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

iomartAnnouncement

11/04/2024 07:00

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RNS Number : 1115K  Iomart Group PLC  11 April 2024

11 April 2024

iomart Group plc

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

 

Pre-close Trading Update and Notice of Results

 

iomart Group plc (AIM: IOM), the secure cloud services company, provides its
pre-close trading statement for the year ended 31 March 2024 ahead of the
announcement of its full year results on 11 June 2024.

 

Group trading performance

 

iomart expects to deliver a solid set of full-year financial results which
demonstrate the resilience of the Group in the face of an ongoing challenging
economic backdrop for UK businesses.

 

For the year ended 31 March 2024, the Group expects to report revenue growth
of 10% to approximately £127.0 million (FY23: £115.6 million), adjusted
EBITDA((1)) growth of 4% to approximately £37.5 million (FY23: £36.2
million) and adjusted profit before tax((2)) of approximately £15.0 million
(FY23: £14.8 million), reflecting the increased interest expense in the year
of approximately £4.3 million (FY23: £2.9 million). Recurring revenue
remains high, at c.91% (FY23: 92%) of Group revenue.

 

The Group's cash generation continued to be strong, with the year-end net debt
expected to be approximately £43.0 million (31 March 2023: £39.8 million),
after M&A related cash payments in the year of approximately £15.0
million. This would represent a net debt to adjusted EBITDA((1))  ratio of
approximately 1.1 times (31 March 2023: 1.1 times).

 

The Group has seen good growth in order bookings within its managed services
business, as both existing customers and prospects have responded positively
to our broader solution set and re-invigorated focus on customer service. The
positive financial impact of this has been held back by lower than expected
customer renewal rates in H2, including across the long tail of smaller
customers, that have shown more sensitivity to the energy price rises which
were applied towards the end of FY23. As the Group continues its evolution
towards a broader portfolio of managed service offerings, the impact of
potential lower level of renewals in our smaller customer base and more
commoditised areas of the business will decrease.

 

The Extrinsica acquisition, which completed on 5 June 2023, has brought a
demonstrable increase in the Microsoft based capabilities of the Group, and
increased its revenues year-on-year albeit that growth was tempered by the
delay of some larger orders from existing customers. As a result, none of the
earn-out consideration will now be payable. The process of integration of
Extrinsica within the Group is now well underway, providing the Group's
existing customers with full access to these Microsoft capabilities.
Accesspoint Technologies, acquired on 5 December 2023, is performing in line
with expectations.

 

Lucy Dimes, CEO of iomart Group plc, commented:

 

"I am pleased with the progress achieved in the year, with the increasing
strength of our offering reflected in good order growth. Our resilient
financial results, extensive customer base and deep technical expertise
continue to provide a solid platform for enhanced revenue growth over the
medium term, from extended product solutions, focused sales and marketing
activity and complementary M&A.

 

Our three most recent acquisitions have all added recurring revenue growth in
the post-acquisition period, and we see continued M&A activity as an
important part of strengthening our overall capability and market growth
plans. We continue to be active in the identification of targets which add
skills, experience and capability to enhance our proposition, as we drive the
business to be the UK's leading secure cloud services provider."

 

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
2024 are:

 ·                 Revenue in the range of £128m to £131m;
 ·                 Adjusted EBITDA((1)) in the range of £37.4m to £38.7m; and
 ·                 Adjusted PBT ((2) in the range of £14.3m to £16.0m

 

((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
 Lucy Dimes, Chief Executive Officer & Chair
 Scott Cunningham, Chief Financial Officer

 Investec Bank PLC (Nominated Adviser and Broker)         Tel: 020 7597 4000

 Patrick Robb, Virginia Bull

 Alma Strategic Communications                            Tel: 020 3405 0205
 Caroline Forde, Hilary Buchanan, Kinvara Verdon

 

About iomart Group plc

 

iomart Group plc (AIM: IOM) is a leading secure cloud provider offering hybrid
cloud, data protection and cyber security managed services, underpinned by our
extensive data centre and network infrastructure. Our mission is simple: to
support our customers 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 plus global technology vendor
relationships, our 500-strong team can design, deploy, secure and manage 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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