Final Results

RNS Number : 1647I

Iomart Group PLC

28 May 2014

iomart Group plc

("iomart" or the "Group" or the "Company")

Final Results for the Year ended 31 March 2014

iomart (AIM:IOM), the cloud computing company, is pleased to report its consolidated final results for the year ended 31 March 2014.

FINANCIAL HIGHLIGHTS

· Revenue growth of 29% to £55.6m (2013: £43.1m)

· Adjusted EBITDA¹ growth of 43% to £23.6m (2013: £16.5m)

· Adjusted profit before tax growth² of 37% to £14.6m (2013: £10.7m)

· Adjusted basic earnings per share³ from operations increased by 29% to 10.95p (2013: 8.46p)

· Cashflow from operations increased by 62% to £24.0m (2013: £14.8m)

· Adjusted EBITDA¹ margins increased to 42% (2013: 38%)

· Proposed final dividend increased by 25% to 1.75p per share (2013: 1.40p per share)

OPERATIONAL HIGHLIGHTS

· Increased European footprint and dedicated server expertise through the acquisition of Redstation Limited for a maximum consideration of £8.1m

· Acquired major presence in the Cloud backup and disaster recovery market through the acquisition of Backup Technology Holdings Limited for a total consideration of £23.0m

· Completion of fit out of around 600 racks of datacentre space in Maidenhead

Statutory Equivalents

The above highlights are based on adjusted results. A full reconciliation between adjusted and statutory results is contained within this statement. The statutory equivalents of the above results are as follows:

· Profit before tax growth of 12% to £9.7m (2013: £8.7m)

· Basic earnings per share from operations increased by 6% to 7.30p (2013: 6.91p)

¹Throughout this statement adjusted EBITDA is earnings before interest, tax, depreciation and amortisation (EBITDA) before share based payment charges and acquisition costs. Throughout this statement acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.

²Throughout this statement adjusted profit before tax is profit before tax, amortisation charges on acquired intangible assets, shared based payment charges, mark to mark adjustments in respect of interest rate swaps, the accelerated write off of arrangement fees on the bank borrowing facilities which were repaid early during the year and acquisition costs.

³Throughout this statement adjusted basic earnings per share is earnings per share before amortisation charges on acquired intangible assets, shared based payment charges, mark to mark adjustments in respect of interest rate swaps, the accelerated write off of arrangement fees on the bank borrowing facilities which were repaid early during the year and acquisition costs, including the taxation effect of these.

Angus MacSween, CEO commented,

"We continue to be well placed to deliver an ever wider range of cloud services to our increasing customer base. With our growing reputation and ongoing investment in leading edge technologies alongside our own development skills, we are well positioned for further significant growth. I look forward, once again, with confidence to the year ahead."

For further information:

iomart Group plc	Tel: 0141 931 6400
Angus MacSween
Richard Logan

Peel Hunt LLP (Nominated Adviser and Broker)	Tel: 020 7418 8900
Richard Kauffer Daniel Harris

Newgate Threadneedle	Tel: 020 7653 9850
Caroline Forde
Hilary Millar

About iomart Group plc

iomart Group plc (AIM:IOM) is one of the UK's leading providers of cloud computing and managed hosting services. From a single server through to private cloud networks, iomart specialises in the delivery and management of mission-critical hosting services, enabling customers to reduce the costs, complexity and risks associated with maintaining their own web and online applications.

By physically owning and managing its own network infrastructure, including eight data centre locations across the UK, iomart offers world-beating levels of service to its customers. The Group offers a unique 100% uptime guarantee with all hosting services being engineered to ensure no single point of failure.

Services offered include: Managed Hosting, Cloud Computing (Infrastructure as a Service), Colocation, Complex Hosting solutions, Content Delivery Networks, IP Transit and Data Centre Services.

For further information about the Group, please visit www.iomart.com

CHAIRMAN'S STATEMENT

I am delighted to report on another very good year for your Group. We continue to make excellent progress as we execute on our combined strategy of both growing our own business and acquiring others and our reputation as one of the UK's leading cloud computing companies continues to develop.

We have again enjoyed a substantial increase in profitability over the year, driven both by organic and acquisitive growth. Over the last five years we have made eleven acquisitions in total and two of those we made this year, Redstation and Backup Technology are the largest to date. All are performing as expected and have been integrated into iomart's operations. As a result of these acquisitions we increased our datacentre estate with the addition of a datacentre in Portsmouth and we now have datacentres in eight locations throughout the UK to support the delivery of our cloud solutions. We appreciate the continued support shown by the Bank of Scotland through the provision of additional loan facilities to help fund our acquisition activity.

All of this progress is a result of a great deal of hard work by our executives and staff and I thank them all on behalf of the Board and the shareholders for their efforts over the year.

We have a commitment to a progressive dividend policy as our profitability and cash generation grows. This year the Board is proposing to pay a final dividend of 1.75p per share on 2 September 2014 to shareholders on the register on 15 August 2014, representing an increase of 25% over the dividend last year. We have decided that we will continue to offer shareholders the option to participate in a Dividend Reinvestment Plan (DRIP) as an alternative to receiving cash. Details of the DRIP scheme will be distributed with the annual accounts in due course.

With the high level of revenue visibility we enjoy, we have begun the 2015 financial year in a strong position. I look forward to another exciting year of growth and look ahead with considerable confidence.

Ian Ritchie

Chairman

27 May 2014

CHIEF EXECUTIVE'S REVIEW

Introduction

I am pleased once more to report on another excellent year for iomart. We have increased our revenues and profits both organically and through acquisition as we continue to deliver a widening range of cloud computing solutions.

Our revenues in the year were £55.6m, an increase of 29% over the previous year and our adjusted EBITDA of £23.6m showed a 43% increase over the previous year.

We continue to believe in the long term opportunity for iomart as IT spending moves towards the 'cloud', as networks and connectivity expand and mobility increases. Our vision remains to be the best in the UK at the delivery of compute, storage and network in the cloud in a seamless, efficient and scalable way.

Market

The market continues to grow and evolve. All the trends I have spoken about in recent years remain intact.

One is the increasingly mobile world which we inhabit. Many of us have multiple devices that need to connect to data residing in datacentres, the totality of which effectively define the 'cloud'.

The second is the growth in faster and more reliable connectivity, making it easier to access and operate in the cloud.

