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IOM Iomart Group Plc

145.40
1.40 (0.97%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Iomart Group Plc LSE:IOM London Ordinary Share GB0004281639 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.40 0.97% 145.40 143.00 145.40 149.80 143.00 144.00 41,414 16:35:26
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Services, Nec 115.64M 7M 0.0624 22.92 160.25M

Iomart Group PLC Final Results (5739P)

09/06/2015 7:01am

UK Regulatory


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TIDMIOM

RNS Number : 5739P

Iomart Group PLC

09 June 2015

9 June 2015

iomart Group plc

("iomart" or the "Group" or the "Company")

Final Results for the Year ended 31 March 2015

iomart (AIM:IOM), the cloud computing company, is pleased to report its consolidated final results for the year ended 31 March 2015.

FINANCIAL HIGHLIGHTS

   --      Revenue growth of 18% to GBP65.8m (2014: GBP55.6m) 
   --      Adjusted EBITDA(1) growth of 23% to GBP29.1m (2014: GBP23.6m) 
   --      Adjusted profit before tax growth(2) of 14% to GBP16.6m (2014: GBP14.6m) 

-- Adjusted diluted earnings per share(3) from operations increased by 16% to 12.63p (2014: 10.85p)

   --      Cashflow from operations increased by 13% to GBP27.2m (2014: GBP24.0m) 
   --      Adjusted EBITDA(1) margins increased to 44% (2014: 42%) 
   --      Proposed final dividend increased by 43% to 2.50p per share (2014: 1.75p per share) 

OPERATIONAL HIGHLIGHTS

   --      Building relationships for Hybrid Cloud opportunities with major players 
   --      Continued M&A activity with the acquisition of ServerSpace 
   --      Acquisition of SystemsUp to address the Public Cloud opportunity 

Statutory Equivalents

The above highlights are based on adjusted results. A full reconciliation between adjusted and statutory results is contained within this statement. The statutory equivalents of the above results are as follows:

   --      Profit before tax growth of 11% to GBP10.8m (2014: GBP9.7m) 
   --      Basic earnings per share from operations increased by 14% to 8.34p (2014: 7.30p) 

(1) Throughout this statement adjusted EBITDA is earnings before interest, tax, depreciation and amortisation (EBITDA) before share based payment charges and acquisition costs. Throughout this statement acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.

(2) Throughout this statement adjusted profit before tax is profit before tax, amortisation charges on acquired intangible assets, shared based payment charges, mark to mark adjustments in respect of interest rate swaps, acquisition costs and in the previous year the accelerated write off of arrangement fees on the bank borrowing facilities which were repaid early during that year.

(3) Throughout this statement adjusted diluted earnings per share is earnings per share before amortisation charges on acquired intangible assets, shared based payment charges, mark to mark adjustments in respect of interest rate swaps, acquisition costs and in the previous year the accelerated write off of arrangement fees on the bank borrowing facilities which were repaid early during that year, including the taxation effect of these.

Angus MacSween, CEO commented,

"We are working hard to ensure we remain at the leading edge in terms of the skill sets and experience to provide an ever more complex set of services to our customers and are confident of our abilities to do so, reinforced by the acquisition of SystemsUp in recent days.

We are well positioned for further significant growth."

For further information:

 
 iomart Group plc      Tel: 0141 931 6400 
 Angus MacSween 
 Richard Logan 
 
 Peel Hunt LLP         Tel: 020 7418 8900 
  (Nominated Adviser 
  and Broker) 
 Richard Kauffer 
  Euan Brown 
 
 Newgate               Tel: 020 7653 9850 
 Adam Lloyd 
 Bob Huxford 
 Ed Treadwell 
 Robyn McConnachie 
 

About iomart Group plc

Award winning cloud company iomart Group PLC (AIM:IOM) enables businesses and organisations to operate their online data and IT environments safely and securely. Headquartered in Glasgow, Scotland, iomart partners with leading vendors such as VMware, Amazon, EMC, Microsoft, Asigra, Arbor and Dell to offer customers a centrally managed, controlled and completely agnostic set of hybrid, private and public cloud platforms. By owning a global network and datacentre infrastructure, iomart can support any customer who wishes to move seamlessly between any and all of these platforms with a consultative level of knowledge and expertise, delivering cloud services to meet exact business needs.

For further information about the Group, please visit www.iomart.com

CHAIRMAN'S STATEMENT

Once again it is extremely pleasing to report on another very good year for your Group. We continue to make excellent progress as we execute on our combined strategy of growing our business both organically and by acquisition. Our reputation as one of the UK's leading cloud computing companies continues to develop.

We have again enjoyed a substantial increase in profitability over the year, driven by both organic and acquisitive growth. This year we have only made the one acquisition during the year, ServerSpace, in December 2014, and we also have benefited from a full year contribution of both Redstation and Backup Technology which were acquired last year.

After the year end we completed the acquisition of Systems Up Limited, a consultancy company with a particular focus on Public Cloud.

All of this progress is a result of a great deal of hard work by our executives and staff and I thank them all on behalf of the Board and the shareholders for their efforts over the year.

The Group has pursued a progressive dividend policy for a number of years now. As a consequence of our continued strong performance we intend to adopt a dividend policy aimed at improving shareholder returns whilst maintaining a strong capital position for future acquisitions. Accordingly, our intention will be, over time, to increase the dividend pay-out to 25% of adjusted diluted earnings per share. This year the Board is proposing to pay a final dividend of 2.5p per share on 1 September 2015 to shareholders on the register on 14 August 2015, representing an increase of 43% over the dividend last year and equivalent to a pay-out ratio of 19.8% of adjusted diluted earnings per share. We continue to offer shareholders the option to participate in a Dividend Reinvestment Plan (DRIP) as an alternative to receiving cash. Details of the DRIP scheme will be distributed with the annual accounts in due course.

We have started the 2015 financial year in a strong position and I look forward to another exciting year of growth with considerable confidence.

Ian Ritchie

Chairman

8 June 2015

CHIEF EXECUTIVE'S REVIEW

Introduction

I am pleased once more to report on another excellent year for iomart. We have increased our revenues and profits both organically and through acquisition as we continue to deliver a widening range of cloud solutions.

Our revenues in the year were GBP65.8m, an increase of 18% over the previous year and our adjusted EBITDA of GBP29.1m showed a 23% increase over the previous year and our profit before tax increased by 11% to GBP10.8m.

The opportunity remains to continue to grow both organically and through a disciplined acquisition strategy.

Market

The market continues to grow and evolve. The number of companies offering cloud services also continues to grow alongside an ever faster consolidation of companies to achieve scale and presence.

Potential cloud customers are confronted by an ever more complex set of decisions in terms of cost, value, effectiveness, complexity, security and compliance. In response, an ecosystem of managed services providers and large infrastructure providers is growing to serve these customers. Because the cloud has disrupted the traditional IT value chain, cloud service providers (CSPs) are now forming key alliances allowing them to excel at the delivery of one or more service whether it be the delivery of infrastructure as a service (IaaS), platform as a service (PaaS) or software as a service (SaaS).

Microsoft, Amazon (AWS) and Google (Public Cloud Providers) all have their own long term strategies to capture market share and all three of them have stated that we are at the very beginning of a long journey to full cloud adoption. All of these companies will require channel partners to go to market.

iomart is well placed to strengthen its position around that very complexity as customers look to find the best way forward for their own needs, whether that be private infrastructure in a datacentre of their choice, Public Cloud infrastructure or more likely a mixture of the two combined with legacy on-premise infrastructure. The effective management of all these is the opportunity for iomart which we would collectively term the Hybrid Cloud.

iomart is investing in the relationships and skills to help customers make an informed choice across the cloud spectrum and to help them manage these environments moving forward.

