11th Jan 2021 11:17
(Alliance News) - Gamma Communications PLC on Monday said its financial performance in 2020 was "significantly ahead" compared to the year before with earnings set to be slightly ahead of market forecasts.
Shares in Gamma were up 3.2% at 1,620.00 pence in London in morning trading.
The London-based cloud communication services provider said its 2020 financial performance was " significantly ahead of last year" and predicts its adjusted earnings per share and adjusted earnings before interest, tax, depreciation, and amortisation to be slightly ahead of the range of market forecasts.
Gamma's company compiled consensus range for adjusted Ebitda is GBP73.9 million to GBP76.0 million and the adjusted EPS range is 47.0 pence to 51.0p.
In 2019, Gamma's adjusted Ebitda in 2019 was GBP63.5 million and its adjusted EPS was 40.8p. These figures were adjusted for depreciation and amortisation, exceptional items, amortisation on intangibles arising on acquisition, and adjusting tax items.
Further, Gamma is expecting its revenue to be near the top of the range of market expectations, being GBP371.8 million to GBP396.7 million, having posted revenue of GBP328.9 million in 2019.
As at 2020 end, Gamma's gross cash balance for the year was GBP54.1 million, up from GBP53.9 million at the end of 2019. Net cash was GBP48.4 million as a result of a small amount of debt within acquired companies.
Gamma said its closing cash balance exceeded market expectations due to the sale of "The Loop" on December 31, a non-core Manchester-based fibre business, for an undisclosed sum. In the first half of 2020, The Loop delivered GBP700,000 of revenue.
"The increase in cash balance from the previous year end is pleasing given that during the year Gamma spent GBP48.0 million on acquisitions. These acquisitions have given Gamma an entry into both the German and Spanish markets as well as increasing both our market presence and product capabilities in the UK and the Netherlands," said Gamma.
The company maintained its dividend policy in the year, paying dividends totalling GBP10.4 million in 2020 and received no government funding or support.
Gamma is expecting to post its 2020 results on March 23.
Chief Executive Andrew Taylor said: "We are pleased that Gamma has continued to grow strongly whilst also geographically expanding into Spain and Germany. The execution of our [unified communications as a service] product strategy is progressing very well and our product set has continued to perform well and has enabled our end users to work flexibly during the difficult conditions prevalent in 2020."
By Anna Farley; [email protected]
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