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IOM Iomart Group Plc

145.00
1.00 (0.69%)
Last Updated: 10:47:22
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
  1.00 0.69% 145.00 144.00 149.80 149.80 144.00 144.00 20,990 10:47:22
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Services, Nec 115.64M 7M 0.0624 23.24 162.49M

iomart Reports Positive Half Yearly Results

06/12/2016 9:35am

PR Newswire (US)


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GLASGOW, Scotland, December 6, 2016 /PRNewswire/ --

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

     (Logo: http://photos.prnewswire.com/prnh/20121126/579634 )

FINANCIAL HIGHLIGHTS 

  • Revenue growth of 16% to £42.1m (H1 2016: £36.4m)
    • Cloud Services organic growth of 10% (H1 2016: 10%)
  • Adjusted EBITDA[1] growth of 13% to £17.6m (H1 2016: £15.5m)
  • Adjusted profit before tax2 growth of 23% to £10.6m (H1 2016: £8.7m)
  • Adjusted diluted earnings per share3 from operations increased by 19% to 8.03p (H1 2016: 6.75p)
  • Cashflow from operations increased by 22% to £16.7m (H1 2016: £13.6m)
  • 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 £7.1m (H1 2016: £5.7m)
  • 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 http://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 £42.1m (H1 2016: £36.4m). Our adjusted EBITDA has grown by 13% to £17.6m (H1 2016: £15.5m) and our adjusted profit before tax by 23% to £10.6m (H1 2016: £8.7m).

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 £35.6m (H1 2016: £31.5m) 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 £6.6m (H1 2016: £4.9m) 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 £3.8m, including adjustments required in respect of normalised working capital, was made to acquire Cristie which at the time had £3.1m of cash resulting in a net outflow of funds of £0.7m 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 £42.1m (H1 2016: £36.4m).

Our Cloud Services segment grew revenues by 13% to £35.6m (H1 2016: £31.5m). 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 £6.6m (H1 2016: £4.9m). 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 £27.7m (H1 2016: £24.7m). 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 £17.6m (H1 2016: £15.5m) 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 £16.3m (H1 2016: £15.0m). 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 £3.1m (H1 2016: £2.2m) 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 £1.8m have increased modestly in the period (H1 2016: £1.7m).

Adjusted profit before tax 

Depreciation charges of £5.4m (H1 2016: £5.6m) 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 £0.9m (H1 2016: £0.6m) 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 £0.7m (H1 2016: £0.6m).

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 £10.6m (H1 2016: £8.7m).

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 before tax                6 months to 30/09/2016  6 months to 30/09/2015   Year 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 £0.6m (H1 2016: £0.3m) as a result of the issue of additional share options; charges for the amortisation of acquired intangible assets of £2.7m (H1 2016: £2.4m) which have increased mainly as a result of the full period effect of acquisitions made in previous periods; costs of £0.1m (H1 2016: £0.1m) as a result of acquisitions; finance charges of £nil (H1 2016: £0.2m) 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 £0.04m (H1 2016: £0.07m) 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 £0.2m (H1 2016: £nil).

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 £7.1m (H1 2016: £5.7m).

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 £1.3m (H1 2016: £0.8m), which comprises a current taxation charge of £2.1m (H1 2016: £1.7m), and a deferred taxation credit of £0.8m (H1 2016: £0.9m). 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 £5.8m (H1 2016: £4.9m) 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 £16.7m (H1 2016: £13.6m), which is 95% of our adjusted EBITDA (H1 2016: 88%). Expenditure on taxation in the period was £1.2m (H1 2016: £1.8m), 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 £15.5m (H1 2016: £11.8m).

Expenditure on investing activities of £8.5m (H1 2016: £16.3m) was incurred in the period. £4.6m (H1 2016: £6.6m), 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 £1.4m (H1 2016: £0.4m) 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 £1.2m (H1 2016: £nil) was paid out for contingent consideration due on acquisitions made in previous periods and £0.7m (H1 2016: £8.7m) was incurred on the acquisition of Cristie in the period, as described above, net of cash acquired of £3.1m. We also incurred £0.7m (H1 2016: £0.6m) in respect of the capitalisation of development costs during the period.

