(Sharecast News) - Managed IT service provider Adept Technology said on Tuesday that, despite "challenging" macroeconomic conditions in the first few months of its financial year, it had grown its project backlog and continued to win new business and secure contract renewals and extensions.
The AIM-traded firm, which was holding its annual general meeting, did warn that the expected growth of the business was being hindered by global chip shortages for certain types of hardware, which was still impacting the whole of its sector.
Chairman Ian Fishwick told shareholders that lead-time issues on such products was delaying the delivery of client projects, as the company previously reported, as well as some service contracts and related recurring support agreements.
"In addition, inflationary pressures are expected to increase product and operational costs in the 2023 financial year," Fishwick said.
"The group is working closely with its partners to mitigate the supply chain delays and to pass on cost increases, where possible, in particular those linked to connectivity and telephony charges.
"This cushions the business, to some extent, from the inflationary pressures within its supplier base."
Looking ahead, Adept said underlying demand for digitisation and cloud-based services remained strong, as businesses and government continued to seek efficiency benefits, with the board expecting growth in the group's markets to return to anticipated levels as the supply chain blockages eased and the economy returned to "more normal" trading conditions.
"Adept's primary focus remains firmly on the three strategic pillars: delivering strong organic growth, minimising management overheads by reducing to two divisions, and reducing gearing," Ian Fishwick said.
"Strong progress is being made in respect of debt and, with the group's strong portfolio of capabilities, the efficiencies driven by the new 'One AdEPT' platform, and the significant growth opportunities presented by our markets, positions Adept well to benefit from improving macro market conditions and the normalisation of the supply chain."
Adept said it would announce its half-year results for the six months ending 30 September in mid-November.
At 1108 BST, shares in Adept Technology Group were down 6.17% at 114p.
Reporting by Josh White at Sharecast.com.