Trading Update

RNS Number : 3517Q

Redcentric PLC

27 October 2021

 

Redcentric plc

("Redcentric" or the "Company")

Trading Update

Redcentric plc (AIM: RCN), a leading UK IT managed services provider, today announces a pre-close trading update for the six months ended 30 September 2021.

Financial Highlights

We are pleased to announce that trading for the six months ended 30 September 2021 is expected to be in line with the Board's expectations, with revenues of £46.4m (H1 FY21: £46.2m) and adjusted EBITDA of £12.0m (H1 FY21: £12.3m). The Company had minimal net debt of £0.4m at 30 September 2021 (31 March 2021: net cash of £1.0m), excluding supplier loans and leases previously classified as operating leases under IAS17. This strong position reflects a final dividend payment of £3.7m, the disposal of the non-core EDF contract for £5.8m and the acquisition of Piksel Industry Solutions Ltd ("Piksel IS") for £9.5m.

Operational Highlights

The integration of Piksel IS is progressing well, and we are on target to have the business fully integrated by the end of the current financial year. Good progress has been made in realising synergies and we are confident of achieving cost savings of at least £1.1m. The acquisition has been well received by both companies' customer bases and we are already in active discussions regarding several cross-sell opportunities.

Outlook

We expect trading for the year ending 31 March 2022 to be in line with the Board's expectations, including strong cash generation consistent with previous guidance.  This is despite a continued lack of largescale IT projects and supply chain issues remaining a feature of the sector.  In addition, several of our electricity supply contracts fell due for renewal during the ongoing UK energy crisis and this will add £0.5m of costs to H2 FY22 and at least £0.5m of costs to H1 FY23.

We continue to make progress on M&A prospecting, with several active conversations underway, a growing pipeline of potential targets and a strong balance sheet.

Notice of Interim results

The Company intends to announce its results for the six months ended 30 September 2021 on Thursday 18 November 2021.

Enquiries:

Redcentric plc     [phone] 

Peter Brotherton, Chief Executive Officer 

David Senior, Chief Financial Officer   

finnCap Ltd - Nomad and Broker                                                                    [phone]

Marc Milmo / Simon Hicks / Charlie Beeson (Corporate Finance)

Andrew Burdis / Sunila de Silva (ECM) 

 

END

 

 

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