets arising due to business combinations 18.6 13.4
EBITDA 130.9 124.1
Exceptional items 10.6 -
Other adjusting items 0.2 1.4
Adjusted EBITDA 141.7 125.5
Adjusted profit before tax
Adjusted PBT is defined as profit before tax excluding exceptional items and
other adjusting items, the amortisation of intangibles arising due to business
combinations and the unwinding of discounting on acquisition-related
liabilities. These items are individually material items and/or are not
considered to be representative of the trading performance of the Group.
Amortisation of intangibles arising due to business combinations is excluded
because this charge is a non-cash accounting item based on judgements about
the assets' value and economic life. Its exclusion is consistent with industry
peers and how certain external stakeholders monitor the performance of the
business. Unwinding of discounting on acquisition-related liabilities is
excluded because the amounts are non-cash accounting items and bear no
relation to the Group's trading performance in the year. This adjustment
improves comparability between acquired and organically grown operations.
Adjusted PBT is the primary profit measure used internally to reward
employees.
2025 2024
£m £m
Profit before tax 87.7 95.6
Exceptional items 10.6 -
Other adjusting items 0.2 1.4
Amortisation of intangibles arising due to business combinations 18.6 13.4
Unwinding of discounting on acquisition-related liabilities 2.3 1.5
Adjusting items 31.7 16.3
Adjusted profit before tax 119.4 111.9
Adjusted earnings per share (fully diluted)
Adjusted earnings per share ("EPS") (fully diluted) is presented as management
believes it is important for understanding the changes in the Group's fully
diluted EPS, including improving comparability between acquired and
organically grown operations. Adjusted EPS (fully diluted) is defined as
Diluted EPS where the earnings attributable to ordinary shareholders are
adjusted by excluding exceptional items, other adjusting items, amortisation
of intangibles arising due to business combinations and unwinding of
discounting on acquisition-related liabilities (for the same reasons outlined
previously in relation to Adjusted PBT) and the tax on all of these items. To
not exclude the tax impact of these items would give an incomplete picture.
These items are individually material and/or are not considered to be
representative of the trading performance of the Group. They also have a
collectively material impact on EPS. In addition, Adjusted EPS has been
amended in the year to remove the benefit of a successful historical patent
box claim, given its multi-year nature which does not reflect current period
trading performance.
2025 2024
Earnings per ordinary share - fully diluted (pence) 69.3 72.0
Adjusted earnings per ordinary share - fully diluted (pence) 94.5 85.1
2025 2024
£m £m
Profit after tax attributable to the ordinary equity holders of the Company 64.9 69.8
Adjusting items:
Exceptional items 10.6 -
Other adjusting items 0.2 1.4
Amortisation of intangibles arising due to business combinations 18.6 13.4
Unwinding of discounting on acquisition-related liabilities 2.3 1.5
Patent box (1.9) -
29.8 16.3
Tax relating to adjusting items (6.2) (3.6)
Adjusted profit after tax attributable to the ordinary equity holders of the 88.5 82.5
Company
2025 2024
Shares: No. No.
Diluted weighted average number of ordinary shares 93,694,320 96,982,528
Net debt/ cash
Net debt/ cash is presented as it is an important liquidity measure used by
management and the Board. Net debt/ cash is defined as borrowings less cash
and cash equivalents. IFRS 16 lease liabilities and contingent consideration
are not considered as debt for the purpose of quoting Net debt/ cash.
2025 2024
£m £m
Cash and cash equivalents 23.7 153.7
Borrowings (33.0) -
Net (debt)/ cash (9.3) 153.7
The following table is a reconciliation of the movements in Net debt/ cash
from previously reported years:
Cash and Net (debt)/ cash
cash equivalents Borrowings £m
£m £m
At 1 January 2024 136.5 (1.7) 134.8
Repayments - 1.5 1.5
Net increase in cash and cash equivalents 17.8 - 17.8
Effects of foreign exchange rate changes (0.6) 0.2 (0.4)
At 31 December 2024 153.7 - 153.7
Drawdown of borrowings 108.5 (108.5) -
Repayment of borrowings (75.5) 75.5 -
Borrowings acquired with acquisitions - (14.6) (14.6)
Repayment of borrowings acquired with acquisitions (14.6) 14.6 -
Interest paid (3.0) 3.0 -
Interest costs - (2.6) (2.6)
Amortisation of deferred finance fees - (0.4) (0.4)
Other non-borrowing related movements in cash and cash equivalents (146.5) - (146.5)
Net movement before the effect of exchange rate changes (131.1)(1) (33.0) (164.1)
Effects of exchange rate changes 1.1 - 1.1
At 31 December 2025 23.7 (33.0) (9.3)
(1) Net decrease in cash and cash equivalents per the Consolidated statement
of cash flows.
