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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 Half-year Report (0232R)

06/12/2016 7:00am

UK Regulatory


Iomart (LSE:IOM)
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TIDMIOM

RNS Number : 0232R

Iomart Group PLC

06 December 2016

6 December 2016

iomart Group plc

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

Half Yearly Results

iomart (AIM:IOM), the cloud computing company, is pleased to report its consolidated half yearly results for the period ended 30 September 2016.

FINANCIAL HIGHLIGHTS

   --      Revenue growth of 16% to GBP42.1m (H1 2016: GBP36.4m) 

o Cloud Services organic growth of 10% (H1 2016: 10%)

   --      Adjusted EBITDA(1) growth of 13% to GBP17.6m (H1 2016: GBP15.5m) 
   --      Adjusted profit before tax(2) growth of 23% to GBP10.6m (H1 2016: GBP8.7m) 

-- Adjusted diluted earnings per share(3) from operations increased by 19% to 8.03p (H1 2016: 6.75p)

   --      Cashflow from operations increased by 22% to GBP16.7m (H1 2016: GBP13.6m) 
   --      Operating cash conversion rate increased to 95% of adjusted EBITDA (H1 2016: 88%) 

OPERATIONAL HIGHLIGHTS

   --      Ongoing investment in all forms of cloud skills 

-- Continuing to develop relationships with major Public Cloud suppliers leading to growth in Public Cloud revenues

   --      Consultancy division, SystemsUp, gains AWS Public Sector Partner for Government status 

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 26% to GBP7.1m (H1 2016: GBP5.7m) 
   --      Basic earnings per share from operations increased by 19% to 5.43p (H1 2016: 4.57p) 

Angus MacSween, CEO commented,

"Trading in the first half of the year has been very good and we remain focussed on building our recurring revenues in line with our business model. We are uncovering an increasing breadth of opportunities to constantly grow that recurring revenue and remain confident in our future prospects."

(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, share based payment charges, mark to market adjustments in respect of interest rate swaps, interest charges in respect of contingent consideration due, acquisition costs and in the previous period the accelerated write off of arrangement fees on the restructuring of our bank borrowing facility.

(3) Throughout this statement adjusted earnings per share is earnings per share before amortisation charges on acquired intangible

assets, share based payment charges, mark to market adjustments in respect of interest rate swaps, interest charges in respect of contingent consideration due, acquisition costs and in the previous period the accelerated write off of arrangement fees on the restructuring of our bank borrowing facility including the taxation effect of these.

This interim announcement contains forward-looking statements, which have been made by the directors in good faith based on the information available to them up to the time of the approval of this report and such information should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information.

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 
 
 Alma PR               Tel: 020 8004 4217 
 Caroline Forde 
 Hilary Buchanan 
 
 

About iomart Group plc

iomart Group Plc (AIM: IOM) designs, builds and manages cloud environments. Expert in all types of managed cloud - public, private and hybrid - iomart is vendor, platform and technology agnostic and will recommend the cloud environment to meet your specific business needs.

With a global infrastructure of 10 UK and 6 Global data centres, fully certified to supply services to both the public and private sectors, and with over 200 technical experts on hand, iomart delivers Any Cloud Your Way.

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

Chief Executive's Statement

Introduction

We have again enjoyed a very good trading period with Group revenue having grown by 16% to GBP42.1m (H1 2016: GBP36.4m). Our adjusted EBITDA has grown by 13% to GBP17.6m (H1 2016: GBP15.5m) and our adjusted profit before tax by 23% to GBP10.6m (H1 2016: GBP8.7m).

Market

The move to the cloud continues to be at the centre of attention within IT departments.

iomart continues to invest in the skills required to architect, migrate, manage, monitor, secure and scale public cloud, private cloud, hybrid IT and traditional IT, with a view to enabling organisations to transform, innovate, and scale their operations.

There is a long term and large market opportunity in preparing and managing enterprises for transformation and deployment to cloud platforms. The IT environment has become more complex with more choice and we see a growing requirement for the skills associated with cloud adoption.

Our ongoing challenge and opportunity is to navigate through these early days of the further evolution of cloud adoption to ensure we continue to develop the assets, skills and resources necessary to be successful in that space.

As we have broadened the scope of our services to include professional services, we have begun to see the benefits of having the skill sets around consulting and managing cloud transformation. We are entering into more strategic conversations with IT departments who are looking for 'joined up thinking' when it comes to looking at moving applications or services to the cloud.

There is a growing trend to manage IT in a more fragmented way. Gone are the days when large organisations or departments would outsource their entire IT departments and magically believe that things would somehow be better.

IT evolution now tends to be project by project, application by application, with a view to maximising value, not being locked into any one technology vendor, and being able to migrate services at will.

This plays into the strengths we have established around agility and flexibility alongside the right expertise and infrastructure, with an ability to manage the mix of public and private cloud and hybrids of both effectively.

This is a very long term market opportunity. We are only now starting to see back office workloads move to cloud environments and this is a trend that will continue for many years. It is, after all, only day 2 of the internet.

Operational review

Cloud Services

The Cloud Services operation continues to perform well, delivering an overall revenue growth rate of 13% with an encouraging 10% organic growth rate.

During the period we have continued to win new business in both the private and public cloud arenas. Our positioning as an agnostic supplier of cloud solutions together with our wide range of skills and experience makes us the ideal partner for companies that are considering moving some or all of their infrastructure into the cloud.

We have continued to develop our relationships with the main vendors in the market including Microsoft, Dell/ EMC and AWS. Our consultancy division, SystemsUp, has recently been named as an AWS Public Sector Partner for Government. The public cloud vendors led by AWS and Microsoft continue to win market share and it is clear that they require an ecosystem of organisations, such as iomart, to provide services and support to the users of these public clouds.

This has led to the generation of revenue from the provision of Public Cloud solutions. As expected this has modestly affected some of our percentage profit margins and the impact of this has been a reduction in our percentage margins at both gross profit and adjusted EBITDA level but compensated by an improvement in our adjusted and reported profit before tax percentage margins. This is due to the fact that as we provide Public Cloud solutions to our customers we incur a charge from the Public Cloud service provider which is included within our cost of sales. The increased cost of providing Public Cloud solutions has offsetting savings elsewhere within our income statement with lower charges for power, which is also included in cost of sales and depreciation. On private or hybrid cloud solutions we acquire and operate the infrastructure ourselves and thereby incur depreciation and power charges for their operation, whereas the charge from the Public Cloud service provider includes these costs.

The acquisition of Cristie Data Limited ("Cristie") towards the end of the period provides us with access to an excellent customer base many of whom are in the public sector.

