iomart Group shoots for the skies as it profits from cloud hosting strategy

Managed hosting and cloud computing service company iomart Group plc has today announced its full-year results, reporting impressive customer and revenue growth, a strong balance sheet, significant adoption of cloud hosting services and the securing of a £10M acquisition war chest.

A 55% increase in revenues, a doubling of hosting customers together with a £3.9M positive cash flow has helped managed hosting and cloud computing business iomart Group plc through the ‘tipping point’ into monthly recurring profitability. 

The Group has today revealed an adjusted* EBITDA profit of £3.1M (loss of £0.3M 2009) on increased revenues of £18.3M (£11.8M 2009) in its final results to March 31 2010. 

With all of the Group’s businesses having performed well, Easyspace and RapidSwitch both delivering strong profits and cash, it is the corporate serving managed hosting division that has driven much of the organic growth. Over 300 new orders have been won during the year, with over half of them coming from new customers, many using cloud services, whilst existing customers continue to generate substantial levels of additional business. 

The cloud hosting market is forecast to experience huge growth over the next few years, reaching $100BN by 2016 and the Group is extremely well placed to take advantage of the market opportunity this presents, having developed and released a proven portfolio of cloud services during the year. 

The results show that the Group’s strategy of investing in its own data centre and network to service its core hosting businesses is now underpinning its success, as it aims to become recognised as the UK’s foremost managed and cloud hosting company. 

Angus MacSween, CEO of iomart Group plc, said: “The Group has now reached a level of operational maturity, with more credibility and with a growing reputation for good service. We are operating in a fast growing market where customers are looking to outsource their web facing infrastructure to a trusted supplier. We intend to be the UK leaders in this market.” 

“The combination of our acquisition of RapidSwitch, the launch of virtualservers.com and the release of our cloud hosting services has enhanced our ability to provide the full spectrum of managed hosting services to any type of customer in any vertical market, who demands and expects 100% uptime.” 

The Group has also revealed that its bank, Lloyds, has agreed to an initial acquisition facility of £10M.

Angus MacSween stated: “At a time when the lack of availability of debt finance is a constant topic of debate in the corporate world, this arrangement demonstrates the belief that our bank has in us, in terms of both our business model and our ability to deliver. We shall pursue opportunities to add complementary cash generative managed hosting businesses to the Group’s portfolio for the benefit of our employees, customers and shareholders. “ 

“I am personally delighted to be able to present such a strong set of financial results, especially in the face of particularly demanding economic conditions. We have excellent forward visibility of our revenues and we can look forward with excitement to delivering another year of growth and enhanced profitability.”

NOTES TO EDITORS

 Final Results for the year ended 31 March 2010

iomart (AIM:IOM), the managed hosting and cloud computing services company, is pleased to report its consolidated final results for the year ended 31 March 2010.

Financial Highlights

Adjusted * EBITDA of £3.1m (2009: loss of £0.3m)Revenue growth of 55% to £18.3m (2009: £11.8m)Cashflow from operations of £3.9m (2009: £0.3m)Earnings per share from continuing operations of 2.12p (2009: negative earnings per share of 1.95p)Dividend up 33% to 0.4p per share (2009: 0.3p per share)Initial acquisition facility of £10m provided by Lloyds Banking Group

 Operational Highlights

Robust demand in internet usage and cloud computing ensuring high visibility of recurring revenuesInflexion point reached such that future sales will contribute high levels of profitabilityiomart Hosting customer base more than doubled in size since March 2009RapidSwitch integrated into Group and operations completely migrated into own datacentre in Maidenhead

Angus MacSween, Chief Executive Officer commented: “We are now more established, with more recognition of our presence in the market and with a growing reputation for excellent service. We are also in a fragmented and fast growing market where more and more companies are looking to outsource their web facing infrastructure to a trusted supplier. We intend to be leaders in that market. We look forward to another exciting year of delivering significant growth and profitability.”

 * Throughout this statement adjusted EBITDA for March 2010 is earnings before interest, tax, depreciation and amortisation (EBITDA) before share based payment charges and gain on reduction of deferred consideration and for March 2009 is EBITDA before share based payment charges.