Return on capital employed ("ROCE")
ROCE is presented as it measures the efficiency of the Group's profit
generation from capital deployed. It is an important measure of efficiency. It
is defined as profit from operations before exceptional items, other adjusting
items and amortisation arising from business combinations (for the same
reasons outlined previously in relation to Adjusted PBT), divided by Capital
employed. Capital employed is defined as Net debt/ cash plus lease liabilities
(excluding leases in a finance sub-lease), acquisition-related liabilities and
equity.
It is a new measure introduced this year and we have also presented the 2024
comparative to aid understanding. The acquisition of Starface in 2025 was
material to the Group and rebased the underlying future Group ROCE. We have
therefore chosen to present the 2024 comparative on a pro forma basis in order
to, in our view, aid comparability of the periods. To calculate the 2024 pro
forma, we have therefore added the 2025 Starface Capital employed to the 2024
Group Capital employed and we have added the 2025 Starface Adjusted profit
from operations to the 2024 Group Adjusted profit from operations. By doing
this, we establish a proxy which better enables comparability between the
periods.
2025 2024
£m Pro Forma
£m
Net debt/ (cash) 9.3 (153.7)
Lease liabilities 15.7 7.9
Acquisition-related liabilities 23.0 26.5
Equity 385.0 372.7
Starface 2025 capital employed - 169.6
Capital employed 433.0 423.0
Profit before tax 87.7 95.6
Finance income (2.9) (7.1)
Finance expense 6.1 1.8
Profit from operations 90.9 90.3
Exceptional items 10.6 -
Other adjusting items 0.2 1.4
Amortisation of intangibles arising due to business combinations 18.6 13.4
Starface 2025 Adjusted profit from operations - 11.0
Adjusted profit from operations 120.3 116.1
ROCE 27.8% 27.4%
Adjusted cash conversion
Adjusted cash conversion is presented as management believe it is important to
understand the Group's conversion of Adjusted EBITDA to cash. The Group's
Adjusted cash conversion is defined as cash generated by operations excluding
the cash impact of exceptional items, other adjusting items and non-recurring
acquisition related timing differences, divided by Adjusted EBITDA, so as to
exclude the impact of significant or one-off transactions outside the normal
course of trading. Adjustments in respect of non-recurring acquisition-related
timing differences are:
i) to exclude the one-off payment in 2025 of an acquired £1.7m non-trading
related Placetel liability (for which no expense was recognised as this was
accrued in the acquired balance sheet); and
ii) To reclassify £4.0m of cash inflows from "Net cash used in investing
activities" to "Cash generated by operations". This is in relation to £4.0m
of Starface maintenance revenues that were recognised following the
acquisition by Gamma, but for which the corresponding cash was collected by
Starface prior to the acquisition. This adjustment is in our view necessary,
as without it, the cash in question forms part of the acquired balance sheet
and is included within "Net cash used in investing activities", which is a
disconnect from the related revenue which is part of operating activities.
This will not repeat, as in future years, both revenue recognition and cash
collection will be part of operating activities, with Starface part of the
Gamma group for the whole of the year.
Adjusted cash conversion is used to track and measure timing differences
between profitability and cash generation through working capital management,
including seasonality or one-offs.
2025 2024
£m £m
Cash generated by operations 115.1 116.8
Cash impact of exceptional items 9.4 2.7
Cash impact of other adjusting items 1.6 0.9
Cash impact of non-recurring acquisition-related timing differences 5.7 -
Adjusted cash generated by operations 131.8 120.4
Adjusted EBITDA 141.7 125.5
Adjusted cash conversion 93% 96%
Adjusted free cash flow
Adjusted free cash flow is presented as management believe it aids
understanding of the Group's ability to fund its development, selective
M&A or returns to shareholders from its trading cashflows. Adjusted free
cash flow is defined as Adjusted cash generated by operations, less taxes paid
and the purchases of property, plant and equipment and intangible assets.
