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:
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·
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Revenue in the range of £128m to £131m;
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·
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Adjusted EBITDA(1) in the range of £37.4m to
£38.7m; and
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·
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Adjusted PBT (2
in the range of
£14.3m to £16.0m
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(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:
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iomart Group plc
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Tel: 0141 931 6400
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Lucy Dimes, Chief Executive Officer
& Chair
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Scott Cunningham, Chief Financial
Officer
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Investec Bank PLC (Nominated Adviser and Broker)
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Tel: 020 7597
4000
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Patrick Robb, Virginia
Bull
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Alma Strategic Communications
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Tel: 020 3405 0205
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Caroline Forde, Hilary Buchanan,
Kinvara Verdon
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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