Glasgow-based cloud computing firm Iomart Group said its revenue fell 8% to £103 million in the year ended March 31, 2022, and profit before tax slipped 2% to £12.2 million.
Iomart said the reduction in revenue “reflects lower non-recurring equipment and consultancy sales, along with lower customer renewal levels at the start of the year, which have since returned to normal levels.”
Iomart shares fell as much as 9% to around £1.70 to give the firm a current stock market value of roughly £187 million.
The Glasgow firm said it plans to use selective M&A to augment its organic growth.
“As well as acquiring new customer bases operating in recurring revenue business models we also plan to strengthen our technology, solution offerings and route to market capabilities,” said the firm.
“We remain active in evaluating potential targets but the timing of M&A closure is hard to predict, and we will at all times maintain a structured and disciplined approach.”
Iomart is proposing a final dividend of 3.60p per share, taking the total for the year to 6.02p “being at the maximum pay-out ratio under our stated dividend policy of paying up to 50% of adjusted diluted earnings per share.”
In its outlook, Iomart said the first two months of the new financial year has seen performance in line with expectations.
Iomart CEO Reece Donovan said: “We have made good progress on all aspects of our strategic growth plan and start the second year of this plan in an improved position.
“With an expanded offering and strengthened team, as well as an established reputation within the UK’s cloud computing market place, we have a strong platform from which to return to a growth phase of the business.
“We are mindful that the wider business environment continues to be challenging.
“As iomart has shown in the past, during periods of uncertainty, we have a robust business model and strong financial position to manage such short-term pressures.
“This is especially the case as the market for cloud computing solutions continues to offer long term growth and our strategic actions taken, together with our M&A plans, puts us in a stronger position to benefit from this over the coming year and beyond.”