TIDMIOM
RNS Number : 6452N
Iomart Group PLC
01 October 2021
1 October 2021
iomart Group plc
("iomart" or the "Group" or the "Company")
Trading Update
iomart Group plc (AIM:IOM), the cloud computing company, is
today providing a trading update for the six months ended 30
September 2021, ahead of the announcement of its half year results
expected to be released in early December 2021.
Strategically, the Group has continued to make positive progress
in the period against the key milestones announced in May, as part
of the refreshed strategy to re-position iomart's offering around
the growing hybrid cloud market. This includes the launch of a new
brand, the release of new products and the Group's first hybrid
customer win during the period. Being only a few months into the
execution of the refreshed strategy the expected success of the
transition of the business will take time to flow through into
results, however the progress being made provides the Board with
confidence that the Group will return to growth in the medium
term.
While the majority of the customer base has remained stable
(with recurring revenues in the period accounting for 93% of
revenue), the slightly higher than usual customer churn seen in the
final months of FY21 continued into the first half of this current
financial year. In addition, non-recurring revenue, principally
hardware reselling and one-off consultancy activity was GBP2.0m
lower than the equivalent period last year and we do not expect
this revenue to be recovered during H2. As a consequence, the Board
anticipates results for the full year to 31 March 2022 being below
current expectations.
For the six months to 30 September 2021, the Group expects to
report revenue of approximately GBP52.0 million (H1 FY21: GBP56.3
million), adjusted EBITDA (1) of approximately GBP19.5 million (H1
FY21: GBP20.8 million)
and adjusted profit before tax (2) of approximately GBP9.0 million (H1 FY21: GBP9.8 million).
Profit margins have remained strong in the period, at 37% for
adjusted EBITDA and 17% for adjusted PBT. The Group's cash
generation has been good and ahead of the Board's expectations,
with the cash position increasing to approximately GBP26.0 million
at 30 September 2021 (31 March 2021: GBP23.0 million). The revolver
loan drawn amount remains unchanged from last year and along with
lease liabilities the Board expects net debt to be approximately
GBP50.0 million at 30 September 2021 (31 March 2021: GBP54.6
million).
iomart's valuable datacentre and network infrastructure,
market-leading cloud expertise, highly recurring revenue and
significant customer base means the business is well positioned to
execute on its strategy from a strong and stable foundation and
return to growth over the medium term.
Strategic Update
The Group has focused on specific initiatives around the
execution of the strategic plan and has made good progress.
-- Brand development: We delivered a successful launch of our
new iomart brand in early September, which has been well received
by all stakeholders and provides a strong foundation for ensuring
our value proposition and marketing collateral are impactful for
both existing and potential new customers.
-- New product development: we have established a new product
team and have redefined and launched a number of new product
initiatives. These are targeted at both new customers and upselling
and cross-selling to our existing customers. They include specific
campaigns around the growth areas of Digital Workplace, Secure
Connectivity and Managed Microsoft Azure.
-- The iomart team: demand for talent is high and in an effort
to both retain and attract the best possible talent, we have
updated our benefits package, formalised flexible working options
and delivered a number of technical and management training
programmes across the business.
-- Business development: we plan to use selective M&A to
strengthen our technology and product capabilities, while adding
important people skills and competencies in order to support our
growth strategy. During the period we have started to evaluate
potential targets and although the timing of M&A closure is
hard to predict, we are pleased with the positive progress made so
far.
Reece Donovan, CEO of iomart Group plc, commented:
"We are on track to achieve the key milestones of our strategic
refresh which we laid out in May for delivery in FY22. Our team is
energised behind a new brand and vision to attract and retain
quality customers. Sales, operational and organisational
improvements continue to be made which are vital to scale the
business. We are starting to see early signs that the market is
responding to our newly launched offerings. While these successes
will take time to flow through into our financial results, they
provide solid foundations to support future growth."
(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 Tel: 020 7418 8900
Broker)
Edward Knight, Paul Gillam, James Smith
Investec Bank PLC (Joint Broker) Tel: 020 7597 4000
Patrick Robb, Virginia Bull, Sebastian Lawrence
Alma PR Tel: 020 3405 0205
Caroline Forde, Hilary Buchanan, Joe Pederzolli
The information contained within this announcement is considered
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014. Upon the publication
of this announcement via a Regulatory Information Service, this
inside information will be considered to be in the public
domain.
About iomart Group plc
For over 20 years iomart Group plc (AIM: IOM) has been helping
growing organisations to maximise the flexibility, cost
effectiveness and scalability of the cloud. From data centres we
own and operate in the U.K., and from connected facilities across
the globe, we can provide multiple secure infrastructure solutions
from branch office backups, to hyper cloud migrations, and
everything in between, delivered typically with a 24/7 managed
service. Our team of over 400 dedicated staff work with our
customers at the strategy stage through to delivery and ongoing
management, to implement the secure cloud solutions that deliver to
their business requirements.
For further information about the Grou p, please visit www.iomart.com
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END
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