Pre-close Trading Update and Notice of Results

Iomart Group PLC

11 April 2024

 

11 April 2024

iomart Group plc

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

Pre-close Trading Update and Notice of Results

iomart Group plc (AIM: IOM), the secure cloud services company, provides its pre-close trading statement for the year ended 31 March 2024 ahead of the announcement of its full year results on 11 June 2024.

Group trading performance

iomart expects to deliver a solid set of full-year financial results which demonstrate the resilience of the Group in the face of an ongoing challenging economic backdrop for UK businesses.  

For the year ended 31 March 2024, the Group expects to report revenue growth of 10% to approximately £127.0 million (FY23: £115.6 million), adjusted EBITDA⁽¹⁾ growth of 4% to approximately £37.5 million (FY23: £36.2 million) and adjusted profit before tax⁽²⁾ of approximately £15.0 million (FY23: £14.8 million), reflecting the increased interest expense in the year of approximately £4.3 million (FY23: £2.9 million). Recurring revenue remains high, at c.91% (FY23: 92%) of Group revenue.

The Group's cash generation continued to be strong, with the year-end net debt expected to be approximately £43.0 million (31 March 2023: £39.8 million), after M&A related cash payments in the year of approximately £15.0 million. This would represent a net debt to adjusted EBITDA⁽¹⁾  ratio of approximately 1.1 times (31 March 2023: 1.1 times). 

The Group has seen good growth in order bookings within its managed services business, as both existing customers and prospects have responded positively to our broader solution set and re-invigorated focus on customer service. The positive financial impact of this has been held back by lower than expected customer renewal rates in H2, including across the long tail of smaller customers, that have shown more sensitivity to the energy price rises which were applied towards the end of FY23. As the Group continues its evolution towards a broader portfolio of managed service offerings, the impact of potential lower level of renewals in our smaller customer base and more commoditised areas of the business will decrease.

The Extrinsica acquisition, which completed on 5 June 2023, has brought a demonstrable increase in the Microsoft based capabilities of the Group, and increased its revenues year-on-year albeit that growth was tempered by the delay of some larger orders from existing customers. As a result, none of the earn-out consideration will now be payable. The process of integration of Extrinsica within the Group is now well underway, providing the Group's existing customers with full access to these Microsoft capabilities. Accesspoint Technologies, acquired on 5 December 2023, is performing in line with expectations. 

Lucy Dimes, CEO of iomart Group plc, commented:

"I am pleased with the progress achieved in the year, with the increasing strength of our offering reflected in good order growth. Our resilient financial results, extensive customer base and deep technical expertise continue to provide a solid platform for enhanced revenue growth over the medium term, from extended product solutions, focused sales and marketing activity and complementary M&A.

Our three most recent acquisitions have all added recurring revenue growth in the post-acquisition period, and we see continued M&A activity as an important part of strengthening our overall capability and market growth plans. We continue to be active in the identification of targets which add skills, experience and capability to enhance our proposition, as we drive the business to be the UK's leading secure cloud services provider."

Note: Company compiled range is based on known sell-side analyst estimates. The latest known sell-side analyst estimates for the full year ended 31 March 2024 are:

·	Revenue in the range of £128m to £131m;
·	Adjusted EBITDA(1) in the range of £37.4m to £38.7m; and
·	Adjusted PBT (2 in the range of £14.3m to £16.0m

⁽¹⁾adjusted EBITDA means earnings before interest, tax, depreciation, amortisation, share based payment charges, gains or losses on revaluation of contingent consideration, acquisition related costs and non-recurring items.

 ⁽²⁾adjusted profit before tax means profits before, tax, share based payment charges, amortisation of acquired intangibles,  gains or losses on revaluation of contingent consideration, acquisition related costs and non-recurring items.

For further information:

iomart Group plc	Tel: [phone]
Lucy Dimes, Chief Executive Officer & Chair
Scott Cunningham, Chief Financial Officer
Investec Bank PLC (Nominated Adviser and Broker)	Tel: [phone]
Patrick Robb, Virginia Bull
Alma Strategic Communications	Tel: [phone]
Caroline Forde, Hilary Buchanan, Kinvara Verdon

About iomart Group plc

iomart Group plc (AIM: IOM) is a leading secure cloud provider offering hybrid cloud, data protection and cyber security managed services, underpinned by our extensive data centre and network infrastructure. Our mission is simple: to support our customers by enabling them to connect, secure and scale anywhere, anytime. From our portfolio of data centres we own and operate across the UK to connected sites around the world plus global technology vendor relationships, our 500-strong team can design, deploy, secure and manage the right cloud solution for our customers.

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

 

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