Iomart Group PLC Pre-close Trading Statement (0878B)

TIDMIOM

RNS Number : 0878B

Iomart Group PLC

31 March 2017

   Date:                       31 March 2017 
   On behalf of:        iomart Group plc ("iomart" or the "Group") 

Embargoed until: 0700hrs

iomart Group plc

Pre-close Trading Statement

iomart Group plc (AIM:IOM), the cloud computing company, is pleased to provide its pre-close trading statement for the year ending 31 March 2017 ahead of the announcement of its full year results.

Group Trading Performance

The Board is pleased to report that iomart expects to deliver another excellent set of results.

For the year to 31 March 2017, the Group expects to show revenue growth of approximately 17% and adjusted EBITDA(1) of approximately GBP36.6 million (FY2016: GBP32.3 million), in line with market consensus expectations. In addition we expect to report a 19% increase in adjusted(2) profit before tax to approximately GBP22.4 million (FY2016: GBP18.9 million).

Over the period, the Group has delivered good growth in both revenue and profit and the Board anticipates that growth will continue in the future.

Operations

The Cloud Services segment has continued to win a substantial amount of new business over the year, benefiting from the growing adoption of cloud services by organisations that need a strong partner with the necessary infrastructure, skills and experience to provide the certainty, scalability and flexibility they require. Cloud Services also benefitted from the full year contribution of SystemsUp which was acquired in June 2015. The choices for businesses considering a move to the cloud are ever more complex and iomart's ability to provide consultancy and services across the whole cloud spectrum, including public, private and hybrid cloud, leaves us well positioned for future growth.

Easyspace has performed in line with expectations, which has seen it return to organic revenue growth after the decline in FY2016, and has benefitted from a full year contribution of United Communications which was acquired in November 2015.

Dividends

We have previously announced a progressive dividend policy under which we would pay a dividend of up to a maximum of 25% of the adjusted diluted earnings per share for the financial year. In the previous financial year, the payout ratio was 22%. In line with past performance the Group has continued to generate high levels of operating cash over the year and in addition we are currently carrying a very low level of gearing with our net debt likely to be around one third of our adjusted EBITDA at the end of this financial year. Consequently, the Board has decided to review the upper limit of the dividend payout ratio. As a result, we now intend to increase the maximum payout ratio to 40% of adjusted diluted earnings per share. The Board anticipates announcing a payout ratio for the current financial year in excess of the previous maximum level of 25% when the results for the year are reported.

Board Change

Following 18 years of service Sarah Haran has decided to pursue other interests and so will stand down from the Board with immediate effect. The Board would like to express its thanks to Sarah for her long term contribution to the success of the Group over many years and wish her well for the future.

Notice of Results

The Group expects to report its results for the year to 31 March 2017 on Tuesday 13 June 2017.

Angus MacSween, CEO of iomart Group plc, stated:

"iomart has delivered yet another year of exciting growth. The long term opportunity remains very real and iomart continues to broaden its cloud skills, experience and breadth of management to ensure it is well positioned for future growth. Our strong balance sheet and our increasing cashflow leaves us in good financial health. I would like to add my personal thanks to Sarah Haran who has made a significant contribution to the success of iomart for many years."

(1) adjusted EBITDA means earnings before interest, tax, depreciation, amortisation, share based payment charges, acquisition related costs and non-recurring acquisition items and in the previous year a gain on revaluation of contingent consideration.

(2) adjusted profit before tax means profits before, tax, share based payment charges, amortisation of acquired intangibles, acquisition related costs, non-recurring acquisition related items, mark to market adjustments in respect of interest swap arrangements, interest charges on contingent consideration and in the previous year the accelerated write off of arrangement fees on the bank borrowing facility which was repaid early during that year and a gain on revaluation of contingent consideration.

For further information:

 
 iomart Group plc      Tel: [phone] 
 Angus MacSween 
  Richard Logan 
 
 Peel Hunt LLP         Tel: [phone] 
  (Nominated Adviser 
  and Broker) 
 Richard Kauffer 
  Euan Brown 
 
 Alma PR               Tel: [phone] 
  (Financial PR) 
  Caroline Forde 
  Hilary Buchanan 
  John Coles 
  Helena Bogle 
 

About iomart Group plc

iomart Group PLC (AIM: IOM) helps organisations maximise the flexibility, cost effectiveness and security of the cloud. From strategy to delivery, our 300+ consultants and solutions architects provide the cloud expertise to transform your business. With a dynamic range of managed cloud services that integrate with the hyper clouds of AWS and Azure, our agnostic approach delivers solutions tailored to your specific requirements. iomart is a long term supplier to G-Cloud and our infrastructure and cloud and backup services are designed to meet the requirements of the UK public sector. To find out more about our managed cloud services visit www.iomart.com For our cloud consultancy visit www.systemsup.co.uk

This information is provided by RNS

The company news service from the London Stock Exchange

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March 31, 2017 02:00 ET (06:00 GMT)