The third is the inevitable growth in the volume of data being created which needs to be stored and managed securely.

These three overarching trends are interlinked, driving each other forward, and are set to continue for many years to come.

The core of our strategy is to offer all three main layers of cloud, ie network, compute and storage from resilient secure infrastructure through a range of ever more sophisticated control panels.

As business cycles in the cloud arena become more apparent and as we learn more about long term customer behaviour we will continue to develop our products to ensure we offer what the customer wants at the right price, on demand and in line with their growing and changing needs. This requires us to be at the leading edge of cloud technologies.

The tools and technologies used to deliver these services are constantly evolving and we continue to invest to ensure we are at the forefront of this evolution. It is important that as we grow bigger we continue to invest in the automation required to ensure we can continue to scale the business in a well thought through and planned way. There is a lot of ongoing development in network technology, in the compute and virtualisation layer and in the storage layer as the big technology vendors evolve their own solutions for a future in the cloud. We have strong and growing relationships with all our technology partners and we work hard to ensure we are aware of, and are following, all the relevant technology roadmaps.

There are many IT companies who now sell 'cloud' services. This is more of an opportunity than a threat as we see a future where specialist service providers will provide wholesale cloud products to the market. iomart is well positioned to be a leading provider of such products.

To date it has mainly been the web-facing elements of infrastructure that have been outsourced to the cloud and the back-office workload continues to be handled "on premise". Most of this back-office infrastructure is bought in the same way as it was 15 years ago. We believe this will change and we can already see the early adopters starting to move to the cloud. This reinforces the 'dripping roast' nature of the market opportunity and as I have been saying for the last five years, it has a long, long way to go.

iomart is at the forefront of this transformational shift and I expect the cloud opportunity to continue for many years to come.

Acquisitions

We again augmented our organic growth through the acquisition of three operations during the year. In September 2013 we acquired Redstation Limited ("Redstation"), Backup Technology Holdings Limited ("BTL") and Open Minded Solutions Limited ("Open Minded"). All three have proven to be good additions to the Group and have now been integrated into the business. We continue to look for businesses that fit our acquisition criteria with a view to making further acquisitions in the coming year.

Operational Review

Whilst all of our activities involve the provision of services from common infrastructure we are organised into two operating segments.

Hosting

Our Hosting segment, which now includes Redstation and BTL, continued to perform well over the year.

We provide a wide range of managed hosting services to both SMEs and corporate customers. All our solutions are delivered from our network of datacentres located throughout the UK. The more complex managed hosting solutions are delivered by iomart Hosting and customers typically pay for these services on a monthly basis on contracts ranging between one and three years in length. We address the dedicated physical server market through our RapidSwitch and Redstation operations largely through online marketing. Melbourne delivers complex managed hosting solutions and provides us with a strong presence in the North West of England with a particular emphasis on the creative sector. BTL provides enterprise class cloud backup and business continuity services.

We have made a substantial investment in our Maidenhead datacentre which has increased our overall capacity substantially and in addition we acquired additional datacentre space in Portsmouth as a consequence of the acquisition of Redstation.

Further investment has been made in our network to make use of the dark fibre we put in place last year with our Manchester operation now fully connected and we expect to integrate our Portsmouth facility into our network over the course of the current financial year.

Revenues in this segment have grown by 40% to £44.7m (2013: £32.0m) partly as a result of the continued organic growth and in part due to acquisitions.

Easyspace

The Easyspace segment, which now includes Open Minded, has performed well over the year.

Our activities within this segment provide a range of products to the micro and SME markets including domain names, shared, dedicated and virtual servers and email services.

There has been a significant change to the domain name market which began late in the year. There are now substantially more domain suffixes available and more continue to be added on a daily basis. We expect Easyspace to benefit from this new market opportunity.

As anticipated revenues of £11.0m (2013: £11.1m) have remained around the same level as in the previous year, delivering strong levels of cash for the Group.

Trading Results

Revenue

Revenues for the year grew by 29% to £55.6m (2013: £43.1m) through the combination of continued organic growth and the impact of acquisitions.

Our Hosting segment grew revenues by 40% to £44.7m (2013: £32.0m). This growth was helped by a full year contribution from Melbourne which we acquired in August 2012 and Redstation and Backup Technology both of which were acquired in September 2013. The growth in the Hosting segment revenues excluding the impact of acquisitions was 14%.

Revenues within the Easyspace segment of £11.0m (2013: £11.1m) were close to the level of the previous year showing a very modest 1% decrease.

We continue to have good revenue visibility and high levels of recurring revenue. With our larger customers we have multi-year contracts for the provision of complex managed hosting solutions. Many of our smaller customers pay in advance for the provision of hosting services resulting in a substantial sum of deferred revenue which we then recognise during the period over which we provide our services.

Gross Margin

Our gross profit for the year was £37.8m (2013: £28.9m) representing a gross margin of 68.0% (2013: 67.2%) with both operating segments contributing to this improvement in both absolute and relative terms. The improvement in our Hosting segment is a result of the operational leverage of the operation together with the impact of acquisitions. In our Easyspace segment it has been as a result of the impact of acquisitions.

Adjusted EBITDA

The adjusted EBITDA for the year was £23.6m (2013: £16.5m) an increase of 43%. Our percentage adjusted EBITDA margin has also significantly improved to 42.5% (2013: 38.3%). The Hosting segment increased both its absolute and relative margin over the period whilst the Easyspace segment performed very much in line with the previous year.

The Hosting segment's adjusted EBITDA was £21.7m (2013: £14.3m), an increase of 51.9%. In percentage terms the adjusted EBITDA margin has improved to 48.6% (2013: 44.7%). This greatly improved performance is a direct result of the additional gross margin delivered by the increase in sales revenue from the Hosting segment offset by an increase in administrative expenses. Administrative expenses have increased principally due to the impact of the acquisitions made in the period and the full impact of the acquisitions made in the previous period. The inclusion of Melbourne for the full year has contributed to the improvement in the adjusted EBITDA in absolute terms and has helped maintain the percentage margin improvement. Similarly the contribution from both Redstation and BTL since their acquisition in September has contributed to both the absolute and relative improvement in the margin.

