REG - Gamma Communications - Trading Update

Gamma CommunicationsAnnouncement

14/01/2025 07:15

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RNS Number : 1736T  Gamma Communications PLC  14 January 2025

14 January 2025

 

Gamma Communications plc

 

Expectations for full year Adj. EBITDA and Adj. EPS (fully diluted) growth
reconfirmed*

 

Gamma Communications plc ("Gamma" or the "Company"), a leading provider of
technology-based communication services across Europe, issues its scheduled
trading update for the year ended 31 December 2024.

 

Group overview

 

The Board anticipates reporting a group financial performance in line with
market consensus*, with Adjusted EBITDA within the consensus range and
Adjusted EPS (fully diluted) in the upper half. This demonstrates healthy
year-on-year growth for the year ended 31 December 2024, driven by organic
growth and supported by acquisitions.

 

Key trading highlights include:

 

 ·   In the UK, there have been continued strong performances across both the Gamma
     Business and Enterprise business units.
 ·   Both business units delivered gross margins consistent with those in the first
     half of the year.
 ·   Gamma Business demonstrated positive net seat additions across our cloud and
     connectivity suite of products. Gamma has now passed the significant milestone
     of achieving a base of over one million cloud seats in the UK.
 ·   In a competitive market, our Enterprise business continues to perform well. We
     are pleased to have won contracts with notable clients such as Morrisons
     Supermarkets, Equiniti and Quilter, and Dorset NHS and Westminster City
     Council in the public sector.
 ·   Europe continued to perform in line with expectations on a constant currency
     basis, driven by healthy organic growth in Germany, further enhanced by the
     acquisition of Placetel.
 ·   The Company has also announced today that it has reached an agreement to
     acquire the entire issued share capital of SF Technologies Holding GmbH
     (trading as STARFACE), excluding transaction costs, for a cash payment of
     €196m (c.£165m) on a debt-free / cash-free basis, subject to customary
     regulatory clearance. STARFACE is a leading provider of IP telephony solutions
     for SMEs in Germany.

 

Balance sheet

 

The closing net cash balance at 31 December 2024 increased to £153.7m (2023:
net cash £134.8m) driven by Gamma's continued high operating profit cash
conversion. This increase was after the acquisitions of Coolwave and
BrightCloud, as well as the successful completion of the share buyback
programme. The acquisition of STARFACE is expected to be funded through
approximately £125m from Gamma's existing cash resources, with the remaining
£40m funded through a new £130m multicurrency Revolving Credit Facility. The
undrawn portion of the facility will be available for further uses, in line
with Gamma's balanced approach to capital allocation. The debt facility will
have a three-year term, with an option to extend for an additional 12 months.

 

Main Market Listing

 

As highlighted in September and confirmed in our recent update in December,
Gamma intends to move to the Main Market. In line with previous guidance, we
expect to complete the move in Q2 2025 with relevant workstreams progressing
as planned.

 

The Board expects to announce results for the year ended 31 December 2024 and
also give an update on the proposed move to the Main Market, on Tuesday 25
March 2025.

Andrew Belshaw, Chief Executive, commented:

"I am pleased with the results we have achieved in 2024. We have strengthened
key relationships with our technology partners by helping them bring their
products into our market, and with our channel partners, by providing them
with an expanded range of products to sell to their SME customers.

I would like to thank our team for all of their hard work and commitment
throughout the year and look forward to updating shareholders in more detail
on all of the progress we've made in our full-year report in March."

 

* Company compiled range is based on known sell side analyst estimates. The
current consensus ranges for the full year ended 31 December 2024 are Adjusted
EBITDA £124.0m - £127.4m and Adjusted EPS (fully diluted) 80.3p - 88.4p, as
at 13 January.

 

 

 Enquiries:

 Gamma Communications plc                         Tel: +44 (0)333 006 5972

 Andrew Belshaw, Chief Executive Officer

 Bill Castell, Chief Financial Officer

 Rachael Matzopoulos, Company Secretary

 Peel Hunt (NOMAD & Broker)                       Tel: +44 (0)207 418 8900

 Neil Patel / Benjamin Cryer / Kate Bannatyne

 Deutsche Numis (Broker)                          Tel: +44 (0)207 260 1000

 Simon Willis / Hugo Rubinstein / Spencer Clark

 Teneo (PR Adviser)                               Tel: +44 (0)207 353 4200

 James Macey White / Matt Low / Ffion Dash

Notes for editors:

Gamma Communications plc is a leading provider of technology-based
communication services across Europe. Gamma is admitted to trading on AIM and
employs approximately 2,000 people. Offering a range of Unified
Communications, mobile, security and connectivity services, Gamma provides
robust and secure end-to-end business communication solutions, enabling
organisations to communicate, collaborate and offer a better customer
experience.

Gamma's vision is for a better-connected world in which it can work smarter
for the benefit of business, people, and the planet. Its primary market is the
UK, where it delivers network-based services to SME, Public Sector, and
Enterprise markets through its extensive network of trusted channel partners
and direct sales and support capabilities. Expanding its presence in Europe,
Gamma is continuing to grow its group of businesses focused on digital
transformation by delivering services to customers via a network of channel
partners in Germany, Spain, and the Benelux region.

For more information about Gamma and its comprehensive range of products and
services, please visit www.gammagroup.co (http://www.gammagroup.co)

 

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