There was net cash used in financing activities of £6.7m (H1 2016: £4.0m net cash generated). We generated £0.6m (H1 2016: £0.1m) 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: £9.0m) and we made repayments of £3.0m (H1 2016: £1.0m) during the period. We repaid £0.3m (H1 2016: £0.6m) of finance leases and incurred £0.6m (H1 2016: £0.8m) of finance charges. We also made a dividend payment of £3.4m (H1 2016: £2.7m). As a result cash and cash equivalent balances at the end of the period were £10.6m (H1 2016: £7.9m).

Net Debt 

The net debt position of the Group at the end of the period was £22.2m (H1 2016: £23.2m). 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
                                                                                            to        to   Year to
                                                                                     30/09/201 30/09/201 31/03/201
                                                                                             6         5         6
                                                                                       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 p    4.57 p   10.32 p
    Diluted earnings per share                                                     3    5.36 p    4.52 p   10.17 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
                                                                     to   6 months   Year to
                                                              30/09/201         to 31/03/201
                                                                      6 30/09/2015         6
                                                                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 


   
                                                                  Own
                                                          Own         Foreign
                                                                      currenc
                                                                            y Capital
                                                               shares transla redempt   Share
                                                Share  shares Treasur    tion     ion premium  Merger Retained
    Changes in equity                         capital     EBT       y 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 to 30/09/2016 6 months to 30/09/2015 Year 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                        based                     based
                                                      EBITDA payments                     payments            EBITDA payment
                                                      before        ,              EBITDA        ,            before      s,
                                                       share acquisit              before acquisit             share acquisi
                                                       based      ion               share      ion             based    tion
                                                    payments   costs,               based   costs,           payment  costs,
                                                         and deprecia            payments deprecia             s and depreci
                                                    acquisit   tion & Operating       and   tion & Operating acquisi ation & Operating
                                                         ion amortisa profit/(l acquisiti amortisa profit/(l    tion amortis profit/(l
                                                       costs     tion      oss)  on costs     tion      oss)   costs   ation      oss)
                                                     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
                                                                                                                     (16,616
    Cloud Services                                    16,287  (8,076)     8,211    15,041  (8,396)     6,645  31,084       )    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)
                                                                                                                     (18,628
                                                      17,585  (9,575)     8,010    15,520  (9,061)     6,459  32,341       )    13,713
    Gain on revaluation of contingent consideration                           -                            -                       870
    Group interest and tax                                              (2,195)                      (1,579)                   (3,564)
                                                                                                                     (18,628
    Profit for the period                             17,585  (9,575)     5,815    15,520  (9,061)     4,880  32,341       )    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 to 6 months to    Year to
                                                      30/09/2016  30/09/2015 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 p      4.57 p    10.32 p
    Diluted earnings per share                            5.36 p      4.52 p    10.17 p


   
                                                     6 months to 6 months to    Year to
    Adjusted earnings per share                       30/09/2016  30/09/2015 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 share                     8.14 p      6.82 p    14.66 p
    Adjusted diluted earnings per share                   8.03 p      6.75 p    14.44 p

4.     Acquisition costs 


   
                                                        6 months   6 months
                                                              to         to    Year to
                                                      30/09/2016 30/09/2015 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 £98,000 (H1 2016: £113,000) were incurred in respect of professional fees on an acquisition. In addition to these professional fees, one-off costs of £4,000 (H1 2016: £16,000) directly related to the integration of acquisitions into the Group were also incurred.

5.     Finance costs 


   
                                                        6 months   6 months
                                                              to         to    Year to
                                                      30/09/2016 30/09/2015 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
                                                              to         to    Year to
                                                      30/09/2016 30/09/2015 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: £0.5m) available for offset against future profits and therefore no corresponding deferred tax asset has been recognised (H1 2016: £0.5m).

7.     Intangible assets  


   
                                                                           Domain
                                                                          names &
                                            Customer                           IP
                               Development relations          Beneficial addresse
                      Goodwill       costs      hips Software  contracts        s    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  


   
                                    Leasehold            Computer  Office   Motor
                           Freehold improve-m Datacentre equipmen equipme vehicle
                           property      ents  equipment        t      nt       s    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 


   
                                                     Bank
                                          Cash and            Finance
                                          cash                leases and
                                          equivalent          hire
                                          s          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 £98,000 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 £1,250,000.   On the date of the acquisition a payment of £3,779,000 was made in cash, including an amount of £2,529,000 in settlement in respect of the additional debt assumed, cash acquired and normalised working capital position of Cristie at completion.

Cristie earned revenue of £388,000 and generated profits before tax of £31,000 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 http://www.iomart.com.


INDEPENDENT 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 


SOURCE iomart Group PLC

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