AGM Trading Update

RNS Number : 1972Z

Gamma Communications PLC

20 May 2021

 

20 May 2021

Gamma Communications plc

AGM trading update - Continuing to grow and generate cash

At the Annual General Meeting ("AGM") to be held later today at The Barn, Hobbs Hole Farm, Ledwell Road, Great Tew OX7 4DN, Richard Last, Chairman of Gamma Communications PLC ("Gamma" or the "Group") will read the following statement:-

Group overview

Gamma saw continued growth in the first quarter of the year, with that positive momentum expected to continue as each economy in which the Group operates is anticipated to recover following the pandemic. 

Highlights from 1 January 2021 to date include:

· In its core UK market, Gamma has successfully launched a number of key products (all of which have been well received by both Channel Partners and End Users) -

o  Phone Line + is a replacement service for customers who currently use a basic telephone line; it is a cloud based voice application which is easier to adopt than a full UCaaS solution.

o  Horizon Contact is our fully integrated Cloud Contact Centre as a Service ("CCaaS") solution.

o  An enhanced mobile service which deepens the existing relationship with Three and gives users access to 5G and Wifi calling.

o  Customers can now order SoGEA Broadband which allows them to receive broadband without having a traditional phone line.

· Development of new products continues well, and during Q3 our customers will be able to fully integrate their Horizon Cloud PBX with Microsoft Teams.

· In the Netherlands, we have launched video calling and conferencing alongside our existing voice product.

· Gamma's rate of bad debt remains at historically low levels across the group, despite the challenging economic conditions which are affecting our end users.

· Unit additions of key products are in line with historical levels.

· As reported, on 3 March 2021, the Group acquired Mission Labs Limited for £40.2m (on a cash free basis) with up to an additional £6.0m contingent deferred consideration payable over the next three years.  The acquisition of Mission Labs will enable Gamma to enhance and expand its cloud contact centre (CCaaS) technology.  In addition, the acquisition will enable Gamma to accelerate its digital channel strategy.  Mission Labs has a UCaaS technology platform called CircleLoop (www.circleloop.com).  Integration of the business is proceeding well and early performance is in line with expectations.

Balance Sheet

Our balance sheet remains strong and underlying trading continues to generate cash.  Gamma had £34m in cash at 30 April 2021 having paid approximately £40m in connection with the acquisition of Mission Labs.

Dividend

In our Annual Report we proposed the payment of a final dividend, in respect of the year ended 31 December 2020, of 7.8 pence per share (2019: 7.0 pence), being £7.3 million in cash terms.  When added to the 3.9 pence interim dividend (2019: 3.5 pence) this will equate to a total dividend declared of 11.7 pence for the year as a whole (2019: 10.5 pence).  The Board continues to recommend the payment of this dividend which will be proposed as a resolution at the AGM later this morning.

Capital Markets Day

The Group will host a Capital Markets Event at 1400 (BST) on Thursday 10 June.  This will give additional information about the new products discussed above.

For more information please email [e-mail].

Outlook

Based on our trading in the first quarter and the expectation that the UK will not enter into another lockdown period, we anticipate revenue, adjusted EBITDA and adjusted EPS for the year ended 31 December 2021 to be at the higher end of the range of market forecasts*.

The Board will provide its next trading update prior to the publication of the half year results.

* Note: Company compiled consensus is based on forecasts which have been updated to take into account Gamma's 2020 audited results.  The ranges are Revenue £442.4m - £461.3m; Adjusted EBITDA £86.0m - £94.0m; and Adjusted EPS 54.9p - 63.1p.

Gamma Communications plc Andrew Taylor, Chief Executive Officer Andrew Belshaw, Chief Financial Officer	Tel: [phone]
Tulchan Communications LLP James Macey White / Matt Low	Tel: [phone]
Investec Bank plc (NOMAD & Broker)	Tel: [phone]
Patrick Robb / Virginia Bull

 

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