The Easyspace segment's adjusted EBITDA was £5.0m (2013: £5.0m) which was the same as in the previous year. In percentage terms the adjusted EBITDA margin has improved slightly to 45.2% (2013: 44.9%). The improvement in adjusted EBITDA is primarily due to the impact of the synergies achieved through the integration of the acquisitions made in both this and the previous financial years.

Group overheads, which are not allocated to segments, include the cost of the Board, the running costs of the headquarters in Glasgow, Group marketing, human resource, finance and design functions and legal and professional fees for the year. These overhead costs have increased to £3.0m (2013: £2.8m) mainly due to increased payroll costs.

Adjusted profit before tax

Depreciation charges of £7.2m (2013: £4.9m) have increased largely as a consequence of the acquisitions made in the year and also as a result of charges for the equipment bought to provide services to the additional Hosting segment customers.

The charge for amortisation of intangibles, excluding amortisation of intangible assets resulting from acquisitions ("amortisation of acquired intangible assets") of £0.7m (2013: £0.5m) has remained fairly static over the year.

Finance income in the period was £0.1m (2013: £0.1m). Finance costs of £1.2m (2013: £0.5m), excluding the mark to market adjustment in respect of interest swaps on the Company's loans and the accelerated write off of arrangement fees on the early repayment of bank facilities, increased substantially over the period. This was largely due to the new bank facilities which have been drawn down to fund the acquisitions made in the year.

After deducting the charges for depreciation, amortisation, excluding the charges for the amortisation of acquired intangible assets, and finance costs, excluding mark to market adjustments on the interest rate swap and the accelerated write off of arrangement fees on the early repayment of the bank facilities, and crediting the finance income from the adjusted EBITDA, the Group's adjusted profit before tax was £14.6m (2013: £10.7m) an increase of 37%.

Profit before tax

The measure of adjusted profit before tax is a non-statutory measure which is commonly used to analyse the performance of companies particularly where M&A activity forms a significant part of their activities.

A reconciliation of adjusted profit before tax to reported profit before tax is shown below:

Reconciliation of adjusted profit before tax to profit before tax	2014 £'000	2013 £'000
Adjusted profit before tax	14,612	10,668
Less: Amortisation of acquired intangible assets	(3,093)	(1,302)
Less: Acquisition costs	(374)	(364)
Less: Share based payments	(1,257)	(258)
Less: Mark to market adjustment on interest rate swaps	(20)	(46)
Less: Accelerated write off of arrangement fees on early repayment of bank facilities	(153)	-
Profit before tax	9,715	8,698

The adjusting items are: charges for the amortisation of acquired intangible assets of £3.1m (2013: £1.3m) which have increased substantially as a result of the acquisitions made in the year and the full year effect of acquisitions made in previous years; costs of £0.4m (2013: £0.4m) as a result of acquisition costs; share based payment charges in the period of £1.3m (2013: £0.3m) which have increased substantially as a result of additional share options granted; a mark to market adjustment in respect of interest rate swaps on the Company's loans of £0.02m (2013: £0.05m) and the accelerated write off of arrangement fees on the early repayment of bank facilities during the year of £0.15m (2013: £nil).

After deducting charges for the amortisation of acquired intangible assets; acquisition costs; share based payments; mark to market adjustments in respect of interest rate swaps and the accelerated write off of arrangement fees on the early repayment of bank facilities during the year from the adjusted profit before tax; the reported profit before tax was £9.7m (2013: £8.7m) an increase of 12%.

Taxation

There is a tax charge for the year of £2.0m (2013: £1.7m). The tax charge for the year is made up of a corporation tax charge of £2.5m (2013: £1.5m) with a deferred tax credit of £0.5m (2013: charge £0.2m). At the year end, the Group has unused tax losses of £4.0m (2013: £5.1m) available for offset against future profits, which have been provided for in full within deferred tax.

Profit for the year from total operations

After deducting the tax charge for the year from the profit before tax the Group has recorded a profit for the year from total operations of £7.7m (2013: £6.9m).

Earnings per share

Adjusted earnings per share is based on profit for the year attributed to ordinary shareholders before share based payment charges, amortisation charges of acquired intangible assets, mark to market adjustments in respect of interest rate swaps, the accelerated write off of arrangement fees on the early repayment of bank facilities during the year, acquisition costs and the tax effect of these items was 10.95p (2013: 8.46p) an increase of 29%.

The measure of adjusted earnings per share as described above is a non-statutory measure which is commonly used to analyse the performance of companies particularly where M&A activity forms a significant part of their activities.

The calculation of both adjusted earnings per share and basic earnings per share is included at note 6.

Basic earnings per share from continuing operations was 7.30p (2013: 6.91p), an increase of 6% over the year.

Acquisitions

On 4 September 2013 the Company acquired Redstation for a maximum consideration of £8.1m; on a no cash no debt, normalised working capital basis. An initial payment of £2.0m in cash and £1.5m in shares was made to the vendors and debt of £3.1m was also repaid. A further sum of £0.2m was paid in cash in December 2013 to reflect the additional debt assumed, cash acquired and normalised working capital position of the company at completion. An additional sum is due related to the profitability of Redstation in the period to March 2014 and the estimated amount to be paid in this regard is £1.2m. Payment of this sum is expected to be made during June 2014.

On 30 September 2013 the Company acquired BTL for a total consideration of £23.0m; on a no cash no debt, normalised working capital basis. At completion, there was a payment made of £14.9m in cash, plus another £1.1m in cash to reflect the additional debt assumed, cash acquired and normalised working capital position of the company at completion, thereby totalling a payment of £16.0m in cash and £3.5m in shares to the vendors. There was also a repayment of debt of £2.6m. A further deferred sum of £2.0m was paid in January 2014.

On 9 September 2013 the Company acquired the entire share capital of Open Minded for a total consideration of £0.1m. Open Minded is a customer of Rapidswitch.

Cash flow and net cash

Net cash flows from operating activities

The Group continued to generate high levels of operating cash over the year. Cash flow from operations was £24.0m (2013: £14.8m) with the significant increase of 62% over the previous year's level largely due to the improvement in adjusted EBITDA. After deducting payments for corporation tax of £2.3m (2013: £1.2m) the net cash flow from operating activities was £21.7m (2013: £13.6m).

