Iomart chief upbeat as annual profits jump 11%

The chief executive of Iomart today said he was looking ahead with confidence as the web hosting firm posted a jump in annual profits.

Iomart chief executive Angus MacSween. Picture: Contributed

Angus MacSween said the long-term opportunities for the Glasgow-based group were “bigger than ever” as it reported adjusted underlying pre-tax earnings of £32.3 million for the 12 months to the end of March, an increase of 11 per cent on the previous year’s figure of £29.1m.

Statutory pre-tax profits jumped 21 per cent to £13m, on revenues 16 per cent higher at £76.3m, bolstered by last year’s acquisition of London-based cloud computing consultancy SystemsUp and the purchase in November of United Hosting.

MacSween, who co-founded Iomart in 1998, said the business was on track to make further acquisitions in the coming year, adding that trading since the start of its new financial year “remains good and in line with market expectations”.

He added: “The long-term opportunity is bigger than ever. The investments we have made in our staff, skillsets and industry relationships mean we are well positioned to take advantage of that opportunity and to deliver further significant growth.

“I look forward, once again, with confidence to the year ahead.”

MacSween told The Scotsman that the Aim-quoted company has the “financial firepower” to secure more deals, adding: “It’s rare that we’re not in conversation with someone about a potential acquisition. We probably get offered two businesses a week, but we reject about 90 per cent of them as not fitting the criteria we have.

“It’s still a very fragmented market and there’s not that many bigger than Iomart in the UK, so there’s still the opportunity to build a business that’s of a serious size and that’s what we’re trying to do.”

He added: “I can genuinely say the business is better positioned than it was a year ago. We made a good move in buying SystemsUp and spent a lot of the year strengthening and deepening our relationships with the large vendors in cloud, such as Amazon Web Services, Microsoft and Dell-EMC. We still have more to do but when I look at how we’re positioned for the opportunities ahead, I’d say we’re in a good place.”

Iomart proposed a final dividend of 3.15p a share, to be paid on 30 August, representing an increase of 26 per cent over last year’s payout.

In the wake of today’s results, analysts at house broker Peel Hunt said: “Iomart is delivering solid organic growth, supplemented by acquisitions. A strong balance sheet supports further consolidation of the sector and future upgrades.”