Redcentric Regulatory News (RCN)

29 September 2014

Redcentric plc

("Redcentric" or "the Group")

Pre-close trading update

Redcentric plc (AIM:RCN), a leading UK IT managed services provider, is today issuing a pre-close trading update covering trading and financial progress in the six months to 30 September 2014. The Group expects to announce its interim results on Monday 17th November 2014.

Trading update

· Strong first half with revenue and EBITDA comfortably in line with expectations

· Increased order intake with strong organic growth

· Cash generation continues to be strong, net debt lower than anticipated

· Maiden dividend paid, interim dividend expected to be paid in February 2015

· Encouraging H1 underpins confidence in achieving full year market expectations

· Low level of gearing and highly cash generative nature of business provides freedom to consider strategic acquisitions alongside a progressive dividend policy

The business continues to perform well and consistently in line with expectations, with improved levels of order intake driving strong organic revenue growth. With integration activities proceeding to plan, profitability has increased substantially.

Cash generation has improved significantly since the comparative period in the prior year, which has resulted in net debt being lower than anticipated. The 1.0p per share maiden dividend was paid in September 2014 and the Company expects that an interim dividend will be paid in February 2015. The Group has substantial headroom in its bank facilities.

During the first half we have achieved several significant milestones, ahead of schedule, with the integration of InTechnology Managed Services Limited which was acquired in December 2013. From July 2014 we have fully adopted a single brand in the market and are trading from a single legal entity, using a core set of unified systems and processes. From September 2014 all customer support has been integrated and is being carried out from a single service desk and unified support system in our Harrogate head office. This evidences the deep and thorough nature of the integration being undertaken, and has resulted in a much stronger enlarged business from which to grow.

Tony Weaver, Chief Executive of Redcentric commented:

"I am delighted that the progress noted at our AGM in August has continued, and we expect to report a strong set of first half metrics in November.

"Our market remains subject to change, which we believe will continue to offer attractive opportunities for Redcentric to capitalise on as a leading independent provider. Our primary objective remains to deliver revenue growth, EBITDA margins in excess of 20 per cent. and attractive returns to shareholders. Our proven ability to generate cash and pay down debt provides us with a strong balance sheet to consider acquisitions that may help us to achieve these objectives, while surplus cash can be applied to our progressive dividend policy."

Enquiries:

Redcentric plc Tel. +44 (0)845 034 1111

Tony Weaver, Chief Executive

Fraser Fisher, Chief Operating Officer

Tim Coleman, Chief Financial Officer

N+1 Singer - NOMAD & Joint Broker Tel. +44 (0)20 7496 3000

Jonny Franklin-Adams / Emily Watts / Ben Wright

finnCap - Joint Broker Tel. +44 (0)20 7220 0500

Charlotte Stranner / Stuart Andrews

MXC Capital Advisory LLP - Financial Advisor Tel: +44 (0)20 7965 8149

Marc Young

Newgate Threadneedle Tel: +44 (0)20 7653 9850

Josh Royston / Hilary Millar