Cash flow from investing activities

In line with our strategy of accelerating our growth by acquisition the Group continued to incur substantial sums on investing activities, spending a total of £31.5m (2013: £13.6m) in the period. Of this amount, £19.0m (2013: £8.8m), net of cash acquired on acquisition of £1.4m and shares issued of £5.0m, was incurred in relation to acquisition activities described above. As well as the investment in the year to acquire Redstation, BTL and Open Minded the Group also paid contingent and deferred considerations due on the acquisitions of Internet Engineering and Skymarket respectively in the previous financial year.

The Group continues to invest in property, plant and equipment through expenditure on datacentres and on equipment required to provide managed services to both its existing and new customers. In particular the Group significantly expanded its datacentre in Maidenhead and as a result the Group spent £11.7m (2013: £4.1m) on assets, net of related finance lease drawdown and non-cash reinstatement provisions.

Expenditure was also incurred on development costs of £0.6m (2013: £0.5m).

Cash flow from financing activities

There was net cash generated from financing activities of £11.4m (2013: £2.5m). The Company's borrowing facilities were restructured in the period. Bank loans of £37.5m were drawn down (2013: £9.0m) out of which existing facilities of £14.0m (2013: £4.0m) were repaid, including £5.0m which had been drawn down in the period to help finance the acquisition of Redstation, and the balance of £18.5m was used to help finance the acquisition of BTL (2013: £5.0m used to finance the acquisition of Melbourne). Subsequently, a further loan repayment of £2.5m was made in March 2014. £5.7m of borrowings in acquired businesses were repaid (2013: £0.2m) of which £3.1m related to the acquisition of Redstation and £2.6m to the acquisition of BTL and £1.4m (2013: £1.4m) of finance leases were also repaid. We received £0.2m (2013: £0.6m) from the issue of shares as a result of the exercise of options by employees. We also made a dividend payment of £1.5m (2013: £0.9m) and incurred finance costs of £1.2m (2013: £0.6m).

Net cash flow

As a consequence, our overall cash generation during the year was £1.6m (2013: £2.5m) which resulted in cash and cash equivalent balances at the end of the year of £13.0m (2013: £11.4m). After recognising bank loans of £30.0m (2013: £8.8m) and finance lease obligations of £2.8m (2013: £3.0m) net debt balances at the end of the period stood at £19.8m (2013: £0.4m) a level the Board is comfortable with given the strong cash generation of the Group.

Financial position

The Group is now in a position where it is generating substantial amounts of operating cash. The generation of that cash flow together with the committed bank loan facility for acquisitions and finance lease facilities which are available to fund capital expenditure, means that the Group has the liquidity it requires to continue its growth through both organic and acquisitive means.

Current trading and outlook

Trading since the year end remains encouraging and in line with our expectations.

We continue to be well placed to deliver an ever wider range of cloud services to our increasing customer base. With our growing reputation and ongoing investment in leading edge technologies, alongside our own development skills, we are well positioned for further significant growth.

I look forward, once again, with confidence to the year ahead.

Angus MacSween

Chief Executive Officer

27 May 2014

Consolidated Statement of Comprehensive Income

Year ended 31 March 2014

	Note	2014 £'000	2013 £'000
Revenue		55,618	43,059

Cost of sales		(17,794)	(14,131)

Gross profit		37,824	28,928

Administrative expenses		(26,767)	(19,768)

Operating profit		11,057	9,160

Analysed as:
Earnings before interest, tax, depreciation, amortisation, acquisition costs and share based payments		23,611	16,505
Share based payments		(1,257)	(258)
Acquisition costs		(374)	(364)
Depreciation		(7,170)	(4,909)
Amortisation - acquired intangible assets		(3,093)	(1,302)
Amortisation - other intangible assets		(660)	(512)

Finance income		68	87
Finance costs		(1,410)	(549)

Profit before taxation		9,715	8,698

Taxation	4	(1,995)	(1,749)

Profit for the year from total operations		7,720	6,949


Other comprehensive income

Amounts which may be reclassified to profit or loss
Currency translation differences		3	9
Other comprehensive income for the year		3	9

Total comprehensive income for the year		7,723	6,958


Attributable to equity holders of the parent		7,723	6,958



Basic and diluted earnings per share

Total operations
Basic earnings per share	6	7.30 p	6.91 p
Diluted earnings per share	6	7.23 p	6.63 p

Consolidated Statement of Financial Position

As at 31 March 2014

		2014	2013
	Note	£'000	£'000
ASSETS
Non-current assets
Intangible assets - goodwill	8	44,879	31,781
Intangible assets - other	8	19,488	8,028
Lease deposits		2,416	2,416
Property, plant and equipment	9	32,533	19,884
		99,316	62,109
Current assets
Cash and cash equivalents		13,025	11,392
Trade and other receivables		7,696	5,761
		20,721	17,153

Total assets		120,037	79,262

LIABILITIES
Non-current liabilities
Non-current borrowings	10	(13,716)	(5,696)
Provisions		(1,566)	(1,097)
Deferred tax	5	(2,443)	(468)
		(17,725)	(7,261)
Current liabilities
Contingent consideration due on acquisitions	12	(1,271)	(358)
Trade and other payables		(15,158)	(12,491)
Current income tax liabilities		(1,868)	(812)
Current borrowings	10	(19,128)	(6,124)
		(37,425)	(19,785)

Total liabilities		(55,150)	(27,046)

Net assets		64,887	52,216

EQUITY
Share capital		1,078	1,058
Own shares		(556)	(576)
Capital redemption reserve		1,200	1,200
Share premium		21,067	20,936
Merger reserve		4,983	-
Foreign currency translation reserve		2	(1)
Retained earnings		37,113	29,599
Total equity		64,887	52,216

Consolidated Statement of Cash Flows

Year ended 31 March 2014

	Note	2014 £'000	2013 £'000

Profit before taxation		9,715	8,698
Finance costs - net		1,342	462
Depreciation	9	7,170	4,909
Amortisation	8	3,753	1,814
Share based payments		1,257	258
Exchange movements		-	9
Movement in trade receivables		250	(810)
Movement in trade payables		503	(550)
Cash flow from operations		23,990	14,790
Taxation paid		(2,277)	(1,200)
Net cash flow from operating activities		21,713	13,590

