Glasgow's Iomart has 'powerful building blocks' in place as revenues jump

Iomart’s new chief executive said “powerful building blocks” were in place to take the Glasgow-based cloud computing group to the next level.

Glasgow-headquartered Iomart is a cloud computing and IT managed services business providing hybrid cloud infrastructure, network connectivity, security and digital workplace capability.

Lucy Dimes, who only took up the top role last month following the abrupt departure of previous incumbent Reece Donovan, said the firm had enjoyed a “solid” first half to its financial year, witnessing growth in both revenue and profitability. In a trading update, she told investors that the positive trading performance was a “reflection of the strength of the group’s cloud capabilities and business model, the breadth of its customer base and the ongoing growth of the cloud market”.

The firm is expected to report year-on-year revenue growth of about 18 per cent for the six months to the end of September, to £62 million, while adjusted underlying earnings are set to rise 4 per cent to £18.5m. It said that given the interest rate increases since last year, adjusted profit before tax was expected to see a more modest increase, to about £7.5m from £7.4m a year earlier. Iomart’s half-year results are expected to be released in early December.

The group said its cash generation from trading continued to be strong and consistent with past performance. Net debt has increased to some £49m from £39.8m at the end of March following recent acquisition deals. It said those acquisitions have enhanced the company’s routes to market and depth of skills, improving the customer proposition “to ensure Iomart and its customers can take full advantage of the broader hybrid cloud market opportunity”.

Dimes told investors: “This has been a solid first half of the financial year, seeing growth in both revenue and profitability. Since assuming the role of CEO in the last few weeks, I have been impressed by the knowledge and skills of our team, range of service offering and diversity of our customer base. These are powerful building blocks for us to take Iomart forward with confidence.”

Shore Capital analyst Martin O’Sullivan noted: “The progress since 2021 is encouraging, in our view, and recent large scale, in-depth surveys of the managed IT services sector validate Iomart’s secure hybrid cloud strategy and support a positive medium-term outlook.”

Glasgow's Iomart makes 'sound choice' for new CEO after sudden change at top