Acquisitions

We again augmented our organic growth through the acquisition of ServerSpace in December 2014. This has performed well over the period and integration is well underway.

We have just announced the acquisition of Systems Up Limited ("SystemsUp") on 5 June 2015. SystemsUp has gained a reputation in the cloud market for expertise across a wide range of cloud products and services, with an emphasis on Public Cloud consultancy. We believe the skills and experience we have acquired will accelerate our progress in becoming credible suppliers of Hybrid Cloud to ensure we can make the 'best fit' recommendation for our customers along with the subsequent deployment and management of their ever more complex cloud environments.

We continue to look for businesses that fit our acquisition criteria with a view to making further acquisitions in the coming year.

Operational Review

Whilst all of our activities involve the provision of services from common infrastructure we are organised into two operating segments.

Hosting

Our Hosting segment continued to perform well over the year, delivering an overall revenue growth rate of 23% and a satisfactory organic growth rate of 9% whilst increasing adjusted EBITDA margins from 48.6% to 50.0%.

We provide a wide range of managed hosting services to both SMEs and corporate customers. All our solutions are delivered from our network of datacentres.

The more complex managed hosting solutions are delivered by iomart Hosting and customers typically pay for these services on a monthly basis on contracts ranging between one and three years in length. These solutions are provided to a wide range of customers, all of whom are at various stages of development and over the year we have seen some casualties amongst our base as customers experience funding difficulties, drop out of markets or become acquired and, as a result, are integrated elsewhere. All of which has resulted in some additional customer churn and some pricing pressure at contract renewal which, in turn, has adversely impacted our organic growth in the segment though we are still pleased with the level of growth achieved over the year. This area of our activity is the one which has the greatest opportunity arising out the Hybrid Cloud. However, the choice of direction to an adopter of Cloud is much more complex than before and thus we will require to become Hybrid Cloud Experts, especially in the consultation process an organisation will go through before making a final choice. We believe the acquisition of SystemsUp will provide us with a strong platform from which to attack the Hybrid Cloud opportunity.

We address the dedicated physical server market, or bare metal as it is becoming known, through our RapidSwitch and Redstation operations largely through online marketing. Melbourne delivers complex managed hosting solutions and provides us with a strong presence in the North West of England with a particular emphasis on the creative sector. Backup Technology provides enterprise class cloud backup and business continuity services. iomart Cloud Services provides a range of Cloud products, mainly through channel partners and this unit also provides Cloud services in the USA, following on from our investment in cloud infrastructure and backup assets in that region during the year. All these business units use common infrastructure and processes but there are different dynamics in each customer base.

Revenues in this segment have grown by 23% to GBP55.0m (2014: GBP44.7m) partly as a result of the continued organic growth and as a result of acquisitions.

Easyspace

The Easyspace segment has performed as expected over the year.

Our activities within this segment provide a range of products to the micro and SME markets including domain names, shared, dedicated and virtual servers and email services.

As anticipated, revenues of GBP10.8m (2014: GBP11.0m) have remained around the same level as in the previous year, and with the benefit of delivering strong levels of cash for the Group.

Trading Results

Revenue

Revenues for the year grew by 18% to GBP65.8m (2014: GBP55.6m) through the combination of continued organic growth and the impact of acquisitions.

Our Hosting segment grew revenues by 23% to GBP55.0m (2014: GBP44.7m). This growth was helped by a full year contribution from Redstation and Backup Technology both of which we acquired in September 2013 and ServerSpace which was acquired in December 2014. The growth in the Hosting segment revenues excluding the impact of acquisitions was 9%.

Revenues within the Easyspace segment of GBP10.8m (2014: GBP11.0m) were close to the level of the previous year showing a very modest 2% decrease.

We continue to have good revenue visibility and high levels of recurring revenue. With our larger customers we have multi-year contracts for the provision of complex managed hosting solutions. Many of our smaller customers pay in advance for the provision of hosting services resulting in a substantial sum of deferred revenue which we then recognise during the period over which we provide our services.

Gross Margin

Our gross profit for the year was GBP44.3m (2014: GBP37.8m) and this increased as a result of the additional revenues we generated. In percentage terms we maintained our margin at 67.4% (2014: 68.0%) with both operating segments maintaining their respective percentage margins.

Adjusted EBITDA

The adjusted EBITDA for the year was GBP29.1m (2014: GBP23.6m) an increase of 23%. Our percentage adjusted EBITDA margin has also significantly improved to 44.2% (2014: 42.5%). The Hosting segment increased both its absolute and relative margin over the period whilst the Easyspace segment performed very much in line with the previous year.

The Hosting segment's adjusted EBITDA was GBP27.5m (2014: GBP21.7m), an increase of 26.7%. In percentage terms the adjusted EBITDA margin has improved to 50.0% (2014: 48.6%). This greatly improved performance is a direct result of the additional gross margin delivered by the increase in sales revenue from the Hosting segment offset by an increase in administrative expenses. Administrative expenses have increased principally due to the impact of the acquisitions made in the period and the full impact of the acquisitions made in the previous period. The inclusion of Redstation and Backup Technology for the full year has contributed to the improvement in the adjusted EBITDA in both absolute terms and percentage terms. The contribution from ServerSpace since its acquisition in December has contributed to the level of absolute margin improvement.

The Easyspace segment's adjusted EBITDA was GBP4.9m (2014: GBP5.0m) which was slightly less than in the previous year. In percentage terms the adjusted EBITDA margin has improved slightly to 45.5% (2014: 45.2%) due to careful control of costs.

Group overheads, which are not allocated to segments, include the cost of the Board, the running costs of the headquarters in Glasgow, Group marketing, human resource, finance and design functions and legal and professional fees for the year. These overhead costs have increased to GBP3.3m (2014: GBP3.0m) mainly due to increased payroll and staff related costs.

Adjusted profit before tax

Depreciation charges of GBP10.1m (2014: GBP7.2m) have increased largely as a consequence of the full year effect of acquisitions made in the previous year, the impact of the acquisition of ServerSpace in this financial year, as a result of charges for the equipment bought to provide services to the additional Hosting segment customers and charges in respect of the fit out of our Maidenhead datacentre which was completed at the start of this financial year.

The charge for amortisation of intangibles, excluding amortisation of intangible assets resulting from acquisitions ("amortisation of acquired intangible assets") of GBP1.0m (2014: GBP0.7m) has increased over the year as a consequence of the full year impact of the acquisition of Backup Technology which was acquired during the previous financial year and also due to the charge resulting from an increase in the level of capitalised development costs.

Finance income in the period was GBPnil (2014: GBP0.1m). Finance costs of GBP1.3m (2014: GBP1.2m), excluding the mark to market adjustment in respect of interest swaps on the Company's loans and in the previous year the accelerated write off of arrangement fees on the early repayment of bank facilities, remained static over the period as our level of net borrowings remained at a similar level over the period.

After deducting the charges for depreciation, amortisation, excluding the charges for the amortisation of acquired intangible assets, and finance costs, excluding mark to market adjustments on the interest rate swap and in the previous year the accelerated write off of arrangement fees on the early repayment of the bank facilities, and crediting the finance income from the adjusted EBITDA, the Group's adjusted profit before tax was GBP16.6m (2014: GBP14.6m) an increase of 14%.

