Iomart has reported revenue growth of 12% year-on-year to £115.6m, a record level for the cloud computing group.
Its final results for the year ended 31 March 2023 stated that the performance was due to a combination of improved customer renewal levels, organic revenue growth within core cloud managed services, inflationary pricing adjustments - primarily for data centre energy usage - and the acquisition of Concepta last August.
Concepta provided £6.2m of revenue, a positive profit contribution and has strengthened the group’s indirect routes to market.
However, during the period there was a reduction in adjusted earnings before tax and adjusted profit before tax, which reflects iomart's revenue mix, together with investment in up-skilling employees' capabilities, appropriate wage increases and cost of living support.
Profitability margins and adjusted earnings margin both fell, at 31.3% - versus 36.9% the pervious year - and 12.8% - versus 16.6% in 2022 - respectively.
Statutory profit before tax reduced to £8.5m, from £12.2m, and includes consistent adjusted items, the largest being non-cash amortisation charges on acquired intangibles of £3.9m, plus a current year £800,000 non-recurring cost associated with the interpretation of the Energy Bill Relief Scheme.
Year-end net debt of £39.8m was down from £41.3m a year earlier.
The financial updated noted that a new regional sales leadership team reshaped the sales structure during the first half, with order bookings accelerating in the second.
Iomart's product management team continued to support solution portfolio development, including the refinement of data security and managed Microsoft Azure offerings, alongside the launch of a new multi-tenant cloud platform.
During the period, Lucy Dimes appointed as new Independent chair, and - subsequent to the year-end - two new Independent non-executive directors, Annette Nabavi and Adrian Chamberlain, were appointed.
Also subsequent to the year-end, the acquisition of Extrinsica Global on 5 June should provide the capabilities to support new and existing customers using the Azure cloud platform.
The first two months of the new financial year are in line with internal expectations, reporting revenues ahead of the equivalent prior period, with a mix of organic and acquisitive growth.
Chief executive Reece Donovan commented: “A higher level of M&A activity has been pleasing to see, with two acquisitions having been completed in the last 10 months.
“These acquisitions have expanded our capabilities and routes to market, making our solution portfolio relevant to a wider audience.
“The increase in the effectiveness of our sales activities, the operational improvements made, the resilience of our business model and our clear focus on execution gives us a stronger foundation on which to accelerate organic growth, whilst making selective acquisitions.”
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