iomart Group: Half-year Report
Strong progress in converting the growing sales pipeline
iomart (AIM:IOM), the cloud computing company, is pleased to report its consolidated half yearly results for the period ended 30 September 2019 (H1 2020).
- Revenue up 8% to £55.1m (2019: £50.9m)
- Adjusted EBITDA* up 3% to £21.8m (2019: £21.1m)
- Adjusted profit before tax** down 8% to £11.5m (2019: £12.4m)
- Profit before tax up 15% to £8.4m (2019:£7.3m)
- Adjusted diluted EPS*** down 7% 8.4p (2019: 9.0p)
- Basic EPS up 19% to 6.4p (2019: 5.4p)
- Interim dividend per share up 6% to 2.6p (2019: 2.45p)
Adjusted EBITDA* benefitted by £1.5m from transition to IFRS 16 lease accounting
Adjusted profit before tax** and earnings per share3 reflects over £1m annualised investment in sales engine and broader mix of revenue
Cash generated from operations in the period of £20.6m (H1 2019: £14.5m) which retains the consistently strong profit to cash conversion
Period end net debt of £58.7m, at a comfortable level of 1.3 times annualised EBITDA****
- Increased investment in sales engine has led to an acceleration in organic growth rates with orders well ahead of prior period, coming through to revenue in the months ahead
- Continued market leading profitability and low customer attrition
- Final planning phases for investment in our acquired Manchester datacentre, where we see growing demand
- Now over 25 points of presence around the world with capability established in Paris, Frankfurt and Amsterdam in the last six months
- Growing sales pipeline, on track for an improving trend in organic growth rate, in line with management expectations
A full reconciliation between adjusted and statutory profit before tax is contained within this statement. The largest variance within the adjustments relates to the £0.7m reduction in contingent consideration on the 2018 LDeX acquisition which translates to a gain within the income statement. In the prior period a similar accounting entry was recorded for the 2017 Sonassi acquisition but in that situation it was a loss of £1.4m on the finalisation of the earn-out final payment which was higher than previously expected.
Angus MacSween, CEO commented,
“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. With a wide portfolio of managed cloud services, we are confident in our ability to capitalise on the significant and sustainable market opportunity ahead, underpinning the Group’s long-term prospects.”
*Throughout this statement adjusted EBITDA is earnings before interest, tax, depreciation and amortisation (EBITDA) before share based payment charges, acquisition costs, and (loss)/gain on revaluation of contingent consideration. Throughout this statement acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
**Throughout this statement adjusted profit before tax is profit before tax, amortisation charges on acquired intangible assets, share based payment charges, acquisition costs and (loss)/gain on revaluation of contingent consideration.
***Throughout this statement adjusted earnings per share is earnings per share before amortisation charges on acquired intangible assets, share based payment charges, acquisition costs, (loss)/gain on revaluation of contingent consideration and the taxation effect of these.
****Annualised EBITDA is two times EBITDA for the period ended 30 September 2019.
This interim announcement contains forward-looking statements, which have been made by the directors in good faith based on the information available to them up to the time of the approval of this report and such information should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information.
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