The adjusted profit before tax margin for the year was 25% (2014: 26%). This modest reduction is largely due to the improvement of 1.7% in the adjusted EBITDA margin over the year offset by the increase in depreciation charges as a percentage of revenue of 2.5%. That relative increase in the depreciation charge is mainly a consequence of the mix of sales revenue within our Hosting segment over the year, including the impact of a full year contribution from both Redstation and Backup Technology, and the commencement of depreciation charges on the Maidenhead datacentre which was completed early in this financial year

Profit before tax

The measure of adjusted profit before tax is a non-statutory measure which is commonly used to analyse the performance of companies particularly where M&A activity forms a significant part of their activities.

A reconciliation of adjusted profit before tax to reported profit before tax is shown below:

 
 Reconciliation of adjusted profit             2015       2014 
  before tax to profit before tax           GBP'000    GBP'000 
 Adjusted profit before tax                  16,613     14,612 
 Less: Amortisation of acquired 
  intangible assets                         (4,368)    (3,093) 
 Less: Acquisition costs                      (526)      (374) 
 Less: Share based payments                   (809)    (1,257) 
 Less: Mark to market adjustment 
  on interest rate swaps                      (125)       (20) 
 Less: Accelerated write off of 
  arrangement fees on early repayment 
  of bank facilities                              -      (153) 
 Profit before tax                           10,785      9,715 
----------------------------------------  ---------  --------- 
 

The adjusting items are: charges for the amortisation of acquired intangible assets of GBP4.4m (2014: GBP3.1m) which have increased substantially as a result of the acquisition made in the year and the full year effect of acquisitions made in previous years; costs of GBP0.5m (2014: GBP0.4m) as a result of acquisition costs; share based payment charges in the period of GBP0.8m (2014: GBP1.3m) which have decreased substantially as the charge in respect of share options granted in previous periods comes to an end; a mark to market adjustment in respect of interest rate swaps on the Company's loans of GBP0.12m (2014: GBP0.02m) and the accelerated write off of arrangement fees on the early repayment of bank facilities during the year of GBPnil (2014: GBP0.15m).

After deducting charges for the amortisation of acquired intangible assets; acquisition costs; share based payments; mark to market adjustments in respect of interest rate swaps and in the previous year the accelerated write off of arrangement fees on the early repayment of bank facilities during the year from the adjusted profit before tax; the reported profit before tax was GBP10.8m (2014: GBP9.7m) an increase of 11%. In percentage terms the profit before tax margin was 16% (2014: 17%) with the reduction due to the same reasons as the adjusted profit before tax percentage margin reduction together with increased amortisation of acquired intangible assets charges offset by reduced shared based payment charges.

Taxation

There is a tax charge for the year of GBP1.9m (2014: GBP2.0m). The tax charge for the year is made up of a corporation tax charge of GBP2.7m (2014: GBP2.5m) with a deferred tax credit of GBP0.8m (2014: credit GBP0.5m). At the year end, the Group has unused tax losses of GBP1.2m (2014: GBP4.0m) available for offset against future profits, of which all have been provided for within deferred tax.

Profit for the year from total operations

After deducting the tax charge for the year from the profit before tax the Group has recorded a profit for the year from total operations of GBP8.9m (2014: GBP7.7m) an increase of 15%.

Earnings per share

Adjusted diluted earnings per share is based on profit for the year attributed to ordinary shareholders before share based payment charges, amortisation charges of acquired intangible assets, mark to market adjustments in respect of interest rate swaps, the accelerated write off of arrangement fees on the early repayment of bank facilities in the previous year, acquisition costs and the tax effect of these items was 12.63p (2014: 10.85p) an increase of 16%.

The measure of adjusted diluted earnings per share as described above is a non-statutory measure which is commonly used to analyse the performance of companies particularly where M&A activity forms a significant part of their activities.

The calculation of both adjusted earnings per share and basic earnings per share is included at note 6.

Basic earnings per share from continuing operations was 8.34p (2014: 7.30p), an increase of 14% over the year.

Acquisitions

On 3 December 2014 the Company acquired ServerSpace for a maximum consideration of GBP4.2m; on a no cash no debt, normalised working capital basis. At completion an initial payment of GBP2.6m in cash was made. No payment was due in respect of the additional debt assumed, cash acquired and normalised working capital position of the company at completion. An additional sum is due related to the profitability of ServerSpace in the period to September 2015 and the estimated amount to be paid in this regard is GBP1.6m, which is also the maximum amount which could be due. Payment of this sum is expected to be made before the end of the 2015 calendar year.

On 5 June 2015 the Company acquired the entire share capital of SystemsUp on a no debt, no cash, normalised working capital basis. At completion an initial payment of GBP9m in cash was made and in addition an amount of GBP0.5m was paid as an interim settlement of the expected amount due in respect of the no debt, no cash, normalised working capital adjustment. A further sum is contingent on a measure revenue for the year to 31 March 2016 which is expected to be paid in either May or June 2016. The potential contingent consideration payable has been initially estimated to be in the region of GBP1.0m to GBP3.5m.

Cash flow and net cash

Net cash flows from operating activities

The Group continued to generate high levels of operating cash over the year. Cash flow from operations was GBP27.2m (2014: GBP24.0m) with the significant increase of 13% over the previous year's level largely due to the improvement in adjusted EBITDA. After deducting payments for corporation tax of GBP3.2m (2014: GBP2.3m) the net cash flow from operating activities was GBP24.0m (2014: GBP21.7m).

Cash flow from investing activities

In line with our strategy of accelerating our growth by acquisition the Group continued to incur substantial sums on investing activities, spending a total of GBP15.8m (2014: GBP31.5m) in the period. Of this amount, GBP2.4m (2014: GBP19.0m), was incurred in relation to acquisition activities described above. In addition the Group incurred expenditure of GBP1.3m (2014: GBP0.1m) in respect of contingent consideration due on the acquisition of Redstation.

The Group continues to invest in property, plant and equipment through expenditure on datacentres and on equipment required to provide managed services to both its existing and new customers. In addition the Group invested in cloud infrastructure and backup assets in the USA during the year. As a result the Group spent GBP10.7m (2014: GBP11.7m) on assets, net of related finance lease drawdown, trade creditor movements and non-cash reinstatement provisions.

Expenditure was also incurred on development costs of GBP1.0m (2014: GBP0.6m) and on intangible assets of GBP0.4m (2014: GBPnil).

Cash flow from financing activities

There was net cash spent on financing activities of GBP12.9m (2014: GBP11.4m cash generated). The Company's borrowing facilities were restructured in the period with a term loan of GBP13.5m being repaid and an additional revolving credit facility of GBP13.5m being drawn down (2014: GBP37.5m drawdown). In addition further bank loan repayments of GBP8.5m were made resulting in total repayments of GBP22.0m (2014: GBP16.5m) in the year. We repaid borrowings on acquisitions of GBPnil (2014: GBP5.7m). We received GBPnil (2014: GBP0.2m) from the issue of shares as a result of the exercise of options by employees. We also made a dividend payment of GBP1.9m (2014: GBP1.5m) and incurred finance costs of GBP1.3m (2014: GBP1.2m).

Net cash flow

As a consequence, our overall cash expenditure during the year was GBP4.7m (2014: GBP1.6m cash generated) which resulted in cash and cash equivalent balances at the end of the year of GBP8.3m (2014: GBP13.0m). After recognising bank loans of GBP21.5m (2014: GBP30.0m) and finance lease obligations of GBP2.2m (2014: GBP2.8m) net debt balances at the end of the period stood at GBP15.4m (2014: GBP19.8m) a level the Board is comfortable with given the strong cash generation of the Group.

Financial position

The Group is now in a position where it is generating substantial amounts of operating cash. The generation of that cash flow together with the committed bank loan facility for acquisitions and finance lease facilities which are available to fund capital expenditure, means that the Group has the liquidity it requires to continue its growth through both organic and acquisitive means.

