12 April 2023
iomart Group plc
("iomart" or the "Group" or the "Company")
Pre-close Trading Update and Notice of Results
Positive close to the year provides solid basis for FY24
iomart Group plc (AIM: IOM), the cloud computing company, provides its pre-close trading statement for the year ended 31 March 2023 ahead of the announcement of its full year results in June.
Group trading performance
iomart is pleased to report that it expects to deliver full-year financial results in line with market expectations*. The Group has seen stability of customer renewal rates across all areas of the business, providing a solid base of recurring revenues. Meanwhile the sales pipeline improvement noted in H1 converted into stronger order booking levels in H2, providing positive momentum as the Group enters the new financial year.
For the year ended 31 March 2023, the Group expects to report revenue of approximately £115 million (FY22: £103.0 million), adjusted EBITDA(1) of approximately £36.2 million (FY22: £38.0 million) and adjusted profit before tax(2) of approximately £14.6 million (FY22: £17.1 million).
The revenue of £115 million is a record level for the Group and is a combination of a return to long-term historic customer renewal levels, inflationary pricing adjustments, primarily for datacentre energy usage, plus the successful completion of the acquisition of Concepta Capital Limited in August 2022. Non-recurring revenue is expected to be approximately £9.2 million (FY22: £7.1 million) meaning recurring revenue remains high at 92% of total revenue (FY22: 93%).
The datacentre sector as a whole has had to navigate the significant challenges in the energy markets and during the year the Group's electricity costs increased by approximately £7 million. iomart's robust business model and customer arrangements have ensured this additional energy cost has been appropriately passed through to the customer base. The Group's adjusted EBITDA reflects both the revenue mix in the year together with investment in upskilling our employees' capabilities, alongside appropriate wage increases and cost of living support. EBITDA margin in the year was heavily impacted by the pass through of energy costs and to a lesser extent lower margin within the Concepta acquisition, primarily from their reselling activities. The increase in the UK interest rates has pushed the Group's interest expense up by approximately £0.9m year on year.
The Group's cash generation continued to be strong, with the year-end net debt expected to be approximately £41 million (31 March 2022: £41.3 million). This represents a net debt to adjusted EBITDA ratio of 1.1 times (31 March 2022: 1.1 times).
Notice of Results
The Group expects to announce its results for the year ended 31 March 2023 on 13 June 2023.
Reece Donovan, CEO of iomart Group plc, commented:
"I am pleased with the progress achieved this year in our transition to a secure hybrid cloud offering. We saw our pipeline improve in the first half and this converted to stronger order booking levels as we completed the year. The team has worked hard to ensure momentum in the execution of our strategic plan and continuous improvement within the business. This gives us confidence that we will continue to be successful within the wider growing cloud sector."
*Note: Company compiled range is based on known sell-side analyst estimates. The latest known sell-side analyst estimates for the full year ended 31 March 2023 are:
· Revenue in the range of £105m to £116m;
· Adjusted EBITDA(1) in the range of £34.6m to £37.6m; and
· Adjusted PBT (2) in the range of £13.5m to £15.9m
(1)adjusted EBITDA means earnings before interest, tax, depreciation, amortisation, share based payment charges, gains or losses on revaluation of contingent consideration, acquisition related costs and non-recurring items.
(2)adjusted profit before tax means profits before, tax, share based payment charges, amortisation of acquired intangibles, gains or losses on revaluation of contingent consideration, acquisition related costs and non-recurring items.
For further information:
iomart Group plc
Tel: 0141 931 6400
Reece Donovan, Chief Executive Officer
Scott Cunningham, Chief Financial Officer
Investec Bank PLC (Nominated Adviser and Broker)
Tel: 020 7597 4000
Patrick Robb, Virginia Bull, Nick Prowting
Tel: 020 3405 0205
Caroline Forde, Hilary Buchanan, Joe Pederzolli
About iomart Group plc
iomart Group plc (AIM: IOM) is a cloud computing and IT managed services business providing hybrid cloud infrastructure, network connectivity, security, and digital workplace capability. Our mission is simple: to make our customers unstoppable by enabling them to connect, secure and scale anywhere, anytime. From our portfolio of data centres we own and operate across the UK to connected sites around the world, our 400-strong team can design and deploy the right cloud solution for our customers.
For further information about the Group, please visit www.iomart.com