Iomart, the Glasgow-based cloud computing and web hosting company, has provided an upbeat outlook after riding out an “unprecedented” first half trading period.
Thursday, 1st October 2020, 9:05 am
The group, which recently announced the departure of its long-standing chief executive, said its business model had “stood it in good stead” during a period which saw its staff, customers and operations have had to adjust to the impact of Covid-19.
In a trading update for the six months to the end of September, the firm said its business had performed well, despite the global slowdown in corporate activity, with growth from existing customers in line with its expectations for the period.
Ahead of reporting its interim results, Iomart flagged revenue growth of about 2 per cent to some £56 million and “steady levels” of adjusted underlying earnings, at £21m, which would compare with £21.8m a year earlier.
It noted: “These results reflect greater uptake of our managed private cloud solutions which, while at slightly lower margins compared to our legacy self-managed infrastructure, remain sector leading; the timing of billing for certain orders; and only a partial benefit from efficiency adjustments to our cost base made in the period.”
Newly appointed chief executive Reece Donovan told investors: “Iomart has performed extremely well during these difficult times, proving the strength of our recurring revenue model, the value that our customers place on the services we deliver, and the commitment of our teams.
“The integrations of Memset and ServerChoice, which were acquired towards the end of the last financial year, have progressed well and we remain alert to the opportunity to integrate further cloud businesses, customer bases and capabilities into the Iomart group.
“With high levels of cash on our balance sheet, a compelling offering, and strong ongoing customer relationships, we are confident in the ongoing health of the business.”
Last month, the firm announced that Angus MacSween, one of Scotland’s longest serving chief executives, was to leave the top post.
Donovan, who joined the group as chief operating officer in March, as part of the board’s succession planning, assumed the role of chief executive from the start of October.
MacSween will remain as a non-executive director for up to 12 months to “oversee a smooth transition and handover” to Reece.
MacSween said: “The appetite for cloud computing has grown considerably since we purchased our first data centres in 2007, and yet the market is still only in its infancy.
“Over the years, the business has navigated all kinds of challenges and events and has been able to prosper throughout.”
“This has been due, in no small part, to the hard work of the whole iomart team since inception. I would like to thank everyone that has played a part in enabling Iomart to be the great business it is today and I look forward, in my new role, to helping Reece continue drive the company forward.”
Chairman Ian Steele added: “I’d like to thank Angus for the truly outstanding contribution he has made to the success of iomart during his 22-year tenure. Having founded the business in 1998, Iomart has grown into one of the UK’s largest providers of managed cloud computing services.”