Our revenues have grown to GBP35.6m (H1 2016: GBP31.5m) as a result of our acquisitive and organic activities and we continue to expect Cloud Services to be the driver of growth going forward.

Easyspace

The Easyspace segment has performed as expected and with the addition of United Communications Limited (which trades as "United Hosting") from November 2015 has recorded substantial growth in both revenue and profitability.

Easyspace provides a range of products to the small and micro business community including an ever wider range of domain names, shared hosting, emails and dedicated servers.

Our revenues have grown by 33% to GBP6.6m (H1 2016: GBP4.9m) mainly as a result of our acquisitions, although we have also seen organic growth of 3% (H1 2016: organic decline of 9.5%) during this period.

M&A Activity

On 25 August we acquired the entire share capital of Cristie on a no debt, no cash, normalised working capital basis. Cristie provides storage and backup solutions and has a significant presence in the public sector market. On completion a payment of GBP3.8m, including adjustments required in respect of normalised working capital, was made to acquire Cristie which at the time had GBP3.1m of cash resulting in a net outflow of funds of GBP0.7m to acquire the company.

The M&A market continues to provide opportunities and we remain committed to continuing to complement our organic growth through further acquisitions.

Financial Performance

Revenue

Overall revenues from our operations grew 16% to GBP42.1m (H1 2016: GBP36.4m).

Our Cloud Services segment grew revenues by 13% to GBP35.6m (H1 2016: GBP31.5m). This increase was largely due to organic growth of 10% (H1 2016: 10%) added to which was the contribution for the full six month period from the acquisition of SystemsUp in June 2015 and a modest contribution from the acquisition of Cristie.

Our Easyspace segment grew revenues by 33% to GBP6.6m (H1 2016: GBP4.9m). This increase was mainly due to the impact of the acquisition of United Hosting although the segment did record organic revenue growth of 3% in the period (H1 2016: 9.5% organic revenue decline).

Gross Margin

The gross profit in the period, which is calculated by deducting from revenue variable cost of sales such as domain costs, power and sales commission and the relatively fixed costs of operating our datacentres, increased by 12% to GBP27.7m (H1 2016: GBP24.7m). This substantial increase in gross profit was a direct result of the contribution from the additional revenue generated over the period, including the impact of acquisitions.

In percentage terms the gross margin was 65.8% (H1 2016: 67.7%). As explained above Cloud Services saw a reduction in gross margin percentage as we begin to provide Public Cloud solutions which incur a charge from the Public Cloud service provider with offsetting savings elsewhere within our income statement.

The gross profit margin within our traditional private and hybrid cloud solutions continues to rise due to our relatively static datacentre costs which to some extent are fixed in nature and therefore do not rise in line with revenue growth.

The Easyspace segment saw an increase in its gross margin percentage mainly due to the favourable impact of the acquisition of United Hosting in November 2015.

Whilst the provision of Public Cloud solutions into our range of services has, as expected, impacted our gross and adjusted EBITDA percentage margins, due to offsetting savings elsewhere within our income statement, it has not had an adverse effect on our adjusted profit before tax percentage margin which increased to 25.2% (H1 2016: 23.8%).

Adjusted EBITDA

The Group's adjusted EBITDA grew by 13% to GBP17.6m (H1 2016: GBP15.5m) reflecting a significantly improved performance. In percentage terms the adjusted EBITDA margin reduced to 41.8% (H1 2016: 42.6%) with the reduction arising in the Cloud Services segment whilst the Easyspace segment recorded an improved gross margin percentage.

Cloud Services increased its adjusted EBITDA by 8% to GBP16.3m (H1 2016: GBP15.0m). The continued improvement in adjusted EBITDA is largely due to the additional gross margin contribution arising from our organic sales growth offset by continued investment in staffing levels and a full period contribution from the acquisition of SystemsUp in June 2015. In percentage terms the margin reduced to 45.8% (H1 2016: 47.8%). The primary reasons for the percentage margin reduction were the reduction in the Cloud Services gross margin percentage previously described and inclusion of SystemsUp for the full six month period. Whilst we have initially included the activities of Cristie within the Cloud Services segment we intend to consider this further in due course and may not include it within this segment in the future.

The adjusted EBITDA of Easyspace increased by 38% to GBP3.1m (H1 2016: GBP2.2m) largely as a result of the impact of the acquisition of United Hosting in November 2015. In percentage terms the margin increased to 46.8% (H1 2016: 44.9%) which again was predominantly due to the impact of the acquisition of United Hosting.

Group overheads, which are not allocated to segments, include the cost of the Board, all the running costs of the headquarters in Glasgow, and Group led functions such as human resources, marketing, finance and design. Group overheads of GBP1.8m have increased modestly in the period (H1 2016: GBP1.7m).

Adjusted profit before tax

Depreciation charges of GBP5.4m (H1 2016: GBP5.6m) have slightly reduced. This is a combination of additional depreciation charges as a result of continued investment in our datacentre estate and the purchase of equipment to provide services to our new and existing customers, offset by assets bought in previous periods becoming fully depreciated in this period and therefore no longer contributing to the ongoing depreciation charge. In addition we have not incurred any capital expenditure on the provision of public cloud solutions which has had the effect of reducing our depreciation charge in absolute terms and also in it falling as a percentage of our revenue to 12.7% (H1 2016: 15.3%). In addition this percentage reduction is also due to the impact of the mix of assets which we have acquired, with differing useful lives causing reduced depreciation charges and the fact that not all of our operations require the same level of capital expenditure to generate revenue. For example, our SystemsUp consultancy operation requires no significant capital expenditure and thereby does not generate a depreciation charge related to its revenues. The charge for the amortisation of intangible assets, excluding amortisation of intangible assets resulting from acquisitions ("amortisation of acquired intangible assets") has increased to GBP0.9m (H1 2016: GBP0.6m) as a result of increased charges for software licenses and the additional development activity within the enlarged Group.

Net finance costs, excluding the mark to market adjustment on interest swaps on the Company's loans, the interest charge on contingent consideration due and in the previous period the accelerated write off of arrangement fees on restructuring of our bank borrowing facility were GBP0.7m (H1 2016: GBP0.6m).

After deducting the charges for depreciation, amortisation, excluding the amortisation of acquired intangible assets, and finance costs, excluding the interest charges in respect of contingent consideration due, the accelerated write off of arrangement fees in the previous period and the mark to market adjustment on interest rate swaps, from adjusted EBITDA the adjusted profit for the period before tax increased by 23% to GBP10.6m (H1 2016: GBP8.7m).

The adjusted profit before tax margin for the period was 25.2% (H1 2016: 23.8%). The increase in percentage margin of 1.4% is due to a combination of the reduction in the adjusted EBITDA margin over the period of 0.8% offset by the reduction in deprecation charge as a percentage of revenue of 2.6%.

