19th Mar 2018 10:29
LONDON (Alliance News) - Cloud services firm Maintel Holdings PLC hiked its dividend 10% on Monday after it expected a "substantial" growth in its revenue and profit in 2018 amid improved performance after a challenging 2017.
In 2017, pretax profit expanded two-thirds to GBP3.5 million from GBP2.1 million the year prior. This was after revenue grew 23% to GBP133.1 million from GBP108.3 million the before.
Profit performance was helped by a reduction in acquisition related exceptional costs including intangibles amortisation. In 2016, such costs were GBP9.0 million which fell to GBP7.4 million in 2017.
On an adjusted basis - excluding exceptional costs - pretax profit fell 1.8% to GBP10.9 million from GBP11.1 million the year before.
Maintel acquired Intrinsic for GBP4.9 million in August 2017. The company said the integration was "largely complete" with the full GBP2.0 million annualised savings now realised.
In April 2016, Maintel agreed to acquire Azzurri Communications for GBP48.5 million.
Maintel proposed a 19.1 pence per share final dividend, up 9.8% from 17.4p the year prior. For the full year, the dividend rose 9.7% to 33.8p from 30.8p the year before.
"Following the challenges faced in 2017, notably prolonged delays with several large projects, the group has entered 2018 well placed to capitalise on future growth opportunities," Maintel Chief Executive Officer Eddie Buxton said.
"The group has seen customer orders for Avaya installations recover through the initial months of 2018, with a promising pipeline developing, which is expected to have a positive impact on Managed Services and Technology revenues in 2018," Buxton added.
"In addition," Buxton continued, "we are seeing good growth across our suite of ICON cloud services, which is very encouraging, as Maintel cements its transformation to a cloud and managed services provider in the mid-market and enterprise space."
"The acquisition of Intrinsic enhances Maintel's already strong capability in LAN networking and the fast-growing network security sector, and we are already seeing encouraging cross-sell into our existing customer base", Buxton said.
Buxton added the company remained confident of generating "substantial" revenue and earnings before interest, taxes, depreciation and amortisation growth in 2018.
In 2017, adjusted Ebitda stood at GBP12.5 million. This was down from GBP12.6 million the year prior.
"We remain committed to maximising shareholders' returns whilst reducing net debt and maintaining a strong balance sheet," Buxton said. "Moving forward it is our intention to return to a dividend pay-out ratio of at least 40% of adjusted net income. Based on our confident outlook for the business, it is our expectation that the total dividend paid annually will remain progressive in absolute terms."
Shares in Maintel were 0.6% higher at 820.00 pence on Monday.
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