Continued momentum in the execution of its growth strategy

 

iomart (AIM: IOM), the cloud computing company, is pleased to report its consolidated half yearly results for the six months ended 30 September 2023 (H1 2024).

• Revenue grew 18%, with strong levels of recurring revenues maintained (94%1 of Group revenues). The Concepta and Extrinsica acquisitions provided £6.0m of additional revenue in the period
• Cloud managed services revenue, the largest component of the Group, increased strongly, by 27% to £37.0m (H1 2023: £29.2m), from a combination of modest organic growth, price adjustments from last year’s energy cost increases, plus approximately £4.3m contribution from the latest two acquisitions
• Group EBITDA margin performance of 30.0% is a reduction from H1 2023 of 33.8% but it is slightly ahead of H2 2023 of 29.1%. This trend in margin performance reflects the change in revenue mix and specific timing of inflationary price adjustments during the last financial year
• Our energy hedging strategy is giving the Company and customers good cost certainty#
• £0.8m higher interest expense in the period, due to rise in bank interest rates, means adjusted profit before tax in the period of £7.6m showed a more modest 3% growth
• Cash conversion ratio6 of 90% is higher than the prior period (H1 2023: 81%) which had included the timing impact of some vendor payments overlapping period ends
• Net debt of £48.0m (31 March 2023: £39.8m), comfortable at 1.3 times annualised EBITDA5

OPERATIONAL HIGHLIGHTS

• Focus on sales and marketing resulted in improving order bookings and pipeline development
• Acquisitions of Concepta and Extrinsica have enhanced the Group’s routes to market and depth of skills, improving iomart’s overall customer proposition
• Acquisition of Accesspoint Technologies post period end, providing deep legal industry expertise and a highly capable team with a strong reputation
• Appointment of experienced CTO, providing increased focus on our technical platforms, product management, infrastructure and networks
• Move of head office to a modern city centre location in Glasgow, providing greater ability for the retention and attraction of talented team members
• Committed to solar panel installation on our Maidenhead data centre which will provide c.300kw peak power yield being around 15% of the total average site power use
• Two new independent non-executive Directors appointed to the Board, bringing relevant commercial and industry experience

OUTLOOK

• Ongoing sales channel and services initiatives combined with contributions from recent acquisitions will allow our full year results to demonstrate continued year on year momentum
• Current trading is in line with the Board’s expectations

STATUTORY EQUIVALENTS

A full reconciliation between adjusted and statutory profit before tax is contained within this statement. The largest item is the consistent add back of the non-cash amortisation of acquired intangible assets. The largest variance, period on period, is a £0.5m exceptional non-recurring charge recorded within administration costs related to the change in CEO during the month of September.

Lucy Dimes, CEO commented,

“I’m pleased to report on another period of progress at iomart. We continue to build on our existing strong foundations as a well-established and trusted service provider within the private cloud space, at the same time as extending our service offering across the wider and higher growth hybrid cloud market.

We see great opportunity ahead. For the UK to thrive as an economic powerhouse, its businesses will need to increase efficiency, operate at pace and adapt – leveraging cloud, data and digital technologies. Our blend of both IT and connectivity skills combined with our secure, scalable, resilient cloud and network infrastructure uniquely positions us to support the ambitions of our customer base, giving us confidence in our ability to participate successfully in the growing cloud sector.”

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