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 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 before tax to profit                     6 months         6 months              Year 
  before tax                                 to 30/09/2016    to 30/09/2015     to 31/03/2016 
 Adjusted profit before tax                         10,632            8,677            18,970 
 Less: Share based payments                          (557)            (338)           (1,081) 
 Less: Amortisation of acquired 
  intangible assets                                (2,697)          (2,417)           (5,354) 
 Less: Acquisition costs                             (102)            (129)             (116) 
 Less: Accelerated write off 
  of arrangement fees on restructuring 
  of facility                                            -            (177)             (177) 
 Add: Mark to market adjustment 
  on interest rate swaps                                43               67                64 
 Less: Interest on contingent 
  consideration                                      (177)                -             (152) 
 Add: Gain on revaluation of 
  contingent consideration                               -                -               870 
 Profit before tax                                   7,142            5,683            13,024 
----------------------------------------  ----------------  ---------------  ---------------- 
 

The adjusting items are: share based payment charges in the period which increased to GBP0.6m (H1 2016: GBP0.3m) as a result of the issue of additional share options; charges for the amortisation of acquired intangible assets of GBP2.7m (H1 2016: GBP2.4m) which have increased mainly as a result of the full period effect of acquisitions made in previous periods; costs of GBP0.1m (H1 2016: GBP0.1m) as a result of acquisitions; finance charges of GBPnil (H1 2016: GBP0.2m) due to the accelerated release of arrangement fees on the bank borrowing facility which was restructured in the previous period; a finance cost credit of GBP0.04m (H1 2016: GBP0.07m) in respect of mark to market adjustments relating to interest rate swaps on the Company's loans and interest charges on contingent consideration due of GBP0.2m (H1 2016: GBPnil).

After deducting the charges for share based payments, the amortisation of acquired intangible assets, acquisition costs, the mark to market adjustment on interest rate swaps, the interest charges in respect of contingent consideration due and the accelerated write off of arrangement fees on the bank borrowing facility which was restructured during the previous period from the adjusted profit before tax, the reported profit before tax increased by 26% to GBP7.1m (H1 2016: GBP5.7m).

In percentage terms the profit before tax margin was 17.0% (H1 2016: 15.6%). This increase in percentage margin of 1.4% is similar to the increase in the adjusted profit before tax percentage margin and is due to the same reasons as the adjusted profit before tax margin increase previously explained.

Profit for the period from total operations

There is a tax charge in the period of GBP1.3m (H1 2016: GBP0.8m), which comprises a current taxation charge of GBP2.1m (H1 2016: GBP1.7m), and a deferred taxation credit of GBP0.8m (H1 2016: GBP0.9m). The tax charge for the period has increased because of the increase in profitability of the Group. This results in a profit for the period from total operations of GBP5.8m (H1 2016: GBP4.9m) an increase of 20%.

Earnings per share

Adjusted diluted earnings per share, which is based on profit for the period attributed to ordinary shareholders before share based payment charges, amortisation of acquired intangible assets, the accelerated write off of arrangement fees on the restructuring of the bank facility in the previous period, the mark to market adjustment on interest rate swaps, the interest charges in respect of contingent consideration due and acquisition costs and the tax effect of these items, was 8.03p (H1 2016: 6.75p) an increase of 19%.

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

Basic earnings per share from continuing operations was 5.43p (H1 2016: 4.57p) an increase of 19%.

The calculation of both adjusted diluted earnings per share and basic earnings per share is included at note 3.

Cash flow

The Group generated cash from operations in the period of GBP16.7m (H1 2016: GBP13.6m), which is 95% of our adjusted EBITDA (H1 2016: 88%). Expenditure on taxation in the period was GBP1.2m (H1 2016: GBP1.8m), which was reduced due to the receipt of a tax refund relating to previous periods, resulting in net cash flow from operating activities in the period of GBP15.5m (H1 2016: GBP11.8m).

Expenditure on investing activities of GBP8.5m (H1 2016: GBP16.3m) was incurred in the period. GBP4.6m (H1 2016: GBP6.6m), net of related finance lease drawdown and trade creditors, was incurred on the acquisition of property, plant and equipment principally to provide services to our customers. We made purchases of intangible assets of GBP1.4m (H1 2016: GBP0.4m) in the period, with the increase largely due to the advance purchase of additional software licences for storage and backup purposes. In respect of M&A activity GBP1.2m (H1 2016: GBPnil) was paid out for contingent consideration due on acquisitions made in previous periods and GBP0.7m (H1 2016: GBP8.7m) was incurred on the acquisition of Cristie in the period, as described above, net of cash acquired of GBP3.1m. We also incurred GBP0.7m (H1 2016: GBP0.6m) in respect of the capitalisation of development costs during the period.

There was net cash used in financing activities of GBP6.7m (H1 2016: GBP4.0m net cash generated). We generated GBP0.6m (H1 2016: GBP0.1m) from the issue of shares as a result of the exercise of options by staff. We made no drawdowns under our bank facility (H1 2016: GBP9.0m) and we made repayments of GBP3.0m (H1 2016: GBP1.0m) during the period. We repaid GBP0.3m (H1 2016: GBP0.6m) of finance leases and incurred GBP0.6m (H1 2016: GBP0.8m) of finance charges. We also made a dividend payment of GBP3.4m (H1 2016: GBP2.7m). As a result cash and cash equivalent balances at the end of the period were GBP10.6m (H1 2016: GBP7.9m).

Net Debt

The net debt position of the Group at the end of the period was GBP22.2m (H1 2016: GBP23.2m). This represents a multiple of less than one times our annual adjusted EBITDA which we believe is a very comfortable level of debt to carry.

Current trading and outlook

Trading in the first half of the year has been very good and we remain focussed on building our recurring revenues in line with our business model. We are uncovering an increasing breadth of opportunities to constantly grow that recurring revenue and remain confident in our future prospects.

