Glasgow cloud computing group Iomart 'pleased with progress' despite drop in revenue

Iomart, the Glasgow-headquartered cloud computing group, is on track to report annual revenues of about £103 million, down on the year before but in line with market projections.

In a trading update to investors, the group said it was pleased that renewal levels had improved in the latter half of the year, meaning that recurring revenue - some 93 per cent of full-year group revenue - was more stable in the second half.

Bosses said the inflationary pressures being experienced across the UK business market were being “monitored and addressed”.

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For the year to the end of March, the group expects to report revenues of around £103m, compared with £111.9m the year before, adjusted underlying earnings of approximately £38m, against £41.4m last time, and adjusted profit before tax in the region of £17m, down from £19.6m.

Iomart CEO Reece Donovan. Picture: Peter Devlin

The firm’s strong profit margins remain stable, Iomart added, and cash generation continues to be strong, with the year-end net debt expected to be about £43m, reducing from £54.6m ahead of expectations.

Iomart added: “The group has made good progress in the development and execution of its growth strategy. The year has seen the launch of several new service offerings, the creation of a strategic cyber-security partnership, and continued investments across sales and marketing.”

Chief executive Reece Donovan told investors: “I am pleased by the progress we have made during the year and reporting financial results in line with market expectations.

“We have launched a number of new solutions to the market, recently entered into an exciting alliance to accelerate our managed cyber security offering, reshaped the commercial team and invested in our customer service tools and resources.

“It is these steps, along with the on-going execution of our strategic plan, which gives us confidence that we will continue to be successful within the wider growing cloud sector.”

The firm expects to report its results for the year to March 31 on June 14.

In December, Iomart secured a £100m financing facility to back its growth plans. The firm said it had agreed a refinancing, replacing an existing single bank revolving credit facility of £80m that was due to mature at the end of next September, with a new £100m facility.

It is being provided by a group of four banks - HSBC UK, Royal Bank of Scotland, Bank of Ireland and Clydesdale Bank, part of Virgin Money group.

The group also insisted in December that its growth strategy was on track and beginning to deliver “tangible results” after a mixed first-half performance.

Meanwhile, Glasgow-based Beeks ­Financial Cloud Group confirmed that it had raised total gross proceeds of about £15m through a share placing. The fundraising was “significantly” oversubscribed.

Chief executive Gordon McArthur said: “We would like to thank all new and existing investors who have participated in the fundraising for their support.

“With financial services organisations accelerating their cloud transition strategies, we see a huge opportunity ahead for our private cloud, proximity cloud and exchange cloud offerings, and are focused on the conversion of our record sales pipeline and execution of our product roadmap.”

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