Current trading and outlook

Trading since the year end remains encouraging and in line with our expectations.

We are working hard to ensure we remain at the leading edge in terms of the skill sets and experience to provide an ever more complex set of services to our customers and are confident of our abilities to do so, reinforced by the acquisition of SystemsUp in recent days.

We are well positioned for further significant growth.

I look forward, once again, with confidence to the year ahead.

Angus MacSween

Chief Executive Officer

8 June 2015

Consolidated Statement of Comprehensive Income

Year ended 31 March 2015

 
                                                    2015       2014 
                                         Note    GBP'000    GBP'000 
 Revenue                                          65,797     55,618 
 
 Cost of sales                                  (21,477)   (17,794) 
                                               ---------  --------- 
 
 Gross profit                                     44,320     37,824 
 
 Administrative expenses                        (32,121)   (26,767) 
--------------------------------------  -----  ---------  --------- 
 
 Operating profit                                 12,199     11,057 
 
 Analysed as: 
 Earnings before interest, 
  tax, depreciation, amortisation, 
  acquisition costs and share 
  based payments                                  29,053     23,611 
 Share based payments                              (809)    (1,257) 
 Acquisition costs                                 (526)      (374) 
 Depreciation                                   (10,142)    (7,170) 
 Amortisation - acquired intangible 
  assets                                         (4,368)    (3,093) 
 Amortisation - other intangible 
  assets                                         (1,009)      (660) 
--------------------------------------  -----  ---------  --------- 
 
 Finance income                                       45         68 
 Finance costs                                   (1,459)    (1,410) 
                                               ---------  --------- 
 
 Profit before taxation                           10,785      9,715 
 
 Taxation                                 4      (1,890)    (1,995) 
                                               ---------  --------- 
 
 Profit for the year from 
  total operations                                 8,895      7,720 
 
 
 Other comprehensive income 
 
 Amounts which may be reclassified 
  to profit or loss 
 Currency translation differences                   (49)          3 
--------------------------------------  -----  ---------  --------- 
 Other comprehensive income 
  for the year                                      (49)          3 
--------------------------------------  -----  ---------  --------- 
 
 Total comprehensive income 
  for the year                                     8,846      7,723 
 
 
 Attributable to equity holders 
  of the parent                                    8,846      7,723 
 
 
 
 Basic and diluted earnings 
  per share 
 
 Total operations 
                                          6         8.34       7.30 
 Basic earnings per share                              p          p 
                                          6         8.24       7.23 
 Diluted earnings per share                            p          p 
--------------------------------------  -----  ---------  --------- 
 

Consolidated Statement of Financial Position

As at 31 March 2015

 
                                               2015       2014 
                                    Note    GBP'000    GBP'000 
--------------------------------   -----  ---------  --------- 
 ASSETS 
 Non-current assets 
 Intangible assets - goodwill        8       47,342     44,879 
 Intangible assets - other           8       19,041     19,488 
 Lease deposits                               2,416      2,416 
 Property, plant and equipment       9       34,846     32,533 
                                            103,645     99,316 
 Current assets 
 Cash and cash equivalents                    8,347     13,025 
 Trade and other receivables                 11,389      7,696 
                                             19,736     20,721 
 
 Total assets                               123,381    120,037 
 
 LIABILITIES 
 Non-current liabilities 
 Non-current borrowings              10     (1,346)   (13,716) 
 Trade and other payables                     (703)          - 
 Provisions                                 (2,440)    (1,566) 
 Deferred tax                        5      (2,087)    (2,443) 
---------------------------------  -----  ---------  --------- 
                                            (6,576)   (17,725) 
 Current liabilities 
 Contingent consideration 
  due on acquisitions                12     (1,650)    (1,271) 
 Trade and other payables                  (18,680)   (15,158) 
 Current income tax liabilities             (1,401)    (1,868) 
 Current borrowings                  10    (22,395)   (19,128) 
                                           (44,126)   (37,425) 
 
 Total liabilities                         (50,702)   (55,150) 
 
 Net assets                                  72,679     64,887 
---------------------------------  -----  ---------  --------- 
 
 EQUITY 
 Share capital                                1,078      1,078 
 Own shares                                   (538)      (556) 
 Capital redemption reserve                   1,200      1,200 
 Share premium                               21,067     21,067 
 Merger reserve                               4,983      4,983 
 Foreign currency translation 
  reserve                                      (47)          2 
 Retained earnings                           44,936     37,113 
---------------------------------  -----  ---------  --------- 
  Total equity                               72,679     64,887 
---------------------------------  -----  ---------  --------- 
 

Consolidated Statement of Cash Flows

Year ended 31 March 2015

 
                                                   2015       2014 
                                        Note    GBP'000    GBP'000 
 
Profit before taxation                           10,785      9,715 
Finance costs - net                               1,414      1,342 
Depreciation                            9        10,142      7,170 
Amortisation                            8         5,377      3,753 
Share based payments                                809      1,257 
Movement in trade receivables                   (3,277)        250 
Movement in trade payables                        1,956        503 
------------------------------------  ------  ---------  --------- 
Cash flow from operations                        27,206     23,990 
Taxation paid                                   (3,212)    (2,277) 
Net cash flow from operating 
 activities                                      23,994     21,713 
 
Cash flow from investing 
 activities 
Purchase of property, 
 plant and equipment                    9      (10,683)   (11,651) 
Capitalisation of development 
 costs                                          (1,041)      (557) 
Purchase of intangible 
 assets                                 8         (367)       (24) 
Proceeds on disposal of 
 property, plant and equipment                        -         22 
Payments for current period 
 acquisitions net of cash 
 acquired                                       (2,445)   (19,016) 
Contingent consideration 
 paid on prior period acquisition               (1,271)      (125) 
Deferred consideration 
 paid on prior period acquisition                     -      (201) 
Finance income received                              33         91 
Net cash used in investing 
 activities                                    (15,774)   (31,461) 
 
Cash flow from financing 
 activities 
Issue of shares                                      13        154 
Draw down of bank loans                          13,500     37,500 
Repayment of finance leases                     (1,245)    (1,384) 
Repayment of bank loans                        (22,000)   (16,503) 
Repayment of borrowings 
 on acquisition of business                           -    (5,731) 
Finance costs paid                              (1,299)    (1,172) 
Dividends paid                                  (1,867)    (1,483) 
Net cash received from 
 financing activities                          (12,898)     11,381 
 
Net (decrease)/increase 
 in cash and cash equivalents                   (4,678)      1,633 
 
Cash and cash equivalents 
 at the beginning of the 
 year                                            13,025     11,392 
-----------------------------------   ------  ---------  --------- 
 
Cash and cash equivalents at the 
 end of the year                                  8,347     13,025 
 
 

Consolidated Statement of Changes in Equity

Year ended 31 March 2015

 
                                                         Foreign 
                                   Own         Own      currency       Capital      Share 
   Changes in          Share    shares      shares   translation    redemption    premium     Merger    Retained 
   equity            capital       EBT    Treasury       reserve       reserve    account    reserve    earnings     Total 
                     GBP'000   GBP'000     GBP'000       GBP'000       GBP'000    GBP'000    GBP'000     GBP'000   GBP'000 
 ----------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Balance at 
  1 April 2013         1,058      (70)       (506)           (1)         1,200     20,936          -      29,599    52,216 
 
