Iomart shares take hit as first half profit falls 29%

Iomart CEO Reece Donovan

Shares of Glasgow-based cloud computing firm Iomart Group plc fell about 7% on Tuesday after it published half yearly results for the period ended September 30, 2020, showing revenue up 2% to £56.3 million but profit before tax down 29% to £6 million.

Interim dividend per share is maintained at 2.6p.

Iomart reported a fall in adjusted EBITDA margin which “reflects, as expected, the greater uptake of lower-margin but strategically valuable managed cloud solutions.”

It said the margin is expected to benefit in the second half “from cost base adjustments and integration of recently acquired businesses.”

In its outlook, Iomart reported an increase in new business discussions in recent months “indicating returning confidence in longer-term IT and digital transformation projects” and said its revenue and profit margins “are expected to benefit in H2 FY2021 from growth from existing customers and operational efficiencies.”

Iomart CEO Reece Donovan said: “Iomart’s business model has stood us in good stead and despite the global slowdown in corporate activity, we continue to perform well.

“The previous investments into our sales and operational teams provide us with a strong foundation to accelerate growth once companies regain the economic confidence to make infrastructure transformation decisions.

“We have no doubt the transition to the cloud will continue for many years to come and that we can play a considerable role in being the enablers of that journey for our customers.

“We remain confident in the long-term prospects for iomart.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.