Angus MacSween

CEO

5 December 2016

Consolidated Interim Statement of Comprehensive Income

Six months ended 30 September 2016

 
                                                  Unaudited         Unaudited           Audited 
                                           ----------------  ----------------  ---------------- 
                                                   6 months          6 months              Year 
                                              to 30/09/2016     to 30/09/2015     to 31/03/2016 
                                           ----------------  ----------------  ---------------- 
                                                    GBP'000           GBP'000           GBP'000 
                                           ----------------  ----------------  ---------------- 
 
  Revenue                                            42,119            36,431            76,280 
 
  Cost of sales                                    (14,416)          (11,755)          (24,650) 
-------------------------------------      ----------------  ----------------  ---------------- 
 
  Gross profit                                       27,703            24,676            51,630 
 
  Administrative expenses                          (19,693)          (18,217)          (37,917) 
-------------------------------------      ----------------  ----------------  ---------------- 
 
  Operating profit                                    8,010             6,459            13,713 
 
  Analysed as: 
  Earnings before interest, 
   tax, depreciation, amortisation, 
   acquisition costs and share 
   based payments                                    17,585            15,520            32,341 
  Share based payments                                (557)             (338)           (1,081) 
  Acquisition costs                     4             (102)             (129)             (116) 
  Depreciation                          8           (5,365)           (5,570)          (10,878) 
  Amortisation - acquired intangible 
   assets                                           (2,697)           (2,417)           (5,354) 
  Amortisation - other intangible 
   assets                                             (854)             (607)           (1,199) 
-------------------------------------      ----------------  ----------------  ---------------- 
 
 Gain on revaluation of contingent 
  consideration                                           -                 -               870 
  Finance income                                         16                10               128 
  Finance costs                         5             (884)             (786)           (1,687) 
-------------------------------------      ----------------  ----------------  ---------------- 
 
  Profit before taxation                              7,142             5,683            13,024 
 
  Taxation                              6           (1,327)             (803)           (2,005) 
-------------------------------------      ----------------  ----------------  ---------------- 
 
  Profit for the period from 
   total operations                                   5,815             4,880            11,019 
 
 
 
  Other comprehensive income 
  Currency translation differences                       14                 1                10 
-------------------------------------      ----------------  ----------------  ---------------- 
  Other comprehensive expense 
   for the period                                        14                 1                10 
-------------------------------------      ----------------  ----------------  ---------------- 
 
  Total comprehensive income 
   for the period                                     5,829             4,881            11,029 
 
 
 
  Attributable to equity holders 
   of the parent                                      5,829             4,881            11,029 
 
 
 
   Basic and diluted earnings 
   per share 
 
  Total operations 
  Basic earnings per share              3              5.43              4.57             10.32 
                                                          p                 p                 p 
  Diluted earnings per share            3              5.36              4.52             10.17 
                                                          p                 p                 p 
-------------------------------------      ----------------  ----------------  ---------------- 
 

Consolidated Interim Statement of Financial Position

As at 30 September 2016

 
                                           Unaudited    Unaudited      Audited 
                                         -----------  -----------  ----------- 
                                          30/09/2016   30/09/2015   31/03/2016 
                                         -----------  -----------  ----------- 
                                             GBP'000      GBP'000      GBP'000 
                                         -----------  -----------  ----------- 
 
  ASSETS 
  Non-current assets 
  Intangible assets - goodwill        7       61,724       55,050       61,123 
  Intangible assets - other           7       22,497       19,366       23,065 
  Lease deposit                                2,760        2,416        2,760 
  Property, plant and equipment       8       35,340       34,831       36,045 
                                             122,321      111,663      122,993 
  Current assets 
  Cash and cash equivalents                   10,599        7,938       10,341 
  Trade and other receivables                 14,092       13,123       13,718 
                                              24,691       21,061       24,059 
 
  Total assets                               147,012      132,724      147,052 
 
  LIABILITIES 
  Non-current liabilities 
  Contingent consideration 
   due on acquisitions                9            -            -      (2,068) 
  Non-current borrowings                       (740)      (1,029)        (826) 
  Trade and other payables                     (318)        (593)        (455) 
  Provisions for other liabilities 
   and charges                               (2,010)      (2,330)      (1,879) 
  Deferred tax liability                     (1,521)      (1,521)      (2,075) 
-----------------------------------      -----------  -----------  ----------- 
                                             (4,589)      (5,473)      (7,303) 
  Current liabilities 
  Contingent consideration 
   due on acquisitions                9      (2,220)      (2,655)      (1,135) 
  Trade and other payables                  (19,827)     (17,445)     (19,532) 
  Provisions                                       -            -        (211) 
  Current income tax liabilities             (2,506)      (1,645)      (1,504) 
  Current borrowings                        (32,037)     (30,078)     (35,098) 
                                            (56,590)     (51,823)     (57,480) 
 
  Total liabilities                         (61,179)     (57,296)     (64,783) 
 
  Net assets                                  85,833       75,428       82,269 
-----------------------------------      -----------  -----------  ----------- 
 
  EQUITY 
  Share capital                                1,078        1,078        1,078 
  Own shares                                   (267)        (514)        (489) 
  Capital redemption reserve                   1,200        1,200        1,200 
  Share premium                               21,067       21,067       21,067 
  Merger reserve                               4,983        4,983        4,983 
  Foreign currency translation 
   reserve                                      (23)         (46)         (37) 
  Retained earnings                           57,795       47,660       54,467 
-----------------------------------      -----------  -----------  ----------- 
  Total equity                                85,833       75,428       82,269 
-----------------------------------      -----------  -----------  ----------- 
 

Consolidated Interim Statement of Cash Flows

Six months ended 30 September 2016

 
                                             Unaudited         Unaudited           Audited 
                                      ----------------  ----------------  ---------------- 
                                              6 months          6 months              Year 
                                         to 30/09/2016     to 30/09/2015     to 31/03/2016 
                                      ----------------  ----------------  ---------------- 
                                               GBP'000           GBP'000           GBP'000 
                                      ----------------  ----------------  ---------------- 
 
 Profit before tax                               7,142             5,683            13,024 
 Gain on revaluation of contingent 
  consideration                                      -                 -             (870) 
 Finance costs - net                               868               776             1,559 
 Depreciation                                    5,365             5,570            10,878 
 Amortisation                                    3,551             3,024             6,553 
 Share based payments                              557               338             1,081 
 Movement in trade receivables                     186           (1,111)           (1,612) 
 Movement in trade payables                      (944)             (634)               298 
 Cash flow from operations                      16,725            13,646            30,911 
 Taxation paid                                 (1,222)           (1,826)           (4,311) 
                                      ----------------  ----------------  ---------------- 
 Net cash flow from operating 
  activities                                    15,503            11,820            26,600 
 
 Cash flow from investing 
  activities 
 Purchase of property, plant 
  and equipment                                (4,634)           (6,643)          (12,385) 
 Capitalisation of development 
  costs                                          (667)             (577)           (1,123) 
 Purchase of intangible assets                 (1,384)             (406)           (1,207) 
 Payment for acquisition of 
  subsidiary undertakings net 
  of cash acquired                               (675)           (8,651)          (15,924) 
 Contingent consideration 
  paid                                         (1,161)                 -           (1,650) 
 Payment of deposits                                 -                 -             (300) 
 Finance income received                            16                10                33 
                                      ----------------  ----------------  ---------------- 
 Net cash used in investing 
  activities                                   (8,505)          (16,267)          (32,556) 
 
