Gamma Communications PLC Trading Statement (1487L)
11 Gennaio 2021 - 8:00AM
UK Regulatory
TIDMGAMA
RNS Number : 1487L
Gamma Communications PLC
11 January 2021
11 January 2021
Gamma Communications plc
Trading Update
UCaaS product suite continues to deliver strong growth
Full year adj EBITDA and adj EPS anticipated to be slightly
ahead of market expectations
Gamma Communications plc ("Gamma"), a leading provider of
Unified Communication as a Service ("UCaaS"), announces a trading
update for the year ended 31 December 2020.
Trading
We are pleased to report a financial performance significantly
ahead of last year with adjusted EBITDA and adjusted EPS for the
year ended 31 December 2020 expected to be slightly ahead of the
range of market forecasts; revenues are expected to be towards the
top of the range of expectations*. This performance reflects a
continued strong demand in the UK and European business markets for
Gamma's portfolio of UCaaS products.
Cash
The closing gross cash balance for the year was GBP54.1m
compared to GBP53.9m at the end of the previous year. Net cash was
GBP48.4m due to a small amount of debt within companies which were
acquired.
The closing cash balance is above market expectations due to the
sale of "The Loop". On 31 December 2020 Gamma sold its non-core
Manchester based fibre business which traded as "The Loop" for an
undisclosed sum. The business sold consisted of a duct and sub-duct
based fibre network in Greater Manchester together with the
customer base which includes major data centre operators,
enterprises and public sector organisations. Gamma previously
reported revenue of GBP0.7m for The Loop for the first half of
2020.
The increase in cash balance from the previous year end is
pleasing given that during the year Gamma spent GBP48.0m on
acquisitions. These acquisitions have given Gamma an entry into
both the German and Spanish markets as well as increasing both our
market presence and product capabilties in the UK and the
Netherlands.
Gamma has also maintained its dividend policy, despite the Covid
19 pandemic, and paid dividends to shareholders totalling GBP10.4m
in 2020. It did not receive any government funding or support.
Overview of the year
Some of the highlights from the year include:
-- The business performed well throughout 2020 despite the
economic downturn caused by Covid-19. Its recurring revenue model
has proved robust and its product set supports businesses which
have had to work remotely. The group has seen cancellations and bad
debt remain at the low levels experienced historically.
-- During the year, the group acquired UCaaS providers in two
additional countries - Voz Telecom (Spain) and HFO Telecom
(Germany). Integration is going well. The UCaaS market in both
countries is significantly less developed than in the UK but is
expected to grow rapidly.
-- Gamma also acquired Exactive in the UK (which supports
companies wishing to use Microsoft Teams as a UCaaS solution) and
GnTel in the Netherlands (which provides a product capability and
opens up a new route to market through partners who are based in
the IT space)
-- The group has continued to develop its product suites and
expects to launch its Cloud Contact Centre as a Service ("CCaaS")
solution during the first half of 2021; this will be targeted at
the SME market.
The Board expects to announce results for the year ended 31
December 2020 on Tuesday 23 March.
Andrew Taylor, Chief Executive, commented on the results:
"We are pleased that Gamma has continued to grow strongly whilst
also geographically expanding into Spain and Germany. The execution
of our UCaaS product strategy is progressing very well and our
product set has continued to perform well and has enabled our end
users to work flexibly during the difficult conditions prevalent in
2020. I would like to thank our staff and partners for all of their
hard work throughout the year. "
END
* Note: Company compiled consensus ranges for Revenue are
GBP371.8m - GBP396.7m; Adjusted EBITDA GBP73.9m - GBP76.0m; and
Adjusted EPS 47.0p - 51.0p.
Gamma Communications plc Tel: +44 (0) 333 006 5972
Andrew Taylor, Chief Executive
Officer
Andrew Belshaw, Chief Financial
Officer
Tulchan Communications LLP Tel: +44 (0) 207 353 4200
James Macey White / Matt Low
Investec Bank plc (NOMAD & Tel: +44 (0) 207 597 5970
Broker)
Patrick Robb / Virginia Bull
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END
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