Cash flow from investing activities
Purchase of property, plant and equipment	9	(11,651)	(4,093)
Capitalisation of development costs		(557)	(526)
Purchase of intangible assets - software		(24)	(20)
Proceeds on disposal of property, plant and equipment		22	-
Payments for current period acquisitions net of cash acquired		(19,016)	(8,796)
Contingent consideration paid on prior period acquisition		(125)	(246)
Deferred consideration paid on prior period acquisition		(201)	-
Finance income received		91	68
Net cash used in investing activities		(31,461)	(13,613)

Cash flow from financing activities
Issue of shares		154	584
Draw down of bank loans		37,500	9,000
Repayment of finance leases		(1,384)	(1,427)
Repayment of bank loans		(16,503)	(4,000)
Repayment of borrowings on acquisition of business		(5,731)	(152)
Finance costs paid		(1,172)	(621)
Dividends paid		(1,483)	(904)
Net cash received from financing activities		11,381	2,480

Net increase in cash and cash equivalents		1,633	2,457

Cash and cash equivalents at the beginning of the year		11,392	8,935

Cash and cash equivalents at the end of the year		13,025	11,392

Consolidated Statement of Changes in Equity

Year ended 31 March 2014

Changes in equity	Share capital	Own shares JSOP	Own shares EBT	Own shares Treasury	Foreign currency translation reserve	Capital redemption reserve	Share premium account	Merger reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Balance at 1 April 2012	1,048	(2,351)	-	-	(10)	1,200	20,362	-	24,814	45,063

Profit in the year	-	-	-	-	-	-	-	-	6,949	6,949
Currency translation differences	-	-	-	-	9	-	-	-	-	9
Total comprehensive income	-	-	-	-	9	-	-	-	6,949	6,958

Dividends - final (paid)	-	-	-	-	-	-	-	-	(904)	(904)
Share based payments	-	-	-	-	-	-	-	-	258	258
Deferred tax on share based payments	-	-	-	-	-	-	-	-	257	257
Issue of own shares from JSOP	-	2,351	(70)	(506)	-	-	-	-	(1,775)	-
Issue of new shares for option redemption	10	-	-	-	-	-	574	-	-	584
Total transactions with owners	10	2,351	(70)	(506)	-	-	574	-	(2,164)	195

Balance at 31 March 2013	1,058	-	(70)	(506)	(1)	1,200	20,936	-	29,599	52,216


Profit in the year	-	-	-	-	-	-	-	-	7,720	7,720
Currency translation differences	-	-	-	-	3	-	-	-	-	3
Total comprehensive income	-	-	-	-	3	-	-	-	7,720	7,723

Dividends - final (paid)	-	-	-	-	-	-	-	-	(1,483)	(1,483)
Share based payments	-	-	-	-	-	-	-	-	1,257	1,257
Deferred tax on share based payments	-	-	-	-	-	-	-	-	19	19
Issue of own shares for option redemption	-	-	-	20	-	-	-	-	1	21
Issue of new shares for option redemption	3	-	-	-	-	-	131	-	-	134
Issue of new shares for business acquisition	17	-	-	-	-	-	-	4,983	-	5,000
Total transactions with owners	20	-	-	20	-	-	131	4,983	(206)	4,948


Balance at 31 March 2014	1,078	-	(70)	(486)	2	1,200	21,067	4,983	37,113	64,887

Notes to the Yearly Financial Information

Year ended 31 March 2014

1. GENERAL INFORMATION

iomart Group plc is a company incorporated and domiciled in Scotland. The company has a primary listing on the AIM stock exchange. The address of its registered office is Lister Pavilion, Kelvin Campus, West of Scotland Science Park, Glasgow G20 0SP.

2. BASIS OF PREPARATION

These final statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention.

The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 March 2014 and 31 March 2013 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2013 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The financial information for the year ended 31 March 2014 is derived from the statutory accounts for that year which were approved by the Directors on 27 May 2014. The statutory accounts for the year ended 31 March 2014 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

3. SEGMENTAL ANALYSIS

The chief operating decision-maker has been identified as the Chief Executive Officer ("CEO") of the Company. The Group has two operating segments and the CEO reviews the Group's internal reporting which recognises these two segments in order to assess performance and to allocate resources. The Group has determined its reportable segments which are also its operating segments based on these reports.

The Group currently has two operating and reportable segments.

· Easyspace - this segment provides a range of shared hosting and domain registration services to micro and SME companies. Open Minded was acquired during the year and has been reported as part of the Easyspace segment since acquisition.

· Hosting - this segment provides managed hosting facilities and services, through a network of owned datacentres, to the larger SME and corporate markets. The segment uses several routes to market and provides managed hosting services through iomart Hosting, RapidSwitch, Titan Internet, EQSN and iomart Cloud Services. Redstation and BTL were acquired during the year and have been reported as part of the Hosting segment since acquisition.

Information regarding the operation of the reportable segments is included below. The CEO assesses the performance of the operating segments based on revenue and a measure of Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) before any allocation of Group overheads, charges for share based payments or costs associated with acquisitions. This segment EBITDA is used to measure performance as the CEO believes that such information is the most relevant in evaluating the results of the segment.

The Group's EBITDA for the year has been calculated after deducting Group overheads from the EBITDA of the two segments as reported internally. Group overheads include the cost of the Board, all the costs of running the premises in Glasgow, the Group marketing, human resource, finance and design functions and legal and professional fees.

The segment information is prepared using accounting policies consistent with those of the Group as a whole.

The assets and liabilities of the Group are not reviewed by the chief operating decision-maker on a segment basis. Therefore none of the Group's assets and liabilities are segmental assets and liabilities and are all unallocated for segmental disclosure purposes. For that reason the Group has not disclosed details of segmental assets and liabilities.

All segments are continuing operations. No customer accounts for more than 10% of external revenues. Inter-segment transactions are accounted for using an arms-length commercial basis.

Operating Segments

Revenue by Operating Segment

	2014			2013
	External	Internal	Total	External	Internal	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Easyspace	10,959	-	10,959	11,081	-	11,081
Hosting	44,659	932	45,591	31,978	1,052	33,030
	55,618	932	56,550	43,059	1,052	44,111

Geographical Information

In presenting the consolidated information on a geographical basis, revenue is based on the geographical location of customers. The United Kingdom is the place of domicile of the parent company, iomart Group plc. All of the Group's revenue originates from the United Kingdom.