 Cash flow from financing 
  activities 
 Exercise of share options                         610                54                91 
 Draw down of bank loans                             -             9,000            16,500 
 Repayment of finance leases                     (343)             (577)             (984) 
 Repayment of bank loans                       (3,000)           (1,000)           (3,500) 
 Finance costs paid                              (632)             (771)           (1,489) 
 Dividends paid                                (3,375)           (2,668)           (2,668) 
                                      ----------------  ----------------  ---------------- 
 Net cash (used in)/generated 
  from financing activities                    (6,740)             4,038             7,950 
 
 Net increase/(decrease) in 
  cash and cash equivalents                        258             (409)             1,994 
 
 Cash and cash equivalents 
  at the beginning of the period                10,341             8,347             8,347 
                                      ----------------  ----------------  ---------------- 
 
 Cash and cash equivalents 
  at the end of the period                      10,599             7,938            10,341 
                                      ================  ================  ================ 
 

Consolidated Interim Statement of Changes in Equity

Six months ended 30 September 2016

 
                                                       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 2015       1,078      (70)       (468)          (47)         1,200     21,067      4,983      44,936    72,679 
 
 Profit in 
  the period             -         -           -             -             -          -          -       4,880     4,880 
 Currency 
  translation 
  differences            -         -           -             1             -          -          -           -         1 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  comprehensive 
  income                 -         -           -             1             -          -          -       4,880     4,881 
 
 Dividends               -         -           -             -             -          -          -     (2,668)   (2,668) 
 Share based 
  payments               -         -           -             -             -          -          -         338       338 
 Deferred tax 
  on share 
  based 
  payments               -         -           -             -             -          -          -         144       144 
 Issue of own 
  shares for 
  option 
  redemption             -         -          24             -             -          -          -          30        54 
 Total 
  transactions 
  with owners            -         -          24             -             -          -          -     (2,156)   (2,132) 
 
 Balance at 
  30 September 
  2015               1,078      (70)       (444)          (46)         1,200     21,067      4,983      47,660    75,428 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Profit in 
  the period             -         -           -             -             -          -          -       6,139     6,139 
 Currency 
  translation 
  differences            -         -           -             9             -          -          -           -         9 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  comprehensive 
  income                 -         -           -             9             -          -          -       6,139     6,148 
 
 Share based 
  payments               -         -           -             -             -          -          -         743       743 
 Deferred tax 
  on share 
  based 
  payments               -         -           -             -             -          -          -        (87)      (87) 
 Issue of own 
  shares for 
  option 
  redemption             -         -          25             -             -          -          -          12        37 
 Total 
  transactions 
  with owners            -         -          25             -             -          -          -         668       693 
 
 Balance at 
  31 March 2016      1,078      (70)       (419)          (37)         1,200     21,067      4,983      54,467    82,269 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 
 Profit in 
  the period             -         -           -             -             -          -          -       5,815     5,815 
 Currency 
  translation 
  differences            -         -           -            14             -          -          -           -        14 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 Total 
  comprehensive 
  income                 -         -           -            14             -          -          -       5,815     5,829 
 
 Dividends               -         -           -             -             -          -          -     (3,375)   (3,375) 
 Share based 
  payments               -         -           -             -             -          -          -         557       557 
 Deferred tax 
  on share 
  based 
  payments               -         -           -             -             -          -          -        (57)      (57) 
 Issue of own 
  shares for 
  option 
  redemption             -         -         222             -             -          -          -         388       610 
 Total 
  transactions 
  with owners            -         -         222             -             -          -          -     (2,487)   (2,265) 
 
 Balance at 
  30 September 
  2016               1,078      (70)       (197)          (23)         1,200     21,067      4,983      57,795    85,833 
---------------  ---------  --------  ----------  ------------  ------------  ---------  ---------  ----------  -------- 
 

Notes to the Half Yearly Financial Information

Six months ended 30 September 2016

   1.              Accounting policies 

The financial information for the year ended 31 March 2016 set out in this half yearly report does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The figures for the year ended 31 March 2016 have been extracted from the Group financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and included an independent auditor's report, which was unqualified and did not contain a statement under section 493 of the Companies Act 2006.

The half yearly financial information has been prepared using the same accounting policies and estimation techniques as will be adopted in the Group financial statements for the year ending 31 March 2017. The Group financial statements for the year ended 31 March 2016 were prepared under International Financial Reporting Standards as adopted by the European Union. These half yearly financial statements have been prepared on a consistent basis and format with the Group financial statements for the year ended 31 March 2016. The provisions of IAS 34 'Interim Financial Reporting' have not been applied in full.

   2.              Operating segments 

Revenue by Operating Segment

 
                 6 months to 30/09/2016          6 months to 30/09/2015            Year to 31/03/2016 
             ------------------------------  ------------------------------  ------------------------------ 
              External   Internal     Total   External   Internal     Total   External   Internal     Total 
               GBP'000    GBP'000   GBP'000    GBP'000    GBP'000   GBP'000    GBP'000    GBP'000   GBP'000 
-----------  ---------  ---------  --------  ---------  ---------  --------  ---------  ---------  -------- 
 Easyspace       6,550          -     6,550      4,936          -     4,936     10,883          -    10,883 
 Cloud 
  Services      35,569        846    36,415     31,495        481    31,976     65,397      1,114    66,511 
             ---------  ---------  --------  ---------  ---------  --------  ---------  ---------  -------- 
                42,119        846    42,965     36,431        481    36,912     76,280      1,114    77,394 
-----------  ---------  ---------  --------  ---------  ---------  --------  ---------  ---------  -------- 
 

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. No individual country other than the United Kingdom contributes a material amount of revenue therefore revenue from outside the United Kingdom has been shown as from Rest of the World.

