9th Sep 2025 09:40
(Alliance News) - Gamma Communications PLC on Tuesday saw its shares edge higher as it guided adjusted earnings per share "slightly ahead" ahead of market expectations.
The Berkshire, England-based provider of communication services reported pretax profit of GBP43.5 million for the six months that ended June 30, down 10% from GBP48.5 million a year earlier.
Revenue, however, advanced 12% to GBP316.6 million from GBP282.5 million, but with operating expenses hampering its bottom line.
Operating expenses rose 27% to GBP127.6 million from GBP100.1 million, as German costs advanced to GBP24.1 million from GBP7.0 million following the acquisitions of Starface and Placetel.
Gamma noted that the UK businesses' costs edged higher to GBP59.6 million from GBP54.1 million, with this including the impact of the acquisition of BrightCloud.
The company tied this increased UK expense to inflation, the increase in employers' national insurance contributions as well as a slight headcount increase.
Gamma declared an interim dividend per share of 7.4 pence, up 14% on the prior year's 6.5p, adding that it has a "strong balance sheet" and "continues to generate significant operating cash flow liquidity".
Shares in Gamma Communications rose 6.4% to 1,132.00p on Tuesday morning in London.
Looking ahead, the company expects adjusted earnings before interest, tax, depreciation and amortisation in line with a company-compiled market consensus range of GBP139.4 million to GBP143.1 million. This compares to GBP125.5 million achieved in 2024.
Gamma is also guiding adjusted EPS "slightly ahead" of the market consensus range of 89.9p to 93.9p. In 2024, it reported adjusted EPS of 85.1p.
"Gamma has achieved another strong set of results. Our German business, bolstered by our recent acquisitions (Starface and Placetel) has performed particularly strongly, while the performance in the UK has been resilient in spite of a continuing challenging macro-economic backdrop for SME," said Chief Executive Andrew Belshaw.
"We continue to view M&A as a key tool to complement our organic growth. Our robust business model is underpinned by a high recurring revenue base from solutions that are critical to the businesses that use them, strong cash generation and available liquidity. This leaves us well placed to maximise the M&A opportunity even in challenging macro-economic times. Our highly cash generative approach will allow us to continue to return cash to shareholders," continued Belshaw.
By Christopher Ward, Alliance News reporter
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