Further deals sought by Glasgow-based cloud computing firm Iomart after record FY sales

Cloud computing firm Iomart has stressed that it remains actively on the lookout for acquisition targets after posting record full-year revenues it says were buoyed by key deals.

The Glasgow-based, Aim-quoted firm has reported pre-tax profit for the 12 months to March 31 of £8.5 million, a year-on-year drop of 30 per cent, while basic earnings per share fell by just over a quarter to 6.4p, with a proposed final dividend per share of 3.5p, down by 3 per cent. Revenue reached £115.6m, up 12 per cent, which it said reflects factors such as organic revenue growth in core cloud managed services, and its acquisition of Concepta in August – which “provided £6.2m of revenue, a positive profit contribution, and is performing well”.

Iomart also cheered its recently announced purchase of Extrinsica Global, saying it “provides a large step forward in the group’s capabilities to support existing and new customers in their use of Microsoft’s Azure cloud platform”.

In terms of outlook, the firm believes it will maintain its “structured and disciplined” approach to M&A (mergers and acquisitions) and remain active in assessing potential targets. It added that first two months of the new financial year are “in line with internal expectations, reporting revenues ahead of the equivalent prior period”.

CEO Reece Donovan says: 'A higher level of M&A activity has been pleasing to see, with two acquisitions having been completed in the last ten months.' Picture: Peter Devlin.

Chief executive Reece Donovan said: “This has been another busy year at Iomart for the full team. Together, we have generated good momentum across both the commercial and operational areas. A higher level of M&A activity has also been pleasing to see, with two acquisitions having been completed in the last ten months. The increase in the effectiveness of our sales activities, the operational improvements made, the resilience of our business model and our clear focus on execution gives us a stronger foundation on which to accelerate organic growth whilst making selective acquisitions.”

Analyst Martin O'Sullivan of Shore Capital said: “We see Iomart building positively on market expectations and its subdued valuation over the next 12 months, given that it is executing well against its strategic roadmap.” He also noted that Iomart’s stock has, at 165p, outperformed the FTSE AIM All Share by 40 per cent this year so far and 4 per cent in the past 12 months, “justifying our BUY recommendation”.

Report

Iomart is also mentioned in a new report on datacentre development in Scotland, featuring in a list of ten existing colocation centres north of the Border. Host in Scotland, the umbrella organisation for the Scottish datacentre and subsea sector industry, and which is managed by Scottish Futures Trust and Scottish Enterprise, has identified five potential new sites – Aberdeen ETZ, Queensferry One and Westfield Park in Fife, Millerhill/Old Craighall in Midlothian and Whitecross Innovation Park, Falkirk – for green datacentre development. It brings the list of potential sites across Scotland to 20.

Dr Andrew Muir, chief executive at FarrPoint said: “With its expanded list of desirable sites, our updated report is likely to be of great interest to current data centre owners or operators in Scotland, as well as potential new entrants to the market, infrastructure providers and investors.”

Suzanne Sosna, director of economic opportunities at Scottish Enterprise, said: “We hope the report will kick-start conversations about Scotland’s attractiveness as a destination for these developments, leading to more investment and economic growth for the country.”