Analysis of Revenue by Destination

	2014	2013
	£'000	£'000
United Kingdom	48,005	39,190
Rest of the World	7,613	3,869
Revenue from operations	55,618	43,059

Profit by Operating Segment

	2014			2013
	EBITDA before acquisition costs and share based payments	Depreciation, amortisation, acquisition costs and share based payments	Operating profit/(loss)	EBITDA before acquisition costs and share based payments	Depreciation, amortisation, acquisition costs and share based payments	Operating profit/(loss)
	£'000	£'000	£'000	£'000	£'000	£'000
Easyspace	4,953	(605)	4,348	4,973	(550)	4,423
Hosting	21,700	(10,318)	11,382	14,289	(6,173)	8,116
Group overheads	(3,042)	-	(3,042)	(2,757)	-	(2,757)
Acquisition costs	-	(374)	(374)	-	(364)	(364)
Share based payments	-	(1,257)	(1,257)	-	(258)	(258)
Profit before tax and interest	23,611	(12,554)	11,057	16,505	(7,345)	9,160
Group interest and tax			(3,337)			(2,211)
Profit for the year	23,611	(12,554)	7,720	16,505	(7,345)	6,949

Group overheads, acquisition costs, share based payments, interest and tax are not allocated to segments.

4. TAXATION

	2014 £'000	2013 £'000

Tax charge for the year	(3,002)	(1,423)
Adjustment relating to prior years	480	(121)
Total current taxation charge	(2,522)	(1,544)

Origination and reversal of temporary differences	486	(311)
Effect of changes in tax rates	41	106
Total deferred taxation credit/(charge)	527	(205)

Total taxation charge	(1,995)	(1,749)

The Group has a deferred tax asset which has been recognised in respect of tax losses within one subsidiary company, which has generated taxable profits and is expected to continue to do so.

The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:

	2014 £'000	2013 £'000

Profit before tax	9,715	8,698

Tax charge @ 23% (2013 - 24%)	2,234	2,088

Expenses disallowed for tax purposes	263	146
Non-taxable income	-	(18)
Adjustments in respect of prior years	(480)	121
Movement in deferred tax relating to changes in tax rates	(41)	(106)
Effect of research and development tax reliefs	(350)	(186)
Tax effect of share based remuneration	142	(299)
Movement in unprovided deferred tax related to fixed assets	103	7
Movement in deferred tax relating to prior periods	124	-
Increase in tax losses utilised and recognised	-	(4)

Taxation charge for the year	1,995	1,749

5. DEFERRED TAX

The Group recognised deferred tax assets and liabilities as follows:

	2014		2013
	Deferred tax Recognised £'000	Deferred tax Unrecognised £'000	Deferred tax Recognised £'000	Deferred tax Unrecognised £'000

Tax losses carried forward	831	-	1,167	-
Share based remuneration	600	-	681	-
Capital allowances timing differences	414	-	282	-
Deferred tax on acquired assets with no capital allowances	(765)	-	(949)	-
Deferred tax on customer relationships	(3,523)	-	(1,649)	-
Deferred tax liability	(2,443)	-	(468)	-

At the year end, the Group has unused tax losses of £4.0m (2013: £5.1m) available for offset against future profits. A deferred tax asset has been recognised in respect of £4.0m (2013: £5.1m) of such losses as these losses are expected to be used up by taxable profits by the end of the period covered by future projections.

The movement in the deferred tax account during the year was:

	Tax losses carried forward £'000	Share based remuneration £'000	Capital allowances timing differences £'000	Deferred tax on acquired assets with no capital allowances £'000	Customer relationships £'000	Total £'000

Balance at 1 April 2013	1,167	681	282	(949)	(1,649)	(468)
Acquired on acquisition of subsidiary	-	-	215	-	(2,736)	(2,521)
Credited to equity	-	19	-	-	-	19
(Charged)/credited to statement of comprehensive income	(222)	(41)	(64)	104	709	486
Effect of changes in tax rates	(114)	(59)	(19)	80	153	41
Balance at 31 March 2014	831	600	414	(765)	(3,523)	(2,443)

6. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, after deducting any own shares held by an Employee Benefit Trust in a Joint Share Ownership Plan ("JSOP"). Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the total of the weighted average number of ordinary shares in issue during the year, after deducting any own shares (JSOP), and adjusting for the dilutive potential ordinary shares relating to share options, including the dilutive effect of JSOP shares that have vested.

Total operations	2014 £'000	2013 £'000
Profit for the financial year and basic earnings attributed to ordinary shareholders	7,720	6,949

	No	No
Weighted average number of ordinary shares:	000	000

Called up, allotted and fully paid at start of year	105,760	104,817
Own shares held in Treasury	(1,016)	(11)
Shares held by Employee Benefit Trust	(141)	(4,687)
New shares issued during year	1,101	468
Weighted average number of ordinary shares - basic	105,704	100,587

Dilutive impact of share options	1,005	1,018
Dilutive impact of JSOP shares	-	3,200
Weighted average number of ordinary shares - diluted	106,709	104,805

Basic earnings per share	7.30 p	6.91 p
Diluted earnings per share	7.23 p	6.63 p

Adjusted earnings per share	2014 £'000	2013 £'000

Profit for the financial year and basic earnings attributed to ordinary shareholders	7,720	6,949
- Amortisation of acquired intangible assets	3,093	1,302
- Acquisition costs	374	364
- Shared based payments	1,257	258
- Mark to market interest adjustment	20	46
- Accelerated write off of arrangement fees	153	-
- Tax impact of adjusted items	(1,039)	(409)
Adjusted profit for the financial year and adjusted earnings attributed to ordinary shareholders	11,578	8,510

Adjusted basic earnings per share	10.95 p	8.46 p
Adjusted diluted earnings per share	10.85 p	8.12 p

7. ACQUISITIONS

Redstation Limited

The Group acquired 100% of the issued share capital of Redstation Limited ("Redstation") on 4 September 2013.

Redstation is a Portsmouth based provider of dedicated servers to over 3,000 customers. Redstation owns and operates its own datacentres in Portsmouth, providing the Group with additional datacentre capacity. As well as the addition of datacentre facilities, this acquisition fills a geographical gap in the markets currently addressed by the Group. The acquisition is in line with the Group's strategy to grow its hosting operations both organically and by acquisition.

