Glasgow-based cloud computing firm Iomart said it expects to report revenue growth of 10% to £127 million and adjusted profit before tax of £15 million (FY23: £14.8 million) for the year to March 31, 2024.

Iomart Group CEO Lucy Dimes said the firm’s three most recent acquisitions have all added recurring revenue growth in the post-acquisition period and Iomart sees continued M&A activity as an important part of strengthening its overall capability and market growth plans.

In a trading update, Iomart said: “The group has seen good growth in order bookings within its managed services business, as both existing customers and prospects have responded positively to our broader solution set and re-invigorated focus on customer service.

“The positive financial impact of this has been held back by lower than expected customer renewal rates in H2, including across the long tail of smaller customers, that have shown more sensitivity to the energy price rises which were applied towards the end of FY23.

“As the group continues its evolution towards a broader portfolio of managed service offerings, the impact of potential lower level of renewals in our smaller customer base and more commoditised areas of the business will decrease.

“The Extrinsica acquisition, which completed on 5 June 2023, has brought a demonstrable increase in the Microsoft based capabilities of the group, and increased its revenues year-on-year albeit that growth was tempered by the delay of some larger orders from existing customers.

“As a result, none of the earn-out consideration will now be payable.

“The process of integration of Extrinsica within the group is now well underway, providing the group’s existing customers with full access to these Microsoft capabilities.

“Accesspoint Technologies, acquired on 5 December 2023, is performing in line with expectations.” 

CEO Dimes said: “I am pleased with the progress achieved in the year, with the increasing strength of our offering reflected in good order growth.

“Our resilient financial results, extensive customer base and deep technical expertise continue to provide a solid platform for enhanced revenue growth over the medium term, from extended product solutions, focused sales and marketing activity and complementary M&A.

“Our three most recent acquisitions have all added recurring revenue growth in the post-acquisition period, and we see continued M&A activity as an important part of strengthening our overall capability and market growth plans.

“We continue to be active in the identification of targets which add skills, experience and capability to enhance our proposition, as we drive the business to be the UK’s leading secure cloud services provider.”