Redcentric Regulatory News (RCN)

31 March 2016

Redcentric plc

("Redcentric" or the "Company")

Pre-close Trading Update

Redcentric plc (AIM:RCN), a leading UK IT managed services provider, is today issuing a pre-close trading update for the second half of the financial year to 31 March 2016.

The positive momentum reported at the interim results has continued through the second half of the year. Contracted revenues continue to grow, driven both through new client wins and with existing clients taking more services and products.

EBITDA margins have improved as we continue to improve the revenue mix to higher margin services. Overall, revenue and EBITDA are both expected to be in line with expectations.

City Lifeline Ltd, which was acquired for £4.8m on 29 January 2016, is performing in line with plan, and its integration into the wider Redcentric business is progressing well.

During the second half, the business has increased its success-based capital expenditure given the high levels of new customer activity. Following this expenditure and an increase in year-end debtors, principally reflecting the timing of some collections, the Company's balance sheet remains strong, with a net debt to adjusted EBITDA ratio of below 1.0x.

There is good sales momentum, with a strong pipeline of future opportunities. Overall, the Board are confident in the outlook of the business.

Redcentric is expecting to report results for the year to 31 March 2016 on 16 June 2016.

Fraser Fisher, Chief Executive Officer of Redcentric, commented;

"We're pleased with our performance in the second half of the year. The strength of our business model, with its high proportion of recurring revenue, provides stability from which we can plan our growth. We remain confident in the strength of the business to continue to successfully execute its growth strategy".

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