Iomart's cloud has a 'gold lining' as profits surge 600%

WEB-hosting outfit Iomart yesterday unveiled a 600 per cent surge in profits as demand continues to rise for the Glasgow-based company's "cloud computing" services.

Cloud computing lets users remotely access programs and information from a centrally held server via the internet.

Iomart posted a pre-tax profit of 2.8 million in the year to 31 March, compared with 400,000 in the previous 12 months.

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Turnover rose by 38 per cent to 25.3m and - because the company has a lot of spare capacity in its data centres, where it houses its servers - increases in revenue filter straight through to its bottom line.

Chief executive Angus MacSween told The Scotsman: "The cloud computing market is huge and we just need to take a tiny share of that market to be very successful.

"Our Easyspace web hosting service in Glasgow is continuing to return good margins but it's our cloud computing services that are now offering high levels of growth."

MacSween revealed that he is on the lookout for acquisition targets overseas - specifically in the United States - as the company continues to add new services to its portfolio.

The firm already has data centres in the US and Asia, but it has no staff overseas as the computing equipment is remotely controlled from the UK.

Simon Strong, an analyst at Evolution Securities, said: "The fixed-cost nature of the business coupled with strong revenue growth of 38 per cent year-on-year has delivered a very positive bottom-line performance.

"This operational gearing will follow through into 2012 and we expect another robust performance this year.

"We know of few IT businesses delivering this level of organic growth."

House broker Peel Hunt added that cloud computing had "a gold lining" for Iomart and reiterated its "buy" rating.

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