12th Mar 2019 11:40
LONDON (Alliance News) - Gamma Communications PLC on Tuesday reported a sharp rise in profit and revenue in 2018 on strong organic growth and upped its final dividend in response.
In 2018, the communications services provider recorded pretax profit of GBP34.5 million, 30% higher than the GBP26.5 million recorded in 2017.
Gamma Communications attributed the rise to its increased gross margin - rising to 46.4% from 44.9% - on an "improved" product mix.
The company's revenue increased 18% in 2018 to GBP284.9 million from GBP242.0 million the year before.
Gamma Communications noted GBP3.4 million of the revenue rise came from its DX Groep acquisition but 16% of the growth was organic. The company's UK indirect channel revenue increased 14% to GBP210.6 million, with its UK direct business growing revenue 24% to GBP70.9 million.
Gamma Communications proposed a final dividend of 6.2 pence per share, 11% higher than the 5.6p paid in 2017, leading to an 11% increase in its total dividend to 9.3p compared to the 8.4p distributed in 2017.
"I have been impressed by what I have observed during my first nine months at Gamma, including the high quality of our team and the strength and special market approach of both our direct and indirect channel businesses, which are both delivering strong double-digit revenue and margin growth," said Chief Executive Andrew Taylor.
Gamma said it is positive about its outlook for 2019 and beyond, believing Brexit will have cause "no material issues" for the company.
The company did note the UK leaving the EU could result in negative macroeconomic factors, but it believes it has a model that "delivers a very high percentage of recurring revenues that gives greater certainty over performance in the short to medium term".
Taylor added: "Looking forward, we are focused on building on our strong business foundations at Gamma, and ensuring that we continue to deliver what our customers and our channel partners want. As part of our Gamma 2023 strategy, we look forward to taking the business forward and delivering long term top and bottom line growth."
Shares in Gamma Communications were up 3.6% Tuesday at 916.00 pence each.
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