Iomart revenues jump after investment in sales arm

Iomart chief executive Angus MacSween. Picture: Contributed
Iomart chief executive Angus MacSween. Picture: Contributed
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Iomart, the Glasgow-based cloud computing and web hosting company, has recorded a jump in revenues on the back of investment in its sales functions.

The Aim-quoted IT group posted an 8 per cent rise in turnover to £55.1 million in the half-year to 30 September, pointing to more than £1m annualised investment in its "sales engine" and a broader mix of revenues.

Pre-tax profits increased by 15 per cent to £8.4m in the period.

Iomart now operates 25 sites globally, establishing operations in Paris, Frankfurt and Amsterdam in the last six months.

The business, which has doubled in size during the past five years through organic and acquisitive growth, indicated future buy-outs could be in the pipeline.

Larger contract wins

Chief executive Angus MacSween said: “The positive trading performance from the group reflects the investment we are making in our sales engine which has delivered significantly more business from new customers than the comparable period.

"We have also seen an increasing level of larger, more complex enterprise contract wins, whose revenue will start to be recognised in the second half of the year and beyond.

“This momentum, combined with high levels of visibility within our recurring revenue business model gives increasing confidence that we are on track for an improving trend in our organic growth. In addition, we continue to see opportunities to enhance this growth through acquisitions."

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In June, the business reported that annual revenues had surpassed £100m for the first time, hailing new customer wins and a “stronger pipeline of opportunities”.

Arlene Ewing, investment manager at Brewin Dolphin, added: “It’s another robust set of results from Iomart, which has delivered strong earnings growth over the past few years. A combination of organic growth and strategic acquisitions have put the business in a good place, and its continued geographical diversification is another positive development.

"While the principal concern about the company has been over its ability to compete with the larger players in the cloud services market – a fact reflected in some share price volatility – Iomart continues to thrive.

"The shares are still some way off their peak of last year, but Iomart’s prospects are sound in a world that continues to rely more and more heavily on the cloud.”