During the current period the Group incurred £126,000 of third party acquisition related costs in respect of this acquisition. These expenses are included in administrative expenses in the Group's consolidated statement of comprehensive income for the period ended 31 March 2014.

The following table summarises the consideration to acquire Redstation and the amounts of identified assets acquired and liabilities assumed at the acquisition date:

	£'000
Recognised amounts of net assets acquired and liabilities assumed:
Cash and cash equivalents	456
Trade and other receivables	584
Property, plant and equipment	4,970
Intangible assets	2,896
Trade and other payables	(1,275)
Current income tax liabilities	(283)
Current borrowings	(83)
Non-current borrowings	(3,257)
Deferred tax liability	(292)
Identifiable net assets	3,716
Goodwill	1,184
Total consideration	4,900

Satisfied by:
Cash - paid on acquisition	1,958
Shares issued	1,500
Contingent consideration - payable	1,200
Deferred consideration - paid	242
Total consideration transferred	4,900

The recognised amounts of all the net assets acquired and liabilities assumed are final.

An amount of £242,000 was due to the vendors in respect of the additional debt assumed, cash acquired and normalised working capital position of Redstation at completion and this amount was paid in December 2013.

The contingent consideration arrangement requires the Company to pay the former shareholders of Redstation an additional amount contingent on the level of profitability delivered by Redstation in the period to 31 March 2014. The potential undiscounted amount of the payment that the company could be required to make is between £nil and £1,500,000. The amount of contingent consideration payable which was recognised as of the acquisition date was £1,200,000. The fair value of the contingent consideration arrangement of £1,200,000 was estimated by applying the income approach to different scenarios based on historic performance and forecasts which had a range of outcomes of £1,040,000 to £1,297,000. A weighted average based on management estimates of the probability of the achievement of various levels of profitability was then calculated to give the fair value. The level of profitability of Redstation in the period ended 31 March 2014 has been determined since the year end and the revised estimation of the amount payable in respect of the contingent consideration arrangement is £1,239,000. The additional payment due of £39,000 is included in administrative expenses in the Group's consolidated statement of comprehensive income for the year ended 31 March 2014. Payment of the contingent consideration is expected to be made during June 2014.

The total consideration transferred to the vendors of £4,900,000 together with the debt repaid at completion of £3,162,000 and the additional £39,000 of contingent consideration resulted in an estimated total cost of acquisition of £8,101,000 including an amount of £242,000 in respect of the cash, additional debt and normalised working capital position of Redstation at completion.

Redstation earned revenue of £4,202,000 and generated profits before tax of £838,000 in the period since acquisition.

Backup Technology Holdings Limited

The Group acquired 100% of the issued share capital of Backup Technology Holdings Limited ("BTL") on 30 September 2013.

BTL is a Leeds based provider of cloud backup and disaster recovery services to over 200 customers. BTL provides the Group with a proven product, based on Asigra technology, for the cloud backup and recovery market and significantly enhances the Group's existing capability in that area. The acquisition is in line with the Group's strategy to grow its hosting operations both organically and by acquisition.

During the current period the Group incurred £248,000 of third party acquisition related costs in respect of this acquisition. These expenses are included in administrative expenses in the Group's consolidated statement of comprehensive income for the period ended 31 March 2014.

The following table summarises the consideration to acquire BTL and the amounts of identified assets acquired and liabilities assumed at the acquisition date:

	£'000
Recognised amounts of net assets acquired and liabilities assumed:
Cash and cash equivalents	897
Trade and other receivables	1,633
Property, plant and equipment	1,831
Intangible assets	11,736
Trade and other payables	(868)
Current income tax liabilities	(515)
Current borrowings	(705)
Non-current borrowings	(2,022)
Deferred tax liability	(2,229)
Identifiable net assets	9,758
Goodwill	11,786
Total consideration	21,544

Satisfied by:
Cash - paid on acquisition	16,044
Shares issued	3,500
Deferred consideration - paid	2,000
Total consideration transferred	21,544

The recognised amounts of all the net assets acquired and liabilities assumed are final.

The acquisition of BTL included deferred consideration arrangements that required an additional consideration of £2,000,000 to be paid by the Group to the vendors and this amount was paid on 31 January 2014.

The total consideration transferred to the vendors of £21,544,000 together with the debt repaid at completion of £2,569,000 resulted in a total cost of acquisition of £24,113,000, including an amount of £1,113,000 in respect of the cash, additional debt and normalised working capital position of BTL at completion.

BTL earned revenue of £2,860,000 and generated profits before tax of £1,242,000 in the period since acquisition.

Open Minded Solutions Limited

The Group acquired 100% of the issued share capital of Open Minded Solutions Limited ("Open Minded") on 9 September 2013 for a total consideration of £128,432.

The acquisition of Open Minded has had no material effect on the results or the financial position of the Group.

Internet Engineering Limited

The fair values of acquired assets and liabilities, including goodwill, previously disclosed as provisional for Internet Engineering Limited have been finalised in the current period with no changes to the fair values disclosed in the Annual Report and Accounts 2013.

Pro-forma full year information

The following summary presents the Group as if the businesses acquired during the year had all been acquired on 1 April 2013. The amounts include the results of the acquired businesses, a charge for interest on the additional debt incurred to finance the acquisitions and depreciation and amortisation of the acquired fixed assets and intangible assets recognised on acquisition. The amounts do not include any possible synergies from the acquisitions. The information is provided for illustrative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of the future results of the combined companies.

