REG - Iomart Group PLC - Trading update

iomartAnnouncement

07/02/2025 07:00

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RNS Number : 2617W  Iomart Group PLC  07 February 2025

7 February 2025

iomart Group plc

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

 

Trading update

 

iomart Group plc (AIM: IOM), the secure cloud services company, provides a
trading update for the year ending 31 March 2025.

 

The acquisition of Atech on 1 October 2024 marked a significant milestone in
the Group's ambition to be the leading secure cloud services provider in the
UK, strengthening our Microsoft credentials, managed security services and
global delivery capabilities. Since completion, trading at Atech has been
strong, at both the revenue and profit level, and aligned with our
expectations at the time of the acquisition. Atech is also contributing
positively to our Group's objective to pivot our product portfolio and
capabilities into the faster growing areas of the cloud sector.

 

Within the existing core iomart business, order bookings remain strong,
demonstrating that strategic investments in the product portfolio and
go-to-market approach are delivering results. However, recent trading has seen
an acceleration in customer churn in the self-managed infrastructure base,
which includes a long tail of smaller customers, along with lower renewal
levels in private cloud managed services. Given the fixed cost nature of our
data centers and network infrastructure, these faster than anticipated shifts
in revenue have an amplified impact on profit contribution.

 

With growth in newer offerings offsetting legacy business declines, the Board
continues to anticipate revenue for the year ending 31 March 2025 to be
broadly in line with market expectations. However, the accelerated shift in
revenue mix towards higher growth, lower margin services results in the Board
now expecting adjusted EBITDA at approximately 10% below current market
expectations. The Group's depreciation, amortisation and interest charges are
predictable, meaning these impacts will similarly flow through to Adjusted
EBIT and Adjusted PBT. The Board expects net debt levels at 31 March 2025 to
broadly align with current market expectations.

 

Our "bigger, better, bolder" strategy and the Atech acquisition is focused on
pivoting the business toward higher growth segments, which will establish a
more resilient and scalable foundation for the future. This strategic
realignment is designed to drive long-term value creation, and we are actively
seeking to optimise our infrastructure fixed cost base to reflect our changing
revenue profile.

 

The Board remains committed to delivering sustainable, long-term growth and is
taking decisive action to position the business for future success.

 

Lucy Dimes, CEO of iomart Group plc, commented:

 

"We have seen continued positive new order bookings across both the iomart and
Atech offerings and are starting to see the power of the combined business
flow through. However, transformation takes time, and churn within legacy
offerings continues to present a headwind. We will continue to optimise our
cost structure, while pivoting the portfolio to higher growth segments, and
are confident that we have the right team and offerings to achieve our bold
ambitions."

 

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
2025 are:

·        Revenue in the range of £142m to £143m;

·        Adjusted EBITDA((1)) in the range of £37.0m to £38.0m; and

·        Adjusted PBT ((2) in the range of £10.1m to £10.8m

·        Net Debt in the range of £95m to £98m

 

((1))adjusted EBITDA means earnings before interest, tax, depreciation,
amortisation, share based payment charges, forex gains or losses on long term
cash flow hedges , acquisition related costs and non-recurring items.

 ((2))adjusted profit before tax means profits before, tax, share based
payment charges, amortisation of acquired intangibles, forex gains or losses
on long term cash flow hedges, acquisition related costs and non-recurring
items.

This announcement contains inside information for the purposes of assimilated
Regulation (EU) No.596/2014, as it forms part the laws of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018 (as amended). The person
responsible for releasing this announcement on behalf of the Company is Scott
Cunningham, CFO.

For further information:

 iomart Group plc                                                                      Tel: 0141 931 6400
 Lucy Dimes, Chief Executive Officer
 Scott Cunningham, Chief Financial Officer

 Investec Bank PLC (Nominated Adviser and                                              Tel: 020 7597 4000
 Broker)
 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 one of the UK's leading provider of secure
cloud managed services, simplifying the complexities of modern technology for
businesses. Our team of 650+ experts deliver cutting-edge solutions in cloud
infrastructure, modern workplace management, and managed security services
that enable our customers to innovate, protect, and scale their businesses.

We proudly hold one of the UK's most extensive sets of Microsoft credentials,
including Azure Expert MSP, six Solution Designations, and membership in
Microsoft's Intelligent Security Association (MISA). As well as being a
top-tier Broadcom Pinnacle Partner for VMware Cloud. Which means we can bring
the latest technologies in hybrid cloud, data protection, and cyber resiliency
to meet the evolving needs of our customers.

 

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

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