LONDON (Alliance News) - Redcentric PLC Monday expressed confidence in its future prospects as it said it swung to a pretax profit in its recently-ended financial year.
The IT managed services provider posted a pretax profit of GBP7.8 million for the year to end-March, compared with a pretax loss of GBP2.6 million a year before, as revenue rose to GBP94.3 million from GBP58.3 million.
The company proposed a final dividend of 2.5 pence, taking its total dividend for the year to 3.5 pence, compared with its maiden dividend of 1.0 pence a year before.
Redcentric said recurring revenue increased 13%, as low levels of customer churn supported its steadily growing base of recurring contracted revenue on multi-year contracts. Service revenue rose 25%, boosted by contract wins, and lower margin product revenue fell 42% partly due to the management of the company's revenue mix, and a shift in customer demand towards cloud-based services over traditional on-premise services.
Following the year end, the company acquired Calyx Managed Services Ltd for GBP12.0 million. It said the acquisition is currently being integrated into its core operations.
"We are progressing well in our aim to become the preferred IT managed services provider to the UK mid-market. We have considerable momentum in the business and I look to the future with confidence," said Chief Executive Officer Tony Weaver in a statement.
Shares in Redcentric were trading up 2.1% at 161.37 pence early Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Redcentric (RCN)