Iomart hails ‘excellent’ trading as profits jump 56%

Web hosting firm Iomart is searching for more takeover opportunities after a series of deals helped deliver a 56 per cent jump in annual profits.

Chief executive and co-founder Angus MacSween told The Scotsman that the Glasgow-based firm receives at least one approach a week from companies looking to be bought over, but he was keen to focus on larger targets.

Deals during the past year included the £1.4 million purchase of Skymarket in July, and the takeover of Melbourne Server Hosting the following month for £6.7m.

MacSween said: “We would expect to make further acquisitions in the year ahead. We’ll probably make fewer but bigger deals, and we’re seeing more opportunities overseas as we become bigger.

“Things pop out of the woodwork all the time, and there’s always something around the corner, but we walk away from a lot of stuff. We said no to three deals in the last week, and we get at least one opportunity a week to buy something.”

MacSween was speaking after Iomart posted an adjusted pre-tax profit of £10.7m for the 12 months to the end of March, up from £6.9m the previous year.

Acquisitions accounted for almost half the profit growth, and the firm also benefited from the shift towards “cloud” computing, where customers outsource the storage of their data and applications.

MacSween said the price of storage has fallen sharply as companies and their customers generate increasing amounts of data – for example, 100,000 tweets and 204 million e-mails are sent every minute.

During the year, revenues grew 29 per cent to £43.1m and a final dividend of 1.4p a share was proposed, up from the previous year’s 0.9p.

Shares in Iomart have risen about 80 per cent in the past year and analysts at Cannacord Genuity, which expects profits to grow to about £13.3m in the current year, said: “The company’s scarcity value as the high-quality play on cloud services in the UK suggests that the premium valuation is warranted.”