 Profit in 
  the year                 -         -           -             -             -          -          -       7,720     7,720 
 Currency 
  translation 
  differences              -         -           -             3             -          -          -           -         3 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  comprehensive 
  income                   -         -           -             3             -          -          -       7,720     7,723 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Dividends 
  - final (paid)           -         -           -             -             -          -          -     (1,483)   (1,483) 
 Share based 
  payments                 -         -           -             -             -          -          -       1,257     1,257 
 Deferred tax 
  on share based 
  payments                 -         -           -             -             -          -          -          19        19 
 Issue of own 
  shares for 
  option 
  redemption               -         -          20             -             -          -          -           1        21 
 Issue of new 
  shares for 
  option 
  redemption               3         -           -             -             -        131          -           -       134 
 Issue of new 
  shares for 
  business 
  acquisition             17         -           -             -             -          -      4,983           -     5,000 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  transactions 
  with owners             20         -          20             -             -        131      4,983       (206)     4,948 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Balance at 
  31 March 2014        1,078      (70)       (486)             2         1,200     21,067      4,983      37,113    64,887 
----------------   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 
 Profit in 
  the year                 -         -           -             -             -          -          -       8,895     8,895 
 Currency 
  translation 
  differences              -         -           -          (49)             -          -          -           -      (49) 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  comprehensive 
  income                   -         -           -          (49)             -          -          -       8,895     8,846 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Dividends 
  - final (paid)           -         -           -             -             -          -          -     (1,867)   (1,867) 
 Share based 
  payments                 -         -           -             -             -          -          -         809       809 
 Deferred tax 
  on share based 
  payments                 -         -           -             -             -          -          -        (19)      (19) 
 Issue of own 
  shares for 
  option 
  redemption               -         -          18             -             -          -          -           5        23 
 Total 
  transactions 
  with owners              -         -          18             -             -          -          -     (1,072)   (1,054) 
                   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 
 Balance at 
  31 March 2015        1,078      (70)       (468)          (47)         1,200     21,067      4,983      44,936    72,679 
----------------   ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 

Notes to the Yearly Financial Information

Year ended 31 March 2015

   1.         GENERAL INFORMATION 

iomart Group plc is a company incorporated and domiciled in Scotland. The company has a primary listing on the AIM stock exchange. The address of its registered office is Lister Pavilion, Kelvin Campus, West of Scotland Science Park, Glasgow G20 0SP.

   2.         BASIS OF PREPARATION 

These financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared under the historical cost convention.

The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 March 2015 and 31 March 2014 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2014 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The financial information for the year ended 31 March 2015 is derived from the statutory accounts for that year which were approved by the Directors on 8 June 2015. The statutory accounts for the year ended 31 March 2015 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

   3.         SEGMENTAL ANALYSIS 

The chief operating decision-maker has been identified as the Chief Executive Officer ("CEO") of the Company. The Group has two operating segments and the CEO reviews the Group's internal reporting which recognises these two segments in order to assess performance and to allocate resources. The Group has determined its reportable segments which are also its operating segments based on these reports.

The Group currently has two operating and reportable segments.

-- Easyspace - this segment provides a range of shared hosting and domain registration services to micro and SME companies.

-- Hosting - this segment provides managed hosting facilities and services, through a network of owned datacentres, to the larger SME and corporate markets. The segment uses several routes to market and provides managed hosting services through iomart Hosting, RapidSwitch, Melbourne, iomart Cloud Services. Redstation and Backup Technology. ServerSpace was acquired during the year and has been reported as part of the Hosting segment since acquisition.

Information regarding the operation of the reportable segments is included below. The CEO assesses the performance of the operating segments based on revenue and a measure of Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) before any allocation of Group overheads, charges for share based payments or costs associated with acquisitions. This segment EBITDA is used to measure performance as the CEO believes that such information is the most relevant in evaluating the results of the segment.

The Group's EBITDA for the year has been calculated after deducting Group overheads from the EBITDA of the two segments as reported internally. Group overheads include the cost of the Board, all the costs of running the premises in Glasgow, the Group marketing, human resource, finance and design functions and legal and professional fees.

The segment information is prepared using accounting policies consistent with those of the Group as a whole.

The assets and liabilities of the Group are not reviewed by the chief operating decision-maker on a segment basis. Therefore none of the Group's assets and liabilities are segmental assets and liabilities and are all unallocated for segmental disclosure purposes. For that reason the Group has not disclosed details of segmental assets and liabilities.

All segments are continuing operations. No customer accounts for more than 10% of external revenues. Inter-segment transactions are accounted for using an arms-length commercial basis.

Operating Segments

Revenue by Operating Segment

 
                          2015                            2014 
             ------------------------------  ------------------------------ 
              External   Internal     Total   External   Internal     Total 
               GBP'000    GBP'000   GBP'000    GBP'000    GBP'000   GBP'000 
-----------  ---------  ---------  --------  ---------  ---------  -------- 
 Easyspace      10,782          -    10,782     10,959          -    10,959 
 Hosting        55,015        950    55,965     44,659        932    45,591 
             ---------  ---------  --------  ---------  ---------  -------- 
                65,797        950    66,747     55,618        932    56,550 
-----------  ---------  ---------  --------  ---------  ---------  -------- 
 

Geographical Information

In presenting the consolidated information on a geographical basis, revenue is based on the geographical location of customers. The United Kingdom is the place of domicile of the parent company, iomart Group plc. All of the Group's revenue originates from the United Kingdom.

Analysis of Revenue by Destination

 
                                   2015      2014 
                                GBP'000   GBP'000 
-------------------------      --------  -------- 
 United Kingdom                  54,253    48,005 
 Rest of the 
  World                          11,544     7,613 
                               --------  -------- 
 Revenue from operations         65,797    55,618 
--------------------------     --------  -------- 
 

Profit by Operating Segment

 
                                         2015                                             2014 
                   -----------------------------------------------  ----------------------------------------------- 
                          EBITDA    Depreciation,                          EBITDA    Depreciation, 
                          before    amortisation,                          before    amortisation, 
                     acquisition      acquisition                     acquisition      acquisition 
                           costs            costs                           costs            costs 
                       and share        and share                       and share        and share 
                           based            based        Operating          based            based        Operating 
                        payments         payments    profit/(loss)       payments         payments    profit/(loss) 
                         GBP'000          GBP'000          GBP'000        GBP'000          GBP'000          GBP'000 
-----------------  -------------  ---------------  ---------------  -------------  ---------------  --------------- 
 Easyspace                 4,905            (416)            4,489          4,953            (605)            4,348 
 Hosting                  27,481         (15,103)           12,378         21,700         (10,318)           11,382 
 Group overheads         (3,333)                -          (3,333)        (3,042)                -          (3,042) 
 Acquisition 
  costs                        -            (526)            (526)              -            (374)            (374) 
 Share based 
  payments                     -            (809)            (809)              -          (1,257)          (1,257) 
                   -------------  ---------------  ---------------  -------------  ---------------  --------------- 
 Profit before 
  tax 
  and interest            29,053         (16,854)           12,199         23,611         (12,554)           11,057 
 Group interest 
  and tax                                                  (3,304)                                          (3,337) 
                   -------------  ---------------  ---------------  -------------  ---------------  --------------- 
 Profit for 
  the year                29,053         (16,854)            8,895         23,611         (12,554)            7,720 
-----------------  -------------  ---------------  ---------------  -------------  ---------------  --------------- 
 

Group overheads, acquisition costs, share based payments, interest and tax are not allocated to segments.

