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(Sharecast News) - Iomart reported a wider adjusted loss for the year on Tuesday as churn in legacy private cloud and backup services offset revenue growth from Atech, although the AIM-traded secure cloud services group said second-half profitability had improved and cost savings were on track.
Revenue rose 8% to 154.9m in the year ended 31 March from 143.5m, reflecting a full-year contribution from Atech, but declined organically as customer churn hit private cloud managed services and lower opening run-rate revenues weighed on performance.
Recurring revenue accounted for 86% of the total, down from 89%.
Adjusted EBITDA fell to 25.6m from 34.3m, while adjusted EBIT declined to 5.2m from 12.8m, reducing the adjusted EBIT margin to 3.3% from 8.9%.
Iomart swung to an adjusted pre-tax loss of 4.0m from a 6.5m profit, while its statutory pre-tax loss narrowed to 13.6m from 53.2m, with the prior year including a 52.9m goodwill impairment.
The company said gross order bookings were 20.6m of annual recurring revenue, broadly ahead of the prior year excluding Atech, but were offset by 21.2m of churn, particularly in Microsoft Modern Work offerings and the final legacy backup platform customers.
Net debt rose to 108.6m from 101.9m, although operating cash conversion remained strong at 96% of adjusted EBITDA before exceptional items.
After the year end, Iomart extended its 115m revolving credit facility to 30 June 2028.
Executive chair Richard Last said FY26 had been "a year of transition and repositioning", adding that the group had delivered its 4m annualised cost savings target and entered FY27 with a clearer strategic framework.
The company said it expected a modest revenue decline in FY27, but anticipated an improved profit profile in the second half as cost actions, operational efficiency measures and a focus on higher-value cloud, security and data protection services take effect.
At 0952 BST, shares in Iomart Group were down 18.94% at 14.59p.
Reporting by Josh White for Sharecast.com.
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