Glasgow cloud computing firm Iomart could see coronavirus boost

Source:-scotsman.com

Iomart, the Glasgow-based cloud computing and web hosting company, has seen “minimal change” to its business levels amid the coronavirus pandemic and expects some customers to experience an increase in demand for their products and services.

Releasing a trading update to investors, the firm said it expects to deliver another year of revenue growth, strong profitability and cash generation. Due to the timing of its year end, 31 March, the group has experienced “minimal impact” on trading from the early effects of Covid-19.

On the outlook for the current financial year, the group noted: “At the time of this announcement, we have seen minimal change to our business levels, and we take great comfort from the resilience of our business model, especially the diversity and limited concentration of our customer base.

“We are not significantly exposed to industries that are suffering the worst effects. The vast majority of our customers are trading or operating online and may experience an increase in demand for their products and services over the coming months.

“While uncertainty exists over how calendar 2020 will unfold, with some IT investment decisions likely to be delayed in the short-term, it is clear that technology and the cloud will not lose relevance and indeed the situation we are all facing perhaps reinforces the journey to the cloud.

“However, the eventual impact on our customer base remains an unknown at this time. We continue to monitor the situation closely as it develops and will provide a further update on trading at the time of the release of our audited financial results.”

For the year to 31 March 2020, Iomart expects to report revenue of about £112 million, up from £103.7m, adjusted underlying earnings of some £43m, compared with £42.2m the year before, and adjusted profit before tax of £22.5m, a slight drop on the £25.5m banked previously.

The mix in revenue in the year and increased investment mainly on the sales front has resulted in a lower adjusted operating profit margin of about 22 per cent, down from 25.7 per cent, the firm added, though that remains higher than the industry average.

Chief executive Angus MacSween said: “At this time, our priority is to see our staff and all our customers through this emergency situation as unscathed as possible. I am proud of how the team have responded and how well our business continuity has functioned.

“While we may potentially see an impact on our customer base and trading in the coming months, overall the group benefits from high levels of recurring revenue, strong levels of cash generation, a strong balance sheet and a wide and large customer base.”

Iomart revenues jump after investment in sales arm
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