Picture of iomart logo

IOM iomart News Story

0.000.00%
gb flag iconLast trade - 00:00
TechnologySpeculativeMicro CapContrarian

REG - Iomart Group PLC - Trading Update

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20221011:nRSK4051Ca&default-theme=true

RNS Number : 4051C  Iomart Group PLC  11 October 2022

11 October 2022

iomart Group plc

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

 

Trading Update

 

iomart Group plc (AIM:IOM), the cloud computing company, today provides a
trading update for the six months ended 30 September 2022, ahead of the
announcement of its half year results expected to be released in early
December 2022.

 

Group trading performance

 

We are pleased to report that the Group has performed well through the first
six months of the year with strong cash conversion, improved customer renewal
levels, and continued momentum across all strategic areas, including the
completion of our first acquisition under our new strategy.

 

Customer renewal levels have returned to long-term historic averages which,
when combined with our high levels of recurring revenue, provides visibility
over our full year financial targets and a solid foundation as we transition
towards a secure hybrid cloud offering. Importantly, the recent volatility in
energy markets has presented challenges for the sector, however iomart's
robust business model and customer arrangements have ensured that additional
energy costs have been appropriately passed through to our customer base.

 

Against this backdrop, the Board is pleased to report a solid set of financial
results, showing revenue ahead of the prior period and an EBITDA performance
that reflects both the revenue mix in the period and our continued investment
in the skills and capabilities of our workforce.

 

For the six months to 30 September 2022, the Group expects to report revenue
of approximately £52.5 million (H1 FY22: £51.9 million),
adjusted EBITDA((1)) of approximately £17.8 million (H1 FY22: £19.6
million) and adjusted profit before tax ((2)) of approximately £7.3
million (H1 FY22: £9.1 million).  The mix of the business continues to be
focussed on recurring cloud managed services revenue, which is in line with
management expectations. Non-recurring revenue from hardware and software
reselling activity has not yet recovered. Recurring revenue for the six months
was 95% of the total revenue (H1 FY22: 93%).

 

As announced on 15 August 2022, we successfully completed the first
acquisition under our new strategy, acquiring Concepta Capital Limited
("Concepta"), a holding company for the ORIIUM and Pavilion IT brands, for an
initial cash consideration of £10.5m.  With a long track record and strong
reputation across the indirect channel, the acquisition allows iomart to
broaden our market and customer reach whilst enhancing our product expertise
within the data management service layer. Concepta's trading since the
acquisition has been in line with management's plan.

 

With the acquisition of Concepta and the £1.5m repayment of the acquired bank
loans just ahead of the half year, Group net debt increased as expected to
approximately £48.0 million at 30 September 2022 (31 March 2022: £41.3
million).  The Group's cash generation from trading continues to be strong
and consistent with past performance.

 

Outlook

 

As we see increases in energy costs in the market, we have demonstrated that
our business model and customer arrangements allow us to flex pricing. We
continue to monitor the inflationary environment very closely and will seek to
respond accordingly.

Revenue and profit in the second half of the year are expected to be higher
than the first half, however, in the face of potential economic headwinds, it
is not expected that margins will fully recover and that profit for the full
year is therefore likely to be at the lower end of the Board's original
expectations.

 

Reece Donovan, CEO of iomart Group plc, commented:

 

"Our team has executed well in the first half of the year, finding the correct
balance between managing both the risks and opportunities that we see in the
marketplace.  We have maintained our tight control on costs and have
successfully tested our business model in relation to energy pricing. The
strength of our recurring revenue base, strong profit margins and cash
generation, give us the ability to continue carefully investing in our skills
and capabilities to support the execution of our strategy.

 

The market for cloud computing solutions continues to offer long-term growth
and our strategic actions puts us in a stronger position to benefit from this
opportunity.  Our team, business model and strong financial position ensure
we are well prepared for the year ahead."

 

 

((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

 Peel Hunt LLP (Nominated Adviser and Joint Broker)                                    Tel: 020 7418 8900
 Paul Gillam, James Smith

 Investec Bank PLC (Joint                                                              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/)

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTMMBRTMTIBBRT

Recent news on iomart

See all news