   4.         TAXATION 
 
                                                2015      2014 
                                             GBP'000   GBP'000 
 ---------------------------------------    --------  -------- 
 
  Tax charge for the year                    (2,782)   (3,002) 
  Adjustment relating to prior 
   years                                          36       480 
----------------------------------------    --------  -------- 
  Total current taxation charge              (2,746)   (2,522) 
 
  Origination and reversal 
   of temporary differences                      871       486 
  Effect of different statutory 
  tax rates of overseas jurisdictions             14         - 
  Effect of changes in tax 
   rates                                        (29)        41 
----------------------------------------    --------  -------- 
  Total deferred taxation 
   credit                                        856       527 
 
  Total taxation charge                      (1,890)   (1,995) 
----------------------------------------    --------  -------- 
 

The Group has a deferred tax asset which has been recognised in respect of tax losses within one subsidiary company, which has generated taxable profits and is expected to continue to do so.

The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:

 
                                                  2015      2014 
                                               GBP'000   GBP'000 
 -----------------------------------------    --------  -------- 
 
  Profit before tax                             10,785     9,715 
------------------------------------------    --------  -------- 
 
  Tax charge @ 21% (2014 - 23%)                  2,265     2,234 
 
  Expenses disallowed for tax purposes              71       263 
  Non-taxable income                               (6)         - 
  Adjustments in respect of prior 
   years                                          (36)     (480) 
  Effect of different statutory 
   tax rates of overseas jurisdictions            (14)         - 
  Movement in deferred tax relating 
   to changes in tax rates                          29      (41) 
  Effect of research and development 
   tax reliefs                                   (395)     (350) 
  Tax effect of share based remuneration           155       142 
  Movement in unprovided deferred 
   tax related to property, plant 
   and equipment                                     -       103 
  Movement in deferred tax relating 
   to prior periods                              (179)       124 
 
  Taxation charge for the year                   1,890     1,995 
------------------------------------------    --------  -------- 
 
   5.         DEFERRED TAX 

The Group recognised deferred tax assets and liabilities as follows:

 
                                             2015                                2014 
                              ----------------------------------  ---------------------------------- 
                                     Deferred           Deferred         Deferred           Deferred 
                               tax Recognised   tax Unrecognised   tax Recognised   tax Unrecognised 
                                      GBP'000            GBP'000          GBP'000            GBP'000 
----------------------------  ---------------  -----------------  ---------------  ----------------- 
 
 Tax losses carried forward               289                  -              831                  - 
 Share based remuneration                 575                  -              600                  - 
 Capital allowances timing 
  differences                             873                  -              414                  - 
 Deferred tax on acquired 
  assets with no capital 
  allowances                            (605)                  -            (765)                  - 
 Deferred tax on customer 
  relationships                       (3,219)                  -          (3,523)                  - 
----------------------------  ---------------  -----------------  ---------------  ----------------- 
 Deferred tax liability               (2,087)                  -          (2,443)                  - 
----------------------------  ---------------  -----------------  ---------------  ----------------- 
 

At the year end, the Group has unused tax losses of GBP1.2m (2014: GBP4.0m) available for offset against future profits. A deferred tax asset has been recognised in respect of GBP1.2m (2014: GBP4.0m) of such losses as these losses are expected to be used up by taxable profits by the end of the period covered by future projections.

The movement in the deferred tax account during the year was:

 
                                                                     Deferred 
                                                         Capital       tax on 
                       Tax losses                     allowances     acquired 
                          carried           Share         timing       assets         Customer 
                          forward           based    differences      with no    relationships      Total 
                          GBP'000    remuneration        GBP'000      capital          GBP'000    GBP'000 
                                          GBP'000                  allowances 
                                                                      GBP'000 
-------------------  ------------  --------------  -------------  -----------  ---------------  --------- 
 
Balance at 
 1 April 2013           1,167           681             282          (949)         (1,649)        (468) 
Acquired on 
 acquisition 
 of subsidiary            -              -              215            -           (2,736)       (2,521) 
Credited to 
 equity                   -              19              -             -              -            19 
(Charged)/credited 
 to statement 
 of comprehensive 
 income                 (222)           (41)           (64)           104            709           486 
Effect of 
 changes in 
 tax rates              (114)           (59)           (19)           80             153           41 
-------------------  ------------  --------------  -------------  -----------  ---------------  --------- 
Balance at 
 1 April 2014            831            600             414          (765)         (3,523)       (2,443) 
Acquired on 
 acquisition 
 of subsidiary            89             -             (13)            -            (557)         (481) 
Debited to 
 equity                   -             (19)             -             -              -           (19) 
(Charged)/credited 
 to statement 
 of comprehensive 
 income                 (673)            2              550           131            861           871 
Effect of 
 different 
 tax rates 
 of overseas 
 jurisdictions            44             -             (30)            -              -            14 
Effect of 
 changes in 
 tax rates               (2)            (8)            (48)           29              -           (29) 
Balance at 
 31 March 2015           289            575             873          (605)         (3,219)       (2,087) 
-------------------  ------------  --------------  -------------  -----------  ---------------  --------- 
 
   6.         EARNINGS PER SHARE 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, after deducting any own shares held by an Employee Benefit Trust in a Joint Share Ownership Plan ("JSOP"). Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the total of the weighted average number of ordinary shares in issue during the year, after deducting any own shares (JSOP), and adjusting for the dilutive potential ordinary shares relating to share options, including the dilutive effect of JSOP shares that have vested.

 
Total operations                                2015      2014 
                                             GBP'000   GBP'000 
--------------------------------------      --------  -------- 
 Profit for the financial 
  year and basic earnings 
  attributed to ordinary shareholders          8,895     7,720 
----------------------------------------    --------  -------- 
 
                                                  No        No 
 Weighted average number 
  of ordinary shares:                            000       000 
 
 Called up, allotted and 
  fully paid at start of year                107,803   105,760 
 Own shares held in Treasury                   (971)   (1,016) 
 Shares held by Employee 
  Benefit Trust                                (141)     (141) 
 New shares issued during 
  year                                             -     1,101 
----------------------------------------    --------  -------- 
 Weighted average number 
  of ordinary shares - basic                 106,691   105,704 
 
 Dilutive impact of share 
  options                                      1,236     1,005 
 
 Weighted average number 
  of ordinary shares - diluted               107,927   106,709 
---------------------------------------     --------  -------- 
 
 Basic earnings per share                       8.34      7.30 
                                                   p         p 
 Diluted earnings per share                     8.24      7.23 
                                                   p         p 
-----------------------------------------   --------  -------- 
 
 
 
 Adjusted earnings                                           2015      2014 
  per share                                               GBP'000   GBP'000 
 
 Profit for the financial 
  year and basic earnings 
  attributed to ordinary shareholders                       8,895     7,720 
 
   *    Amortisation of acquired intangible assets          4,368     3,093 
 
   *    Acquisition costs                                     526       374 
 
   *    Shared based payments                                 809     1,257 
 
   *    Mark to market interest adjustment                    125        20 
 
   *    Accelerated write off of arrangement fees               -       153 
 
   *    Tax impact of adjusted items                      (1,093)   (1,039) 
 Adjusted profit for the 
  financial year and adjusted 
  earnings attributed to 
  ordinary shareholders                                    13,630    11,578 
----------------------------------------------------     --------  -------- 
 
 Adjusted basic earnings                                    12.77     10.95 
  per share                                                     p         p 
 Adjusted diluted earnings per                              12.63     10.85 
  share                                                         p         p 
------------------------------------------------------   --------  -------- 
 
 
   7.         ACQUISITIONS 

ServerSpace Limited

The Group acquired 100% of the issued share capital of ServerSpace Limited ("ServerSpace") on 3 December 2014.

ServerSpace is a London based provider of managed hosting services to over 300 customers. The acquisition is in line with the Group's strategy to grow its hosting operations both organically and by acquisition.