Analysis of Revenue by Destination

 
                                     6 months         6 months             Year 
                                to 30/09/2016    to 30/09/2015    to 31/03/2016 
                                      GBP'000          GBP'000          GBP'000 
-------------------------     ---------------  ---------------  --------------- 
 United Kingdom                        35,062           30,072           64,218 
 Rest of the 
  World                                 7,057            6,359           12,062 
                              ---------------  ---------------  --------------- 
 Revenue from operations               42,119           36,431           76,280 
--------------------------    ---------------  ---------------  --------------- 
 
   2.              Operating segments (continued) 

Profit by Operating Segment

 
                             6 months to 30/09/2016                          6 months to 30/09/2015                            Year to 31/03/2016 
                 ----------------------------------------------  ----------------------------------------------  --------------------------------------------- 
                                                                                                                                        Share 
                                         Share                                           Share                                          based 
                        EBITDA           based                          EBITDA           based                          EBITDA      payments, 
                        before       payments,                          before       payments,                          before    acquisition 
                         share     acquisition                           share     acquisition        Operating          share         costs, 
                         based          costs,        Operating          based          costs,    profit/(loss)          based   depreciation        Operating 
                      payments    depreciation    profit/(loss)       payments    depreciation                        payments              &    profit/(loss) 
                           and               &                             and               &                             and   amortisation 
                   acquisition    amortisation                     acquisition    amortisation                     acquisition 
                         costs                                           costs                                           costs 
                       GBP'000         GBP'000          GBP'000        GBP'000         GBP'000          GBP'000        GBP'000        GBP'000          GBP'000 
---------------  -------------  --------------  ---------------  -------------  --------------  ---------------  -------------  -------------  --------------- 
 Easyspace               3,067           (840)            2,227          2,215           (198)            2,017          5,094          (815)            4,279 
 Cloud Services         16,287         (8,076)            8,211         15,041         (8,396)            6,645         31,084       (16,616)           14,468 
 Group 
  overheads            (1,769)               -          (1,769)        (1,736)               -          (1,736)        (3,837)              -          (3,837) 
 Share based 
  payments                   -           (557)            (557)              -           (338)            (338)              -        (1,081)          (1,081) 
 Acquisition 
  costs                      -           (102)            (102)              -           (129)            (129)              -          (116)            (116) 
                 -------------  --------------  ---------------  -------------  --------------  ---------------  -------------  -------------  --------------- 
                        17,585         (9,575)            8,010         15,520         (9,061)            6,459         32,341       (18,628)           13,713 
 Gain on 
  revaluation 
  of contingent 
  consideration                                               -                                               -                                            870 
 Group interest 
  and tax                                               (2,195)                                         (1,579)                                        (3,564) 
---------------  -------------  --------------  ---------------  -------------  --------------  ---------------  -------------  -------------  --------------- 
 Profit for 
  the period            17,585         (9,575)            5,815         15,520         (9,061)            4,880         32,341       (18,628)           11,019 
---------------  -------------  --------------  ---------------  -------------  --------------  ---------------  -------------  -------------  --------------- 
 

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

   3.              Earnings per share 

The calculations of earnings per share are based on the following results and numbers:

 
                                            6 months          6 months              Year 
                                       to 30/09/2016     to 30/09/2015     to 31/03/2016 
                                    ----------------  ----------------  ---------------- 
 
 Total Operations 
                                    ----------------  ----------------  ---------------- 
 
                                             GBP'000           GBP'000           GBP'000 
 Profit for the financial period 
  and basic earnings attributed 
  to ordinary shareholders                     5,815             4,880            11,019 
 
                                                  No                No                No 
 Weighted average number of 
  ordinary shares:                               000               000               000 
 Called up, allotted and fully 
  paid at start of period                    107,803           107,803           107,803 
 Own shares held in Treasury                   (619)             (932)             (898) 
 Shares held by Employee Benefit 
  Trust                                        (141)             (141)             (141) 
 Weighted average number of 
  ordinary shares - basic                    107,043           106,730           106,764 
 Dilutive impact of share options              1,390             1,245             1,609 
 Weighted average number of 
  ordinary shares - diluted                  108,433           107,975           108,373 
----------------------------------  ----------------  ----------------  ---------------- 
 
 Basic earnings per share                       5.43              4.57             10.32 
                                                   p                 p                 p 
 Diluted earnings per share                     5.36              4.52             10.17 
                                                   p                 p                 p 
----------------------------------  ----------------  ----------------  ---------------- 
 
 
                                                6 months          6 months              Year 
 Adjusted earnings per share               to 30/09/2016     to 30/09/2015     to 31/03/2016 
                                        ----------------  ----------------  ---------------- 
 
                                                 GBP'000           GBP'000           GBP'000 
 
   Profit for the financial period 
   and basic earnings attributed 
   to ordinary shareholders                        5,815             4,880            11,019 
 - Amortisation of acquired 
  intangible assets                                2,697             2,417             5,354 
 - Acquisition costs                                 102               129               116 
 - Share based payments                              557               338             1,081 
 - Mark to market interest adjustment               (43)              (67)              (64) 
 - Accelerated finance cost 
  due to refinancing                                   -               177               177 
 - Finance charge on contingent 
  consideration                                      177                 -               152 
 - Gain on revaluation of contingent 
  consideration                                        -                 -             (870) 
 - Tax impact of adjusted items                    (597)             (590)           (1,311) 
--------------------------------------  ----------------  ----------------  ---------------- 
 Adjusted profit for the financial 
  period and adjusted basic earnings 
  attributed to ordinary shareholders              8,708             7,284            15,654 
 
 Adjusted basic earnings per                        8.14              6.82             14.66 
  share                                                p                 p                 p 
 Adjusted diluted earnings per                      8.03              6.75             14.44 
  share                                                p                 p                 p 
--------------------------------------  ----------------  ----------------  ---------------- 
 
   4.              Acquisition costs 
 
                                        6 months         6 months             Year 
                                   to 30/09/2016    to 30/09/2015    to 31/03/2016 
                                         GBP'000          GBP'000          GBP'000 
 -----------------------------   ---------------  ---------------  --------------- 
 
  Professional fees                           98              113              263 
  Non-recurring integration 
   costs 
  - Onerous lease provisions                   -                -            (169) 
  - Other                                      4               16               22 
------------------------------   ---------------  ---------------  --------------- 
  Total acquisition costs 
   for the period                            102              129              116 
------------------------------   ---------------  ---------------  --------------- 
 

During the period costs of GBP98,000 (H1 2016: GBP113,000) were incurred in respect of professional fees on an acquisition. In addition to these professional fees, one-off costs of GBP4,000 (H1 2016: GBP16,000) directly related to the integration of acquisitions into the Group were also incurred.

