With roughly 80 per cent of revenue obtained via sales from commercial partners, Gamma Communications (GAMA) is a relatively unusual telecoms service provider. But this 'indirect' sales method has attracted the attention of some big businesses; Taylor Wimpey, Metrobank and HM Revenue & Customs all signed up to Gamma's services last year, while more than 100 new commercial partners drove the increase in the top line.
Although traditional service sales have been on the decline, Gamma has managed to launch a number of new products and these have been in high demand. The SIP trunking products - which provide integrated, high-speed voice, video and data connectivity - saw a 54 per cent increase in sales in the year, while cloud based telephony service Horizon saw revenues jump 78 per cent as the number of partners accredited to sell the product grew from 258 to 345.
Pre-tax profits were also helped by a one-off £5.7m payment in relation to a ladder pricing scheme - a sharp contrast to the £1.2m-worth of IPO costs booked in 2014.
Broker Investec is expecting adjusted pre-tax profits of £22.2m and EPS at 19.3p in 2016, up from £21.4m and 18.2p last year.
GAMMA COMMUNICATIONS (GAMA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 448p | MARKET VALUE: | £405m | |
| TOUCH: | 442-445p | 12-MONTH HIGH: | 474p | LOW: 266p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 74p* | NET CASH | £24.8m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 131 | 7.3 | na | nil |
| 2012 | 137 | 9.6 | na | nil |
| 2013 | 149 | 11.5 | 10.5 | nil |
| 2014 | 173 | 11.5 | 10.6 | 3.95 |
| 2015 | 192 | 22.6 | 20.4 | 6.60 |
| % change | +11 | +97 | +92 | +67 |
Ex-div: 2 Jun Payment: 23 Jun *Includes intangible assets of £10.4m, or 12p a share | ||||
