REG - Iomart Group PLC - Pre-close Trading Update and Notice of Results

iomartAnnouncement

12/04/2023 07:00

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RNS Number : 8919V  Iomart Group PLC  12 April 2023

12 April 2023

iomart Group plc

("iomart" or the "Group" or the "Company")

 

Pre-close Trading Update and Notice of Results

 

Positive close to the year provides solid basis for FY24

 

iomart Group plc (AIM: IOM), the cloud computing company, provides its
pre-close trading statement for the year ended 31 March 2023 ahead of the
announcement of its full year results in June.

 

Group trading performance

iomart is pleased to report that it expects to deliver full-year financial
results in line with market expectations*. The Group has seen stability of
customer renewal rates across all areas of the business, providing a solid
base of recurring revenues. Meanwhile the sales pipeline improvement noted in
H1 converted into stronger order booking levels in H2, providing positive
momentum as the Group enters the new financial year.

 

For the year ended 31 March 2023, the Group expects to report revenue of
approximately £115 million (FY22: £103.0 million), adjusted EBITDA((1)) of
approximately £36.2 million (FY22: £38.0 million) and adjusted profit
before tax((2)) of approximately £14.6 million (FY22: £17.1 million).

 

The revenue of £115 million is a record level for the Group and is a
combination of a return to long-term historic customer renewal levels,
inflationary pricing adjustments, primarily for datacentre energy usage, plus
the successful completion of the acquisition of Concepta Capital Limited in
August 2022. Non-recurring revenue is expected to be approximately £9.2
million (FY22: £7.1 million) meaning recurring revenue remains high at 92% of
total revenue (FY22: 93%).

 

The datacentre sector as a whole has had to navigate the significant
challenges in the energy markets and during the year the Group's electricity
costs increased by approximately £7 million. iomart's robust business model
and customer arrangements have ensured this additional energy cost has been
appropriately passed through to the customer base. The Group's adjusted EBITDA
reflects both the revenue mix in the year together with investment in
upskilling our employees' capabilities, alongside appropriate wage increases
and cost of living support. EBITDA margin in the year was heavily impacted by
the pass through of energy costs and to a lesser extent lower margin within
the Concepta acquisition, primarily from their reselling activities. The
increase in the UK interest rates has pushed the Group's interest expense up
by approximately £0.9m year on year.

 

The Group's cash generation continued to be strong, with the year-end net debt
expected to be approximately £41 million (31 March 2022: £41.3 million).
This represents a net debt to adjusted EBITDA ratio of 1.1 times (31 March
2022: 1.1 times).

 

Notice of Results

The Group expects to announce its results for the year ended 31 March 2023 on
13 June 2023.

 

Reece Donovan, CEO of iomart Group plc, commented:

 

"I am pleased with the progress achieved this year in our transition to a
secure hybrid cloud offering.  We saw our pipeline improve in the first half
and this converted to stronger order booking levels as we completed the year.
The team has worked hard to ensure momentum in the execution of our strategic
plan and continuous improvement within the business. This gives us confidence
that we will continue to be successful within the wider growing cloud sector."

 

*Note: Company compiled range is based on known sell-side analyst estimates.
The latest known sell-side analyst estimates for the full year ended 31 March
2023 are:

·        Revenue in the range of £105m to £116m;

·        Adjusted EBITDA((1)) in the range of £34.6m to £37.6m; and

·        Adjusted PBT ((2)) in the range of £13.5m to £15.9m

 

((1))adjusted EBITDA means earnings before interest, tax, depreciation,
amortisation, share based payment charges, gains or losses on revaluation of
contingent consideration, acquisition related costs and non-recurring items.

 ((2))adjusted profit before tax means profits before, tax, share based
payment charges, amortisation of acquired intangibles,  gains or losses on
revaluation of contingent consideration, acquisition related costs and
non-recurring items.

For further information:

 iomart Group plc                                                                      Tel: 0141 931 6400
 Reece Donovan, Chief Executive Officer
 Scott Cunningham, Chief Financial Officer

 Investec Bank PLC (Nominated Adviser and                                              Tel: 020 7597 4000
 Broker)
 Patrick Robb, Virginia Bull, Nick Prowting

 Alma PR                                                                               Tel: 020 3405 0205
 Caroline Forde, Hilary Buchanan, Joe Pederzolli

 

About iomart Group plc

 

iomart Group plc (AIM: IOM) is a cloud computing and IT managed services
business providing hybrid cloud infrastructure, network connectivity,
security, and digital workplace capability. Our mission is simple: to make our
customers unstoppable by enabling them to connect, secure and scale anywhere,
anytime. From our portfolio of data centres we own and operate across the UK
to connected sites around the world, our 400-strong team can design and deploy
the right cloud solution for our customers.

 

For further information about the Group, please visit  www.iomart.com
(http://www.iomart.com/)

 

 

 

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