Iomart shares get some respite amid new strategy

Iomart CEO Reece Donovan

Shares of Glasgow-based cloud computing firm Iomart Group regained some of their lost ground on Tuesday after the company reported strong levels of recurring revenues in its half yearly results for the period ended September 30, 2021.

That’s despite Iomart reporting that revenue fell 8% to £51.9 million in the first half, reflecting “lower non-recurring equipment and consultancy sales, along with lower customer renewals.”

The Glasgow company said it is confident “that this short-term impact on revenue will be reversed.”

Adjusted profit for the period before tax fell 7% to £9.1 million. Interim dividend is down 7% to 2.42p.

Iomart shares rose about 8% to about £1.56 — but the stock is down about 50% for the past 12 months, leaving the firm’s stock market value at around £170 million.

“The group continues to benefit from very strong levels of recurring revenues of 93% of group revenues,” said Iomart.

In its current trading and outlook section, Iomart said: “As a business we are energised by our refreshed strategy, new brand and clear focus.

“The early customer wins from the new sales campaigns are excellent signs that the strategy is on track and starting to deliver tangible results. Iomart’s high level of recurring revenue remains a considerable strength, providing good visibility for the remainder of the year.

“Current trading is in line with the board’s expectations for the full year.

The journey to the cloud for many is long and complex and iomart is well positioned to support existing and new customers on the multiple paths open to them, ensuring we respond to their specific business requirements and provide exceptional service and reliability.

“It is the blend of our straightforward approach, owned infrastructure assets, people and relationship focus, and agile technology-agnostic solution model, along with extensive customer base and more than 20 years’ experience, that gives us confidence that we will continue to participate successfully within the wider growing cloud sector.”