World of remote working provides long-term boost to Glasgow’s Iomart

Iomart, the Glasgow-based cloud computing and web hosting company, said the switch to remote working would be a “growth driver” for its business over the longer term as it unveiled its 12th consecutive year of growth.

Angus MacSween is the chief executive of Glasgow-headquartered Iomart.

Chief executive Angus MacSween said the group’s “robust business model” was providing resilience during the coronavirus lockdown.

Revenue was up 9 per cent to £112.6 million in the year to the end of March, taking in the first few days of full lockdown, with the majority of the growth derived organically in the year.

Adjusted underlying earnings were up 3 per cent to £43.5m, while profit before tax rose 4 per cent to £16.8m. Adjusted profit before tax was down 11 per cent to £22.8m, reflecting more than £1m of investment in boosting sales and a “broader mix of revenue”.

The group said it had traded in line with management expectations in the first two months of the new financial year, consistent with its “high recurring revenue business model”.

MacSween said: “This is the 12th consecutive year of growth since the transition of the business to cloud services in 2008 with the acquisition of our first data centres.

“As we look forward to the next stage of growth, we do so with our teams all working remotely and the world around us considerably changed due to the global impact of Covid-19. Our focus must be first and foremost on the well being of our people, all of whom have risen to the challenge fantastically, for which I and the board are extremely grateful.”

He added: “The switch to remote working across the world has only accelerated the move to the cloud which we believe will be a growth driver for our business over the longer term.”

John Moore, senior investment manager at Brewin Dolphin, noted: “The outbreak of Covid-19, and some of the measures that followed, has added momentum to many of Iomart’s long-term growth drivers – social distancing, for example, will likely lead to more digital transformation as well as investment in, and reliance on, the cloud.

“While, like most companies, there will be some uncertainty over the renewal of contracts, Iomart is in a strong financial position and appears well placed should it wish to continue its acquisition spree of the last few years.”

The group proposed a final dividend of 3.93p per share, down from 5.01p, resulting in a total payout for the year of 6.53p, compared with 7.46p previously.

Iomart noted: “The board has taken the decision to pay a final dividend to shareholders as a result of the recurring revenue nature of the group, the level of operating cash which we now deliver and the low level of indebtedness.

“Should the impact of Covid-19 increase in the year ahead, the board will keep the level of future dividend payment under review.”

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