During the current period the Group incurred GBP116,000 of third party acquisition related costs in respect of this acquisition. These expenses are included in administrative expenses in the Group's consolidated statement of comprehensive income for the period ended 31 March 2015.

The following table summarises the consideration to acquire ServerSpace and the provisional amounts of identified assets acquired and liabilities assumed at the acquisition date:

 
                                              GBP'000 
-------------------------------------------  -------- 
 Recognised amounts of net assets acquired 
  and liabilities assumed: 
 Cash and cash equivalents                        155 
 Trade and other receivables                      376 
 Property, plant and equipment                    453 
 Intangible assets                              2,778 
 Trade and other payables                     (1,458) 
 Current borrowings                              (13) 
 Non-current borrowings                          (23) 
 Deferred tax liability                         (481) 
 Identifiable net assets                        1,787 
 Goodwill                                       2,463 
-------------------------------------------  -------- 
 Total consideration                            4,250 
-------------------------------------------  -------- 
 
 Satisfied by: 
 Cash - paid on acquisition                     2,600 
 Contingent consideration - payable             1,650 
 Total consideration transferred                4,250 
-------------------------------------------  -------- 
 

The recognised amounts of all the net assets acquired and liabilities assumed are provisional.

The share purchase agreement, in respect of the acquisition of ServerSpace, included a provision under which the total consideration payable may have been adjusted by a payment to be made either to or by the Company, depending on the level of cash, debt and working capital shown in an agreed set of accounts (the Completion Accounts) made up to, and as at, the completion date. Following agreement of the Completion Accounts it was agreed by the Company and the former shareholders of ServerSpace that no payment was due either to or by the Company under the terms of this provision. The contingent consideration arrangements require the Company to pay the former shareholders of ServerSpace additional amounts contingent on the completion of the migration of existing customer services to an iomart datacentre ("the Migration Payment") and on the level of profitability and the mix of revenue delivered by ServerSpace in the year ending 30 September 2015 ("the Earn-out Payment").

The potential undiscounted amount of the total payments that the Company could be required to make is between GBPnil and GBP1,650,000. The amount of contingent consideration payable which was recognised as of the acquisition date was GBP1,650,000.

The amount of contingent consideration payable in respect of the Migration Payment is between GBPnil and GBP125,000 and the amount of contingent consideration payable in respect of the Earn-out Payment is between GBPnil and GBP1,650,000. The total contingent consideration payable in respect of the Migration payment and the Earn-out payment is restricted to GBP1,650,000 and, if the total of the two payments would exceed this amount, the Earn-out payment will be reduced by the amount required to reduce the total to GBP1,650,000.

ServerSpace earned revenue of GBP1,003,375 and generated a loss before tax of GBP128,093 in the period since acquisition.

Redstation Limited and Backup Technology Holdings Limited

The fair values of acquired assets and liabilities, including goodwill, previously disclosed as provisional for Redstation Limited and Backup Technology Holdings Limited have been finalised in the current period with no changes to the fair values disclosed in the Annual Report and Accounts 2014.

Pro-forma full year information

The following summary presents the Group as if the business acquired during the year had been acquired on 1 April 2014. The amounts include the results of the acquired business, a charge for interest on the additional debt incurred to finance the acquisition and depreciation and amortisation of the acquired property, plant and equipment and intangible assets recognised on acquisition. The amounts do not include any possible synergies from the acquisition. The information is provided for illustrative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of the future results of the combined companies.

 
                                        Pro-forma 
                                       year ended 
                                    31 March 2015 
-------------------------------  ---------------- 
                                          GBP'000 
-------------------------------   --------------- 
 Revenue                                   67,721 
 
 Profit after tax for the year              8,207 
--------------------------------  --------------- 
 
   8.         INTANGIBLE ASSETS 
 
                                                                                                     Domain 
                        Goodwill     Development          Customer                 Beneficial         names 
                                           costs     relationships                  contracts          & IP 
                                                                      Software                    addresses      Total 
                         GBP'000         GBP'000           GBP'000     GBP'000        GBP'000       GBP'000    GBP'000 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 Cost 
 At 1 April 
  2013                    31,781           2,111             9,644         600             86            31     44,253 
 Additions                     -               -                 -          24              -             -         24 
 Disposals                     -               -                 -        (15)              -             -       (15) 
 Acquired on 
  acquisition 
  of subsidiary           13,098               -            13,335       1,048              -           249     27,730 
 Development 
  cost capitalised             -             557                 -           -              -             -        557 
 At 1 April 
  2014                    44,879           2,668            22,979       1,657             86           280     72,549 
 Additions                     -               -               598         435              -             -      1,033 
 Currency 
  translation 
  differences                  -               -                76          22              -             -         98 
 Acquired on 
  acquisition 
  of subsidiary            2,463               -             2,778           -              -             -      5,241 
 Development 
  cost capitalised             -           1,041                 -           -              -             -      1,041 
 At 31 March 
  2015                    47,342           3,709            26,431       2,114             86           280     79,962 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 
 Accumulated 
  amortisation: 
 At 1 April 
  2013                         -         (1,396)           (2,478)       (534)            (5)          (31)    (4,444) 
 Disposal                      -               -                 -          15              -             -         15 
 Charge for 
  the year                     -           (473)           (3,086)       (156)            (7)          (31)    (3,753) 
 At 1 April 
  2014                         -         (1,869)           (5,564)       (675)           (12)          (62)    (8,182) 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 
 Currency 
  translation 
  differences                  -               -              (20)           -              -             -       (20) 
 Charge for 
  the year                     -           (627)           (4,361)       (328)            (7)          (54)    (5,377) 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 At 31 March 
  2015                         -         (2,496)           (9,945)     (1,003)           (19)         (116)   (13,579) 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 
 Carrying amount: 
 
 At 31 March 
  2015                    47,342           1,213            16,486       1,111             67           164     66,383 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 
 At 31 March 
  2014                    44,879             799            17,415         982             74           218     64,367 
-------------------  -----------  --------------  ----------------  ----------  -------------  ------------  --------- 
 

Of the total additions in the year of GBP1,033,000 (2014: GBP24,000), GBP182,000 (2014: GBPnil) were funded by finance leases, GBP484,000 (2014: GBPnil) was included in trade payables as unpaid invoices at the year end resulting in a net GBP484,000 (2014: GBPnil) movement in trade payables. Consequently, the consolidated statement of cash flows discloses a figure of GBP367,000 (2014: GBP24,000) as the cash outflow in respect of intangible asset additions in the year.

All amortisation and impairment charges are included in the depreciation, amortisation and impairment of non-financial assets classification, which is disclosed as administration expenses in the statement of comprehensive income.

During the year, goodwill was reviewed for impairment in accordance with IAS 36 "Impairment of Assets". No impairment charges (2014: GBPnil) arose as a result of this review. For this review goodwill was allocated to individual Cash Generating Units (CGU) on the basis of the Group's operations. The goodwill acquired in the ServerSpace acquisition has been allocated to the Hosting CGU, as this is the CGU expected to benefit from the business combination.