   5.              Finance costs 
 
                                                  6 months         6 months             Year 
                                             to 30/09/2016    to 30/09/2015    to 31/03/2016 
                                                   GBP'000          GBP'000          GBP'000 
 ---------------------------------------   ---------------  ---------------  --------------- 
 
  Bank loans                                         (628)            (505)          (1,109) 
  Finance leases                                      (99)            (135)            (251) 
  Other interest charges                              (23)             (36)             (62) 
  Mark to market adjustment 
   on interest rate swaps                               43               67               64 
  Accelerated write off of arrangement 
  fees on restructuring of facility                      -            (177)            (177) 
  Finance charge on contingent 
   consideration                                     (177)                -            (152) 
----------------------------------------   ---------------  ---------------  --------------- 
  Finance costs for the period                       (884)            (786)          (1,687) 
----------------------------------------   ---------------  ---------------  --------------- 
 
   6.              Taxation 
 
                                                  6 months         6 months             Year 
                                             to 30/09/2016    to 30/09/2015    to 31/03/2016 
                                                   GBP'000          GBP'000          GBP'000 
 ---------------------------------------   ---------------  ---------------  --------------- 
 
  Tax charge for the period                        (2,126)          (1,720)          (3,663) 
  Adjustment relating to prior 
   periods                                               -             (12)               52 
----------------------------------------   ---------------  ---------------  --------------- 
  Total current taxation                           (2,126)          (1,732)          (3,611) 
 
  Origination and reversal 
   of temporary differences                            871              933            1,482 
  Adjustment relating to prior 
   periods                                             (4)                -               31 
  Effect of different statutory 
  tax rates of overseas jurisdictions                   12              (4)               61 
  Effect of changes in tax 
   rates                                              (80)                -               32 
----------------------------------------   ---------------  ---------------  --------------- 
  Total deferred taxation 
   credit                                              799              929            1,606 
 
  Taxation charge for the 
   period                                          (1,327)            (803)          (2,005) 
----------------------------------------   ---------------  ---------------  --------------- 
 

The Group has no unused tax losses (H1 2016: GBP0.5m) available for offset against future profits and therefore no corresponding deferred tax asset has been recognised (H1 2016: GBP0.5m).

   7.              Intangible assets 
 
                                                                                               Domain 
                                                                                                names 
                                    Development         Customer              Beneficial         & IP 
                         Goodwill         costs    relationships   Software    contracts    addresses      Total 
                          GBP'000       GBP'000          GBP'000    GBP'000      GBP'000      GBP'000    GBP'000 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 
 Cost: 
 At 1 April 
  2015                     47,342         3,709           26,431      2,114           86          280     79,962 
 Additions in 
  the period                    -             -                -        264            -            -        264 
 Currency translation 
  differences                   -             -             (12)        (2)            -            -       (14) 
 Acquired on 
  acquisition 
  of subsidiary             7,708             -            2,516          -            -            -     10,224 
 Development 
  costs capitalised             -           577                -          -            -            -        577 
 At 30 September 
  2015                     55,050         4,286           28,935      2,376           86          280     91,013 
 Additions in 
  the period                    -             -                -        756            -            -        756 
 Currency translation 
  differences                   -             -               35          5            -            -         40 
 Acquired on 
  acquisition 
  of subsidiary             6,073             -            5,912          -            -            -     11,985 
 Development 
  costs capitalised             -           546                -          -            -            -        546 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 At 31 March 
  2016                     61,123         4,832           34,882      3,137           86          280    104,340 
 Additions in 
  the period                  601             -                -      1,315            -            -      1,916 
 Currency translation 
  differences                   -             -               65         25            -            -         90 
 Acquired on 
  acquisition 
  of subsidiary                 -             -              982          -            -            -        982 
 Development 
  costs capitalised             -           667                -          -            -            -        667 
 At 30 September 
  2016                     61,724         5,499           35,929      4,477           86          280    107,995 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 
 Accumulated 
  amortisation: 
 At 1 April 
  2015                          -       (2,496)          (9,945)    (1,003)         (19)        (116)   (13,579) 
 Currency translation 
  differences                   -             -                5          1            -            -          6 
 Charge for 
  the period                    -         (384)          (2,413)      (195)          (4)         (28)    (3,024) 
 At 30 September 
  2015                          -       (2,880)         (12,353)    (1,197)         (23)        (144)   (16,597) 
 Currency translation 
  differences                   -             -             (21)        (5)            -            -       (26) 
 Charge for 
  the period                    -         (314)          (2,934)      (251)          (3)         (27)    (3,529) 
 At 31 March 
  2016                          -       (3,194)         (15,308)    (1,453)         (26)        (171)   (20,152) 
 Currency translation 
  differences                   -             -             (51)       (20)            -            -       (71) 
 Charge for 
  the period                    -         (442)          (2,693)      (385)          (4)         (27)    (3,551) 
 At 30 September 
  2016                          -       (3,636)         (18,052)    (1,858)         (30)        (198)   (23,774) 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 
 Carrying amount: 
 At 30 September 
  2016                     61,724         1,863           17,877      2,619           56           82     84,221 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 
 At 31 March 
  2016                     61,123         1,638           19,574      1,684           60          109     84,188 
 
 At 30 September 
  2015                     55,050         1,406           16,582      1,179           63          136     74,416 
----------------------  ---------  ------------  ---------------  ---------  -----------  -----------  --------- 
 
   8.              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 
  2015                  2,062            6,857       18,367       37,978        2,144          48     67,456 
 Additions 
  in the period             -              227          444        4,773           98           -      5,542 
 Acquisition 
  of subsidiary             -                -            -            9            -          20         29 
 Disposals 
  in the period             -                -            -         (15)            -           -       (15) 
 Currency 
  translation 
  differences               -                -            -         (18)            -           -       (18) 
 At 30 September 
  2015                  2,062            7,084       18,811       42,727        2,242          68     72,994 
 Additions 
  in the period             -              239        1,661        4,330          111           -      6,341 
 Acquisition 
  of subsidiary             -                -            -          143            3           -        146 
 Currency 
  translation 
  differences               -                -            -           42            -           -         42 
 At 31 March 
  2016                  2,062            7,323       20,472       47,242        2,356          68     79,523 
 Additions 
  in the period             -               34          312        3,884          148           -      4,378 
 Acquisition 
  of subsidiary             -                -            -          179           27           -        206 
 Disposals 
  in the period             -              (3)            -         (58)            -           -       (61) 
 Currency 
  translation 
  differences               -                -            -          134            -           -        134 
 At 30 September 
  2016                  2,062            7,354       20,784       51,381        2,531          68     84,180 
-----------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 Accumulated 
  depreciation: 
 At 1 April 
  2015                  (150)          (1,858)      (6,253)     (23,196)      (1,112)        (41)   (32,610) 
 Charge for 
  the period             (20)            (256)        (769)      (4,379)        (139)         (7)    (5,570) 
 Disposals 
  in the period             -                -            -           15            -           -         15 
 Currency 
  translation 
  differences               -                -            -            2            -           -          2 
 At 30 September 
  2015                  (170)          (2,114)      (7,022)     (27,558)      (1,251)        (48)   (38,163) 
 Charge for 
  the period             (21)            (223)        (917)      (4,020)        (120)         (7)    (5,308) 
 Currency 
  translation 
  differences               -                -            -          (7)            -           -        (7) 
 At 31 March 
  2016                  (191)          (2,337)      (7,939)     (31,585)      (1,371)        (55)   (43,478) 
 Charge for 
  the period             (21)            (226)        (922)      (4,067)        (121)         (8)    (5,365) 
 Disposals 
  in the period             -                3            -           58            -           -         61 
 Currency 
  translation 
  differences               -                -            -         (58)            -           -       (58) 
 At 30 September 
  2016                  (212)          (2,560)      (8,861)     (35,652)      (1,492)        (63)   (48,840) 
-----------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 Carrying 
  amount: 
 At 30 September 
  2016                  1,850            4,794       11,923       15,729        1,039           5     35,340 
-----------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 At 31 March 
  2016                  1,871            4,986       12,533       15,657          985          13     36,045 
 
