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Redecentric FY earnings grow, four 'larger customers' unexpectedly cancel contracts

Thu 16 May 2024 12:10 | A A A

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(Sharecast News) - Cyber security firm Redcentric said on Thursday that both revenue and earnings had grown in the year ended 31 March but noted it had experienced installation delays at the London Technology Centre and contract cancellations by several large customers.

Redecentric said annual revenues were up 15.1% at £163.1m, with recurring revenues up 16% at £149.1m to make up 94.1% of total revenues, while adjusted underlying earnings were 15.9% at £28.4m. On the other hand, adjusted net debt rose 17.7% to £41.9m.

The AIM-listed group said planned electricity conservation measures were completed by the year end but said the installation of the LTC cooling infrastructure was delayed by four-and-a-half-months as a result of having to decontaminate the cooling system water prior to the installation of the new plant.

Redecentric also noted that the closure and decommissioning of its Harrogate data centre was completed at the end of March and said whilst most customers were successfully migrated to its Elland data centre, four larger customers unexpectedly decided to cancel their contracts.

The annualised revenue and profit from these customers totalled £2.6m and £1.3m, respectively, which will result in reduced associated revenues and profits of £2.0m and £1.0m in FY25, however, Redcentric added that this loss will be partly offset by reduced annual running costs resulting from the closure.

Chief executive Peter Brotherton said: "FY24 was a very productive year with all the original integration programmes completed, generating cost savings either in line or slightly ahead of our expectations.

"Looking forwards, our key tasks for FY25 will be to continue to drive organic growth and focus on delivering productivity gains to drive improved margin and cashflow performance."

As of 1200 BST, Redecentric shares were down 5.79% at 134.72p.

Reporting by Iain Gilbert at Sharecast.com

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