	Pro-forma year ended 31 March 2014
		£'000
Revenue		61,227

Profit after tax for the year		7,492

8. INTANGIBLE ASSETS

	Goodwill	Development costs	Customer relationships	Software	Beneficial contracts	Domain names & IP addresses	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Cost
At 1 April 2012	27,544	1,585	3,467	580	-	31	33,207
Additions	4,237	-	-	20	-	-	4,257
Acquired on acquisition of subsidiary	-	-	6,177	-	86	-	6, 263
Development cost capitalised	-	526	-	-	-	-	526
At 1 April 2013	31,781	2,111	9,644	600	86	31	44,253
Additions	13,098	-	-	24	-	-	13,122
Disposals	-	-	-	(15)	-	-	(15)
Acquired on acquisition of subsidiary	-	-	13,335	1,048	-	249	14,632
Development cost capitalised	-	557	-	-	-	-	557
At 31 March 2014	44,879	2,668	22,979	1,657	86	280	72,549

Accumulated amortisation:
At 1 April 2012	-	(988)	(1,181)	(432)	-	(29)	(2,630)
Charge for the year	-	(408)	(1,297)	(102)	(5)	(2)	(1,814)
At 1 April 2013	-	(1,396)	(2,478)	(534)	(5)	(31)	(4,444)
Disposal	-	-	-	15	-	-	15
Charge for the year	-	(473)	(3,086)	(156)	(7)	(31)	(3,753)
At 31 March 2014	-	(1,869)	(5,564)	(675)	(12)	(62)	(8,182)

Carrying amount:

At 31 March 2014	44,879	799	17,415	982	74	218	64,367

At 31 March 2013	31,781	715	7,166	66	81	-	39,809

All amortisation and impairment charges are included in the depreciation, amortisation and impairment of non-financial assets classification, which is disclosed as administration expenses in the statement of comprehensive income.

During the year, goodwill was reviewed for impairment in accordance with IAS 36 "Impairment of Assets". No impairment charges (2013: nil) arose as a result of this review. For this review goodwill was allocated to individual Cash Generating Units (CGU) on the basis of the Group's operations. The goodwill acquired in the Open Minded Solutions acquisition in the current year has been allocated to the Easyspace CGU and the goodwill acquired in the Redstation and Backup Technology acquisitions have been allocated to the Hosting CGU, as these are the CGUs expected to benefit from the respective business combinations.

The carrying value of goodwill by each CGU is as follows:

Cash Generating Units (CGU)	2014 £'000	2013 £'000
Easyspace	17,137	17,009
Hosting	27,742	14,772
	44,879	31,781

9. PROPERTY, PLANT AND EQUIPMENT

	Freehold property	Leasehold improve-ments	Datacentre equipment	Computer equipment	Office equipment	Motor vehicles	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Cost:
At 1 April 2012	837	3,624	9,732	11,447	826	38	26,504
Additions in the year	-	1,505	1,134	4,991	84	12	7,726
Acquisition of subsidiaries	-	51	349	700	341	-	1,441
Disposals in the year	-	-	-	-	-	(7)	(7)
At 31 March 2013	837	5,180	11,215	17,138	1,251	43	35,664
Additions in the year	-	1,195	5,305	6,290	249	-	13,039
Acquisition of subsidiaries	1,225	357	325	4,831	59	5	6,802
Disposals in the year	-	-	-	(192)	-	-	(192)
At 31 March 2014	2,062	6,732	16,845	28,067	1,559	48	55,313

Accumulated depreciation:
At 1 April 2012	(59)	(821)	(2,831)	(6,594)	(554)	(19)	(10,878)
Charge for the year	(20)	(276)	(844)	(3,624)	(125)	(20)	(4,909)
Disposals in the year	-	-	-	-	-	7	7
At 31 March 2013	(79)	(1,097)	(3,675)	(10,218)	(679)	(32)	(15,780)
Charge for the year	(37)	(321)	(1,109)	(5,535)	(164)	(4)	(7,170)
Disposals in the year	-	-	-	170	-	-	170
At 31 March 2014	(116)	(1,418)	(4,784)	(15,583)	(843)	(36)	(22,780)

Carrying amount:
At 31 March 2014	1,946	5,314	12,061	12,484	716	12	32,533

At 31 March 2013	758	4,083	7,540	6,920	572	11	19,884

Of the total additions in the year of £13,039,000 (2013: £7,726,000), £894,000 (2013: £1,621,000) were funded by finance leases, £1,577,000 (2013: £1,512,000) was included in trade creditors as unpaid invoices at the year end resulting in a net £65,000 (2013: £1,041,000) movement in trade creditors and £429,000 (2013: £971,000) related to non-cash reinstatement provisions. Consequently, the consolidated statement of cash flows discloses a figure of £11,651,000 (2013: £4,093,000) as the cash outflow in respect of property, plant and equipment additions in the year.

10. BORROWINGS

	2014 £'000	2013 £'000

Current:
Obligations under finance leases	(1,038)	(1,252)
Bank loans	(18,090)	(4,872)
Current borrowings	(19,128)	(6,124)

Non-current:
Obligations under finance leases	(1,780)	(1,720)
Bank loans	(11,936)	(3,976)
Total non-current borrowings	(13,716)	(5,696)


Total borrowings	(32,844)	(11,820)

11. ANALYSIS OF CHANGE IN NET CASH/(DEBT)

	Cash and cash equivalents £'000	Bank loans £'000	Other loans £'000	Finance leases and hire purchase £'000	Total £'000

At 1 April 2012	8,935	(4,000)	-	(2,462)	2,473
Repayment of bank loans	-	4,000	-	-	4,000
New bank loans	-	(9,000)	-	-	(9,000)
Inception of finance leases	-	-	-	(1,705)	(1,705)
Impact of effective interest rate	-	152	-	-	152
Acquired on acquisition of subsidiary	331	-	(152)	(232)	(53)
Cash flow	2,126	-	152	1,427	3,705
At 31 March 2013	11,392	(8,848)	-	(2,972)	(428)

Repayment of bank loans	-	16,503	-	-	16,503
New bank loans	-	(37,500)	-	-	(37,500)
Impact of effective interest rate	-	(178)	-	-	(178)
Inception of finance leases	-	-	-	(894)	(894)
Acquired on acquisition of subsidiary	1,355	(3)	(5,731)	(336)	(4,715)
Cash flow	278	-	5,731	1,384	7,393
At 31 March 2014	13,025	(30,026)	-	(2,818)	(19,819)

12. CONTINGENT CONSIDERATION

	2014 £'000	2013 £'000

Contingent consideration due on acquisitions:
- Skymarket Limited	(32)	(232)
- Internet Engineering Limited	-	(126)
- Redstation Limited	(1,239)	-

Total contingent consideration due on acquisitions	(1,271)	(358)

13. ANNUAL REPORT AND ACCOUNTS

The Annual Report and Accounts for 2014 will be posted to shareholders on 25 June 2014 and will also be available free of charge on request from the Company's registered office; Lister Pavilion, Kelvin Campus, West of Scotland Science Park, Glasgow G20 0SP and on the Group's web-site at www.iomart.com.