LONDON: iomart Group plc (AIM: IOM) on Wednesday posted a 13% rise in annual revenue to £143.5 million, driven by contributions from acquisitions and six months of trading from Atech, which saw unaudited annual revenue growth of 27%.
Despite topline growth, the secure cloud services provider swung to a statutory loss before tax of £53.2 million for the year ended March 31, 2025, from a profit of £8.7 million the previous year. The loss reflects a £52.9 million non-cash goodwill impairment.
Recurring revenue slipped to 89% from 91%, while adjusted EBIT dropped 33% to £12.8 million, with margin narrowing to 8.9% from 15.1%, impacted by an evolving revenue mix and higher VMware licence amortisation.
Adjusted profit before tax fell by more than half to £6.5 million, with earnings also hit by increased interest charges linked to the Atech acquisition. Adjusted diluted EPS dropped to 3.4p from 9.8p.
Cash generation from operations declined 26% to £27.2 million, while net debt surged to £101.9 million from £42.3 million, driven by the acquisition outflow. Post-year end, iomart secured a new £115 million revolving credit facility with a two-year term.
The company said it would not pay a final dividend but aims to restore shareholder returns when profitability and debt levels improve.
Operationally, iomart reported £20 million in annualised recurring order bookings, excluding Atech, versus £16.5 million in FY2024. The firm deepened strategic partnerships with Microsoft, Broadcom VMware and Commvault, achieving Azure Expert MSP status and all six Microsoft solution partner designations.
For FY2026, the Board said it expects to realize annualised cost savings of around £4 million, with around 40% of savings actioned in Q1. Trading in Q1 was in line with expectations, supported by positive net order bookings and improved stability in cloud managed services.
Richard Last, Executive Chair commented, “The year has been one of both challenge and transformation for iomart. The Group’s trading performance was mixed, with customer churn impacting revenue and profits. On the positive side we have seen good order bookings growth in the year, which gives the Board confidence in achieving our medium-term growth strategy.
“The acquisition of Atech during the year was a significant milestone, substantially enhancing the Group’s scale, credibility, and capabilities in public cloud and security. Since acquisition, Atech has delivered revenue growth and profitability in line with our expectations, reinforcing the value of this strategic move.
“Our focus for FY26 will be to improve the operating efficiency of the Group, address churn in our self-managed and private cloud customer base, increase sales momentum in high-growth service areas, including providing Atech with the support to flourish, and to reduce our level of debt. The Board is committed to delivering disciplined execution, operational efficiency, and improved value for shareholders.”
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