Iomart exceeds £100m in sales

Top-line expansion – albeit hardly gargantuan – reflected an 8 per cent increase within the cloud division, to £90.6m. True, only 2 per cent of such growth was organic – down from 3 per cent 12 months earlier, or from 7 per cent excluding a low-margin public-cloud consultancy project in FY2017. Iomart attributed this slowdown to the cumulative effects of lower new customer orders in both FY2018 and FY2019. But it has taken action here, refreshing its sales and marketing teams. Signalling progress on this strategy, the final month of the reporting period – March – was the best in terms of revenues.

The group also enjoyed a full-year contribution from Dediserve, Simple Servers and Sonassi – all bought during the previous year. And it benefited from the acquisitions of Bytemark last August and LDeX last December. Bytemark – purchased for £4.9m – provides managed and cloud-based hosting services via its owned datacentre in York. LDeX was purchased for up to £11m. It provides colocation, managed networks and media-streaming services to customers from its datacentres in London and Manchester.

Further down the income statement, the operating margin widened from 15.1 per cent to 18.1 per cent. Meanwhile, the group reported a decent increase in statutory pre-tax profits – even after factoring in costs tied to transactions, share-based payments and losses on the revaluation of considerations relating to acquisitions.

Adjusted cash flow from operations landed at £39.1m, down slightly from £40.8m. Still, this represents considerable fuel for future acquisitions. 

Broker FinnCap expects adjusted pre-tax profits of £27.9m and EPS of 20.6p for March 2020, up from £25.5m and 18.6p in FY2019.