2025 2024
£m £m
Adjusted cash generated by operations 131.8 120.4
Taxes paid (26.7) (23.9)
Purchases of property, plant and equipment (4.8) (4.9)
Purchases of intangible assets (19.5) (14.3)
Adjusted free cash flow 80.8 77.3
Organic growth
Organic growth is presented as management believe it is important to
understand performance on a comparable basis. It is defined as total reported
growth excluding the contribution of material acquisitions for the first 12
months of ownership ("Inorganic growth") and excludes the contribution of
material disposals for the last 12 months of ownership, and excluding the
impact of foreign exchange movements on the consolidation of our international
operations (calculated by taking the current year local currency results
translated into Pounds Sterling at the preceding year's foreign exchange rate
(1.182:1 Euros to Pound Sterling) and defined as "Constant currency"). It is
used for internal performance analysis as it aids comparison of the current
year to prior years without being affected by factors which were not present
in both periods. It is calculated at an operating segment level and Group
level for revenue and gross profit. It is also calculated for Adjusted EBITDA
at a Group level.
Current year
Year Components of growth Total reported growth Year
ended 31 December
Ended 31 December
2024
2025
Organic growth Inorganic growth Constant currency
Revenue £m £m % £m % £m % £m % £m
Gamma Business 368.9 5.3 1% 0.4 0% - - 5.7 2% 374.6
Gamma Enterprise 126.5 (0.4) 0% 4.4 3% - - 4.0 3% 130.5
Gamma Germany 54.3 0.8 1% 54.0 99% 1.1 2% 55.9 103% 110.2
Other Europe 29.7 0.5 2% - - 0.3 1% 0.8 3% 30.5
Group revenue 579.4 6.2 1% 58.8 10% 1.4 0% 66.4 11% 645.8
Prior year
Year Components of growth Total reported growth Year
ended 31 December
ended 31 December
2023
2024
Organic growth Inorganic growth Constant currency
Revenue £m £m % £m % £m % £m % £m
Gamma Business 332.2 17.6 5% 19.1 6% - - 36.7 11% 368.9
Gamma Enterprise 110.1 6.7 6% 9.7 9% - - 16.4 15% 126.5
Gamma Germany 47.4 1.0 2% 7.6 16% (1.7) (4%) 6.9 15% 54.3
Other Europe 32.0 (1.7) (5%) - - (0.6) (2%) (2.3) (7%) 29.7
Group revenue 521.7 23.6 5% 36.4 7% (2.3) 0% 57.7 11% 579.4
Current year
Year Components of growth Total reported growth Year
ended 31 December
ended 31 December
2024
2025
Organic growth Inorganic growth Constant currency
Gross profit £m £m % £m % £m % £m % £m
Gamma Business 194.7 (4.1) (2%) 0.2 0% - - (3.9) (2%) 190.8
Gamma Enterprise 60.2 (2.3) (4%) 2.4 4% - - 0.1 0% 60.3
Gamma Germany 26.4 2.9 11% 48.4 183% 0.7 3% 52.0 197% 78.4
Other Europe 19.0 (0.5) (3%) - - 0.2 1% (0.3) (2%) 18.7
Group gross profit 300.3 (4.0) (1%) 51.0 17% 0.9 0% 47.9 16% 348.2
Prior year
Year Components of growth Total reported growth Year
ended 31 December
ended 31 December
2023
2024
Organic growth Inorganic growth Constant currency
Gross profit £m £m % £m % £m % £m % £m
Gamma Business 176.1 10.7 6% 7.9 4% - - 18.6 11% 194.7
Gamma Enterprise 52.6 3.2 6% 4.4 8% - - 7.6 14% 60.2
Gamma Germany 19.2 1.7 9% 6.1 32% (0.6) (3%) 7.2 38% 26.4
Other Europe 19.3 0.3 2% - - (0.6) (3%) (0.3) (2%) 19.0
Group gross profit 267.2 15.9 6% 18.4 7% (1.2) 0% 33.1 12% 300.3
Current year
Year Components of growth Total reported growth Year
ended 31 December ended 31 December
2024 2025
Organic growth Inorganic growth Constant currency
£m £m % £m % £m % £m % £m
Group Adjusted EBITDA 125.5 0.5 0% 15.5 12% 0.2 0% 16.2 13% 141.7
Prior year
Year Components of growth Total reported growth Year
ended 31 December ended 31 December
2023 2024
Organic growth Inorganic growth Constant currency
£m £m % £m % £m % £m % £m
Group Adjusted EBITDA 114.3 7.3 6% 4.3 4% (0.4) 0% 11.2 10% 125.5
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