No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Iomart said in an update on Thursday that group revenue rose 25% to about £77.7m in the six months ended 30 September, driven by its acquisition of Atech, as the cloud services provider prepared for a stronger second half of the year.
The AIM-traded company said trading was in line with board expectations, with improving customer renewals and a growing share of revenue from Microsoft-related services.
Revenue from Atech, acquired in October last year, contributed £21.7m in the first half, while underlying revenue from the core Iomart business fell by around £6m following customer churn last year.
About 30% of group revenue now came from Microsoft-connected activities, up from roughly 7% two years ago, reflecting what Iomart described as "the increasing relevance of our skills and capabilities to customers in this high-demand space".
Adjusted EBITDA was expected to be £12.7m, down from £17m a year earlier, reflecting lower recurring revenue in traditional private cloud and data centre services and a shift toward higher-growth but lower-margin Microsoft product offerings.
Adjusted losses before tax were expected to be around £2.3m, swinging from a £4.3m profit a year earlier, impacted by higher interest costs and broadly steady depreciation and amortisation charges.
Net debt stood at £109.5m at the end of September, up from £101.9m on 31 March, reflecting higher interest and Broadcom-related payments as well as one-off costs of about £1.5m.
The company's £115m revolving credit facility remained drawn at £97.5m and runs until June 2027.
Looking ahead, the board said it expected improved performance in the second half, supported by positive order bookings, lower customer churn in its infrastructure segment, and £4m of annualised cost savings.
Further efficiency measures and targeted sales initiatives were under way to support growth.
Iomart said it would publish its half-year results on 26 November.
At 1340 GMT, shares in Iomart Group were up 14.42% at 24.72p.
Reporting by Josh White for Sharecast.com.
