24th Jun 2020 11:00
(Alliance News) - Cloud computing firm Iomart Group PLC cut its dividend despite a rise in profit and revenue for its recently ended financial year.
For the year that ended in March, Iomart reported a pretax profit of GBP16.8 million, up 4% from GBP16.2 million the year before.
This was on revenue that grew by 9% to GBP112.6 million from GBP103.7 million, driven by organic growth from the Cloud Services division, which more than offset a weaker performance from the Easyspace unit.
Segmentally, the Cloud Services unit reported revenue growth of 10% to GBP99.8 million, buoyed by a strong performance by Cristie Data, which supplies computer equipment to customers' premises along with associated support services.
Meanwhile, Easyspace revenue dipped to GBP12.8 million from GBP13.1 million. Iomart highlighted that Easyspace requires a high marketing budget, as it competes in a more commoditised market in order to grow.
As a result, Iomart intends for Easyspace to retain its existing presence in the UK market through selective marketing and responding to market conditions with "dynamic pricing".
Iomart declared a final dividend of 3.93 pence per share, bringing its total payout to 6.45p, down 14% from 7.46p the prior year.
Looking ahead, the company said in the first two months of the new financial year, it has traded in line with management expectations, as business development continues with discussions by Iomart with both new and existing customers.
However, the timing of new projects is likely to be more uncertain for the rest of the calendar year of 2020.
"This is the twelfth consecutive year of growth since the transition of the business to cloud services in 2008 with the acquisition of our first data centres. Since that time, revenues and profits have grown considerably, with revenue reaching GBP112.6 million, through the combination of continued organic growth and acquisitions," said Chief Executive Officer Angus MacSween.
"Our high levels of recurring revenues, breadth of customer base, industry leading profit margins and strong cash generation, mean we are confident iomart is well positioned to withstand the current challenges and deliver long-term growth," MacSween added.
Shares in Iomart were down 0.6% at 353.87 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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