Iomart posts revenue hike amid plan for fresh acquisitions

Cloud computing company Iomart has unveiled increased revenues and pre-tax profits as it looks to expand its footprint with further acquisitions.

Iomart's chief executive Angus MacSween said the trading performance reflected 'the strength of our cloud capabilities and business model'. Picture: Contributed

The Glasgow-based firm reported revenue growth of 8 per cent to £50.9 million for the half-year ending 30 September, a figure it strongly anticipates will rise to £100m for the full-year.

Profit before tax was £12.4m, up 7 per cent year-on-year, while adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) hit £21.1m, a 10 per cent increase.

Iomart cited a growing customer base and new acquisitions as driving profitability, in a period which saw the firm buy York-based managed hosting business Bytemark for a total consideration of £4.9m. It marked the latest in a string of acquisitions for the Glasgow firm.

Although net debt rose from £24.5m to £33.6m, the company reported this was “a very comfortable level of debt to carry” at less than one times the annualised Ebitda.

Iomart, which is listed on London’s alternative investment market, indicated an increased dividend of 2.45p per share.

Speaking to The Scotsman, chief executive Angus MacSween said: “We’re very comfortable with the results. A lot of work has gone into reinvigorating the business this year and getting stronger organic growth next year.

“We’re confident that we’ll get through the £100m revenue barrier this year. The beauty of our recurring revenue business model is that we have very good visibility of revenues, so we pretty much know what our billings for the next few months will be.”

MacSween emphasised Iomart’s long-term potential to expand, through a combination of further acquisitions and organic growth.

He said: “The world has an almost insatiable appetite for more bandwidth, faster downloads, more applications, which of course creates ever more data to process, store or back up.”

He said the group was “well positioned to take advantage” of this and that the market “continues to provide opportunities” for new acquisitions.

He added: “We have fairly strict criteria. We are looking for good customer bases, good recurring revenues, services delivered out of data centres. It’s very likely that Iomart will continue to make acquisitions.”

John Moore, senior investment manager at Brewin Dolphin Scotland, agreed that the potential for growth remained strong. He said: “Although the shares have had a tough time of late, dropping from a peak of 475p in September, there remains a lot of growth potential in the business and these figures may remind potential investors of that.

“The need for data centres and services is only increasing, buoyed by the adoption of new data-hungry technologies such as the internet of things, which can only be good news for Iomart as it continues to expand.”