Glasgow cloud computing group sees revenues and profits plummet

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Glasgow-based cloud computing group iomart expects to generate revenue of around £103m, up from £111.9m for the full year of 2021, as well as adjusted profit before tax of around £38m, also down from £41.4m last year.

Its pre-closing trading statement for the year ended March 31, 2022 also revealed adjusted pre-tax profit of around £17 million, up from £19.6 million in 2021.

Profit margins remain stable, with adjusted profit and adjusted pre-tax profit at 36.7% – versus 37% – and 16.8% – versus 17.5% of revenue – respectively.

Cash generation continues to be strong, with year-end net debt expected to be around £43m, down from £54.6m at the end of March from last year ; reduction ahead of expectations.

The board of directors welcomed the improvement in renewal levels in the second half, which meant that recurring revenues, which represent around 93% of the group’s full-year turnover, were more stable in the second semester.

The statement noted that inflationary pressures being experienced in the UK business market are being “watched and addressed”.

During the year, iomart launched several new service offerings, created a strategic cybersecurity partnership and continued to invest in sales and marketing.

Chief Executive Reece Donovan said, “I am pleased with the progress we have made during the year and the release of financial results in line with market expectations.

“We launched a number of new solutions to market, recently entered into an exciting alliance to accelerate our managed cybersecurity offering, reshaped the sales team, and invested in our customer service tools and resources.

“It is these milestones, along with the continued execution of our strategic plan, that give us confidence that we will continue to succeed in the growing cloud industry.”

The group plans to publish its results for the year to March 31, 2022 on June 14.

Andrew Darley, Technical Analyst at finnCap, commented: “After a few difficult reporting periods, online delivery is positive – and there is renewed energy, evident in cybersecurity initiatives, which may indicate that the nadir has been surpassed, and relatively new Managing Director Reece Donovan’s initiatives to expand and update the portfolio are bearing fruit.

“Cyber ​​is essential for iomart to provide a comprehensive portfolio to its customers – from a choice of cybersecurity delivery paths, the partnership enables an instant solution operational with prevarication, without excluding alternatives, and in doing so, generates revenue before investment, a smart approach.

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