(Alliance News) - Iomart Group PLC on Tuesday said its interim profit fell and declared a lowered dividend, though it said it expects its full year revenue to be ahead of previous expectations.
The Glasgow-based cloud computing company said its pretax profit in the six months that ended September 30 fell by 18% to GBP4.9 million from GBP6.0 million a year prior, although revenue marginally increased by 1.2% to GBP52.6 million from GBP51.9 million.
Iomart said its falling profit reflected changes in revenue mix and inflationary pressures. Its adjusted earnings before interest, tax, depreciation and amortisation margin was 34%, down from 38% a year earlier.
Its cash conversion ratio also fell to 81% from 91% due to the specific timing of some vendor payments overlapping period ends. It said it remained at 95% on a 12-month basis.
It declared an interim dividend for the period of 1.94 pence, down 20% from 2.42p.
Iomart said it expects its full year revenue to exceeds its initial expectations, highlighting that the full extent of energy price uplifts passed onto customers will be realised in the second half of its financial 2023.
Full year profit revenue is in line with expectations, with its second half performance predicted to improve on the first half.
"We believe the diversity and limited concentration of our customer base, high level of recurring revenue, and strong cash flow generation should shelter us from the worst of the expected economic pressures as the UK enters a recessionary period. The critical nature of the infrastructure and digital services we provide in a growing cloud market will allow us to support businesses well into the future," said Chief Executive Officer Reece Donovan.
Iomart also extended its existing GBP100 million revolving bank facility by 12 months to June 2026. This was agreed in November as part of its five-year growth strategy.
Shares in Iomart were up 2.8% to 115.51p each in London on Tuesday morning.
By Greg Rosenvinge, Alliance News reporter
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Iomart (IOM)