 At 30 September 
  2015                  1,892            4,970       11,789       15,169          991          20     34,831 
-----------------  ----------  ---------------  -----------  -----------  -----------  ----------  --------- 
 
 
   9.              Contingent consideration due on acquisitions 
 
                                           30/09/2016  30/09/2015  31/03/2016 
                                              GBP'000     GBP'000     GBP'000 
 ---------------------------------------   ----------  ----------  ---------- 
 
  Contingent consideration 
   due on acquisitions 
 
    *    ServerSpace Limited                        -     (1,650)           - 
 
    *    Systems Up Limited                         -     (1,005)       (135) 
 
   *    United Communications Limited         (2,220)           -     (3,068) 
 
  Total contingent consideration 
   due on acquisitions                        (2,220)     (2,655)     (3,203) 
----------------------------------------   ----------  ----------  ---------- 
 
   10.            Analysis of change in net debt 
 
                                                         Finance 
                                      Cash                leases 
                                  and cash       Bank   and hire 
                               equivalents      loans   purchase     Total 
                                   GBP'000    GBP'000    GBP'000   GBP'000 
--------------------------   -------------  ---------  ---------  -------- 
 
  At 1 April 2015                    8,347   (21,457)    (2,284)  (15,394) 
 
  Repayment of bank 
   loans                                 -      1,000          -     1,000 
  New bank loans                         -    (9,000)          -   (9,000) 
  Impact of effective 
   interest rate                         -         46          -        46 
  Cash flow                          (409)          -        587       178 
---------------------------  -------------  ---------  ---------  -------- 
  At 30 September 2015               7,938   (29,411)    (1,697)  (23,170) 
 
  Repayment of bank 
   loans                                 -      2,500          -     2,500 
  New bank loans                         -    (7,500)          -   (7,500) 
  Inception of finance 
   leases                                -          -       (97)      (97) 
  Impact of effective 
   interest rate                         -      (114)          -     (114) 
  Acquired on acquisition 
   of subsidiary                     4,476          -          -     4,476 
  Currency translation 
   difference                            -          -        (2)       (2) 
  Cash flow                        (2,073)          -        397   (1,676) 
---------------------------  -------------  ---------  ---------  -------- 
  At 31 March 2016                  10,341   (34,525)    (1,399)  (25,583) 
 
  Repayment of bank 
   loans                                 -      3,000          -     3,000 
  Impact of effective 
   interest rate                         -      (147)          -     (147) 
  Acquired on acquisition 
   of subsidiary                     3,104          -       (25)     3,079 
  Currency translation 
   difference                            -          -       (24)      (24) 
  Cash flow                        (2,846)          -        343   (2,503) 
  At 30 September 2016              10,599   (31,672)    (1,105)  (22,178) 
---------------------------  -------------  ---------  ---------  -------- 
 
   11.            Acquisitions 

Cristie Data Limited

The Group acquired 100% of the issued share capital of Cristie Data Limited ("Cristie") on 25 August 2016.

Cristie is a Stroud based data storage, backup and virtualisation solutions provider, which has operated across all sectors of industry from SMEs to large enterprises, and public sector to private sector for over 40 years. Cristie is particularly active in the UK public sector especially in education and health, which offers the opportunity for the Group to increase its presence in these areas. The acquisition is in line with the Group's strategy to grow its operations both organically and by acquisition.

During the current period the Group incurred GBP98,000 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 6 months ended 30 September 2016.

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

 
                                              GBP'000 
-------------------------------------------  -------- 
 Recognised amounts of assets acquired and 
  liabilities assumed (provisional): 
 Cash and cash equivalents                      3,104 
 Trade and other receivables                      571 
 Property, plant and equipment                    206 
 Intangible assets                                982 
 Trade and other payables                     (1,361) 
 Current borrowings                              (25) 
 Current income tax liabilities                  (99) 
 Deferred tax liability                         (200) 
-------------------------------------------  -------- 
 Identifiable net assets                        3,178 
 Goodwill                                         601 
-------------------------------------------  -------- 
 Total consideration                            3,779 
-------------------------------------------  -------- 
 
 Satisfied by: 
 Cash - paid on acquisition                     3,779 
 Total consideration to be transferred          3,779 
-------------------------------------------  -------- 
 

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

The agreed purchase price for the shares, on a cash-free, debt-free, normalised working capital basis was GBP1,250,000. On the date of the acquisition a payment of GBP3,779,000 was made in cash, including an amount of GBP2,529,000 in settlement in respect of the additional debt assumed, cash acquired and normalised working capital position of Cristie at completion.

Cristie earned revenue of GBP388,000 and generated profits before tax of GBP31,000 in the period since acquisition.

United Communications Limited

The fair values of acquired assets and liabilities, including goodwill, previously disclosed as provisional for United Communications Limited have been finalised in the current period with no changes to the fair values disclosed in the Annual Report and Accounts 2016.

   13.            Availability of half yearly reports 

Half yearly reports will be sent to all shareholders on 11 January 2017. Copies of the half yearly report will be available for collection from the offices of Peel Hunt LLP, 120 London Wall, London, EC2Y 5ET, for a period of one month from the date of despatch and in accordance with Rules 20 and 26 of the AIM Rules, available from the Company's website at www.iomart.com.

INDEPENT REVIEW REPORT TO IOMART GROUP PLC

Introduction

We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2016 which comprises the consolidated interim statement of comprehensive income, the consolidated interim statement of financial position, the consolidated interim statement of cash flows, the consolidated interim statement of changes in equity and the related notes 1 to 13 set out on pages 8 to 19. We have read the other information contained in the half yearly financial report which comprises only the interim results announcement and the chief executive's statement and considered whether it contains any apparent misstatements or material inconsistencies with the financial information.

This report is made solely to the company in accordance with guidance contained in Independent Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our review work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusion we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules for Companies of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

As disclosed in Note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 1.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2016 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1.

GRANT THORNTON UK LLP

Statutory auditor, Chartered Accountants

Glasgow

5 December 2016

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR AKPDNKBDBNBK

(END) Dow Jones Newswires

December 06, 2016 02:00 ET (07:00 GMT)

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