iomart (IOM) continues to deliver earnings growth and churn out cash in the fast-moving market for cloud computing. Chief executive Angus MacSween argues that the group's growth profile remains compelling thanks to the "growing number of mobile devices and larger volumes of data" in UK businesses.
The Glasgow-based company, which provides cloud services to small- and medium-sized enterprises, booked a 43 per cent increase in adjusted cash profits to £23.6m for the year to March. That reflected a margin of 42.5 per cent, up from 38 per cent the previous year. Profit growth was at the upper end of analysts' expectations, and its increase ahead of revenues showcases iomart's strong operational leverage.
Organic revenues at iomart's key cloud-hosting segment were up 14 per cent, but the impact of iomart's bolt-on acquisitions was even more pronounced, with total revenues up 40 per cent to £45m. That increase was achieved with only six months of income from the Redstation and Backup Technology businesses, acquired last September.
The group's capacity to meet its growth targets was also enhanced by the multimillion pound fit-out of 600 new server racks at iomart's data centre in Maidenhead.
Broker finnCap expects adjusted EPS of 13.6p this year.
| IOMART (IOM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 240p | MARKET VALUE: | £256m | |
| TOUCH: | 240-243p | 12-MONTH HIGH: | 322p | LOW: 220p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 61p* | NET DEBT: | 31% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 18.3 | 1.3 | 2.1 | 0.40 |
| 2011 | 25.2 | 2.8 | 2.9 | 0.65 |
| 2012 | 33.4 | 5.8 | 6.2 | 0.90 |
| 2013 | 43.0 | 8.7 | 6.9 | 1.40 |
| 2014 | 55.6 | 9.7 | 7.3 | 1.75 |
| % change | +29 | +12 | +6 | +25 |
Ex-div: 13 Aug Payment: 2 Sep *Includes intangible assets of £64m, or 60p a share | ||||