The carrying value of goodwill by each CGU is as follows:

 
 Cash Generating           2015       2014 
  Units (CGU)           GBP'000    GBP'000 
 Easyspace               17,137     17,137 
 Hosting                 30,205     27,742 
--------------------  ---------  --------- 
                         47,342     44,879 
   -----------------  ---------  --------- 
 
   9.         PROPERTY, PLANT AND EQUIPMENT 
 
                      Freehold        Leasehold   Datacentre     Computer       Office       Motor 
                      property    improve-ments    equipment    equipment    equipment    vehicles      Total 
                       GBP'000          GBP'000      GBP'000      GBP'000      GBP'000     GBP'000    GBP'000 
------------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 Cost: 
 At 1 April 
  2013                     837            5,180       11,215       17,138        1,251          43     35,664 
 Additions 
  in the year                -            1,195        5,305        6,290          249           -     13,039 
 Acquisition 
  of subsidiaries        1,225              357          325        4,831           59           5      6,802 
 Disposals 
  in the year                -                -            -        (192)            -           -      (192) 
 At 31 March 
  2014                   2,062            6,732       16,845       28,067        1,559          48     55,313 
 Additions 
  in the year                -              109        1,522        9,705          582           -     11,918 
 Acquisition 
  of subsidiary              -               16            -          434            3           -        453 
 Disposals 
  in the year                -                -            -        (322)            -           -      (322) 
 Currency 
  translation 
  differences                -                -            -           94            -           -         94 
 At 31 March 
  2015                   2,062            6,857       18,367       37,978        2,144          48     67,456 
------------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 Accumulated 
  depreciation: 
 At 1 April 
  2013                    (79)          (1,097)      (3,675)     (10,218)        (679)        (32)   (15,780) 
 Charge for 
  the year                (37)            (321)      (1,109)      (5,535)        (164)         (4)    (7,170) 
 Disposals 
  in the year                -                -            -          170            -           -        170 
 At 31 March 
  2014                   (116)          (1,418)      (4,784)     (15,583)        (843)        (36)   (22,780) 
 Charge for 
  the year                (34)            (440)      (1,469)      (7,925)        (269)         (5)   (10,142) 
 Disposals 
  in the year                -                -            -          322            -           -        322 
 Currency 
  translation 
  differences                -                -            -         (10)            -           -       (10) 
------------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 At 31 March 
  2015                   (150)          (1,858)      (6,253)     (23,196)      (1,112)        (41)   (32,610) 
------------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 Carrying 
  amount: 
 At 31 March 
  2015                   1,912            4,999       12,114       14,782        1,032           7     34,846 
 
 At 31 March 
  2014                   1,946            5,314       12,061       12,484          716          12     32,533 
------------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 

Of the total additions in the year of GBP11,918,000 (2014: GBP13,039,000), GBP458,000 (2014: GBP894,000) were funded by finance leases, GBP2,354,000 (2014: GBP1,577,000) was included in trade payables as unpaid invoices at the year end resulting in a net GBP777,000 (2014: GBP65,000) movement in trade payables and GBPnil (2014: GBP429,000) related to non-cash reinstatement provisions. Consequently, the consolidated statement of cash flows discloses a figure of GBP10,683,000 (2014: GBP11,651,000) as the cash outflow in respect of property, plant and equipment additions in the year.

10.

   10.       BORROWINGS 
 
                                     2015      2014 
                                  GBP'000   GBP'000 
----------------------------     --------  -------- 
 
  Current: 
  Obligations under finance 
   leases                           (938)   (1,038) 
  Bank loans                     (21,457)  (18,090) 
  Current borrowings             (22,395)  (19,128) 
 
  Non-current: 
  Obligations under finance 
   leases                         (1,346)   (1,780) 
  Bank loans                            -  (11,936) 
  Total non-current 
   borrowings                     (1,346)  (13,716) 
 
 
  Total borrowings               (23,741)  (32,844) 
-------------------------------  --------  -------- 
 
   11.       ANALYSIS OF CHANGE IN NET CASH/(DEBT) 
 
                                                                        Finance 
                                      Cash and       Bank      Other     leases 
  Analysis of change          cash equivalents      loans      loans   and hire 
  in net cash/(debt)                   GBP'000    GBP'000    GBP'000   purchase     Total 
                                                                        GBP'000   GBP'000 
--------------------------  ------------------  ---------  ---------  ---------  -------- 
 
  At 1 April 2013                       11,392    (8,848)          -    (2,972)     (428) 
 
  Repayment of bank 
   loans                                     -     16,500          -          -    16,500 
  New bank loans                             -   (37,500)          -          -  (37,500) 
  Impact of effective 
   interest rate                             -      (174)          -          -     (174) 
  Inception of finance 
   leases                                    -          -          -      (896)     (896) 
  Acquired on acquisition 
   of subsidiary                         1,355        (4)    (5,731)      (334)   (4,714) 
  Cash flow                                278          -      5,731      1,384     7,393 
--------------------------  ------------------  ---------  ---------  ---------  -------- 
  At 31 March 2014                      13,025   (30,026)          -    (2,818)  (19,819) 
 
  Repayment of bank 
   loans                                     -     22,000          -          -    22,000 
  New bank loans                             -   (13,500)          -          -  (13,500) 
  Impact of effective 
   interest rate                             -         69          -          -        69 
  Inception of finance 
   leases                                    -          -          -      (640)     (640) 
  Acquired on acquisition 
   of subsidiary                           155          -          -       (36)       119 
  Currency translation 
   differences                               -          -          -       (35)      (35) 
  Cash flow                            (4,833)          -          -      1,245   (3,588) 
  At 31 March 2015                       8,347   (21,457)          -    (2,284)  (15,394) 
--------------------------  ------------------  ---------  ---------  ---------  -------- 
 
   12.       CONTINGENT CONSIDERATION 
 
                                          2015      2014 
                                       GBP'000   GBP'000 
 ---------------------------------    --------  -------- 
 
  Contingent consideration due 
   on acquisitions: 
 
    *    ServerSpace Limited           (1,650)         - 
 
    *    Skymarket Limited                   -      (32) 
 
    *    Redstation Limited                  -   (1,239) 
 
  Total contingent consideration 
  due on acquisitions                  (1,650)   (1,271) 
----------------------------------    --------  -------- 
 
   13.       ANNUAL REPORT AND ACCOUNTS 

The Annual Report and Accounts for 2015 will be posted to shareholders on 30 June 2015 and will also be available free of charge on request from the Company's registered office; Lister Pavilion, Kelvin Campus, West of Scotland Science Park, Glasgow G20 0SP and on the Group's web-site at www.iomart.com.

   14.       POST BALANCE SHEET EVENT 

The Group acquired 100% of the issued share capital and voting rights of SystemsUp on 5 June 2015 on a no debt, no cash, normalised working capital basis.

SystemsUp is a consultancy operation based in London which specialises in the provision of Public Cloud consultancy largely in the UK public sector. The company has formed strong relationships with the Public Cloud providers and its consultants are highly skilled in Public Cloud consultancy and deployment. The acquisition is in line with the Group's strategy to grow its managed cloud computing operations both organically and by acquisition.

At completion, an initial payment of GBP9.0m in cash was made and in addition an amount of GBP0.5m was paid as an interim settlement of the expected amount due in respect of the no debt, no cash, normalised working capital adjustment. A further sum is contingent on a measure of revenue for the year to 31 March 2016 which is expected to be paid in either May or June 2016. The potential fair value of the contingent consideration payable has been initially estimated to be in the region of GBP1.0m to GBP3.5m. This is a provisional estimate of the likely range of the contingent consideration payment. The contingent consideration is not limited.

As the completion date of the acquisition was after the balance sheet date of the Group, there is no revenue or profit before tax from SystemsUp included in the Group's Consolidated Statement of Comprehensive Income for the year ended 31 March 2015. In addition, financial information from SystemsUp for the year ended 31 March 2015 has not been included in the pro-forma full year information as shown in note 7.

   15.       ANNUAL GENERAL MEETING 

The Annual General Meeting of the Company will be held at 10.00am on 26 August 2015 at the Company's registered office.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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