9th Jul 2019 11:42
(Alliance News) - Adept Technology Group PLC on Tuesday reported a sharp drop in annual profit, on higher administrative costs, but was encouraged to lift its dividend by a jump in revenue.
For the twelve months to March 31, the IT services firm recorded a 47% decrease in pretax profit to GBP2.4 million from GBP4.5 million the year before.
Adept attributed the decreased profit to, among other things, a GBP760,000 one-off payment in the comparison period from Openreach for the installation of data circuits. The company also noted a GBP340,000 increase in finance costs, a GBP600,000 increase in acquisition and restructuring costs, and GBP840,000 in amortisation costs from acquisitions made in the period.
Administrative expenses increased 25% to GBP21.0 million from GBP16.8 million.
More positively, Adept's annual revenue rose 11% to GBP51.3 million from GBP46.4 million.
"The excellent result for this year was delivered through a combination of strategic acquisition and organic contract wins, maintaining margins on customer contracts and remaining focused on high levels of operational efficiency," said Chair Ian Fishwick.
The company's Managed Services product revenue increased 19% to GBP38.5 million, attributed to new acquisitions Shift F7 and ETS Communications. The business now contributes 75% of Adept's total revenue.
In line with its progressive dividend policy, Adept is proposing a final dividend of 4.9 pence per share, 8.9% ahead of the year prior. As a result, the company's full year dividend is up 12% to 9.8p from 8.75p.
Fishwick added: "With a steady start, the board looks forward to an exciting coming year and beyond. The focus for the coming year remains on developing organic sales through leveraging AdEPT's approved supplier status on the various public sector frameworks, encouraging further cross company collaboration and maintaining profitability and cash flow conversion, which will be used to either reduce net borrowings and/or fund suitable earnings-enhancing acquisitions."
Shares in Adept Technology were down 7.5% in London on Tuesday at 335.00 pence each.
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