Pre-close Trading Update and appointment of COO

RNS Number : 1452L

Redcentric PLC

29 September 2016

 

29 September 2016

Redcentric plc

("Redcentric" or the "Company")

Pre-close Trading Update and appointment of Chief Operating Officer

Redcentric plc (AIM:RCN), a leading UK IT managed services provider, is today issuing a pre-close trading update for the first half of the financial year ending 31 March 2017.

Business update

Through the first half of this year, Redcentric's growth pattern has been similar to previously, with upper single digit organic growth in recurring revenues being augmented with acquisitions to deliver low double digit headline recurring revenue growth. This has been offset by the planned continued reduction in low margin product sales. 

The realisation of synergies from prior acquisitions and a beneficial shift in the revenue mix have helped to drive a mid-teens percentage increase in EBITDA.

Cash generation has improved during the period with a corresponding reduction in debtor days. Net debt is expected to have fallen from 1.0x EBITDA at 31 March 2016 to under 0.8x annualised adjusted EBITDA at the half year, reflecting stronger underlying cash-flow generation and growth in EBITDA. Including the proceeds of the sale of the Cambridge network announced and received on 26 September 2016, net debt is expected to be around 0.6x annualised adjusted EBITDA at the half year.

Strengthening of Operating Board

Redcentric is pleased to announce the appointment of Mo Siddiqi as Chief Operating Officer.  Mo joins from Computacenter, an IT infrastructure services provider, where he was International Director.  Under his leadership, international contracts became a significant contributor to Computacenter's Group Contract Base, including many of the company's largest customers. He joins Redcentric's Operating Board and will be responsible for Sales and Operations.

Outlook

The Board remains confident in the outlook for the business and expects to deliver results in line with its expectations for the year. 

Redcentric is expecting to report results for the six months to 30 September on 14 November 2016.

Fraser Fisher, Chief Executive Officer of Redcentric, commented;

"Our focus on the provision of critical IT services delivered under long term contracts through a recurring revenue model has continued to provide stability for the business, and allowed us to continue to grow the business through the first half of the year. We have won a number of new customers and have expanded services to many existing customers which sets us up well for the second half of the year and beyond."

Enquiries:

Redcentric plc	[phone]
Fraser Fisher, Chief Executive Officer
Tim Coleman, Chief Financial Officer
Numis Securities Limited - Nomad & Joint Broker	[phone]
Simon Willis / Oliver Hardy / Ben Stoop
finnCap Ltd - Joint Broker	[phone]
Stuart Andrews / Rhys Williams
MXC Capital Markets LLP - Financial Adviser	[phone]
Marc Young / Charlotte Stranner
Tulchan	[phone]
James Macey White / Matt Low

 

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