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Gamma serves up growth as businesses talk online

The business telecoms group cashed in on robust demand for internet-enabled services

Brisk demand for internet-enabled voice, data and cloud services offset waning landline usage at Gamma Communications (GAMA) in the first half of 2016. The business telecoms group's organic sales growth of 13 per cent, coupled with bigger margins on newer products, propelled adjusted cash profit up a quarter to £16.3m.

IC TIP: Hold at 472p

In management's view, Gamma's success partly reflects its commitment to a standardised 'cut the cookies' product offering rather than a tailored approach. It also relies on a network of more than 900 channel partners, which generated nearly four-fifths of sales and profit in the period. And customers snapped up its top products: the number of installed SIP trunks - which allow telephone lines to transmit voice and data via the internet - rose 15 per cent to 413,000, while users of its cloud telephony product grew by nearly a third in number to 188,000. Those gains outweighed declining sales of legacy product offerings, widening the indirect segment's margin by more than 5 percentage points to 53 per cent.

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