iomart Group Profits From Rapid Growth in Cloud Computing

A 36% rise in revenues has helped cloud computing and managed hosting services company iomart Group plc (AIM: IOM) report a 105% increase in profit after tax of GBP 1.0m (H1 2010: GBP 0.5m(2)) in its half yearly results to September 30 2010.

Angus MacSween, CEO, iomart Group stated: "In the first half of the financial year we continued to successfully grow both the size and quality of our customer base. iomart is one of the very few, trusted UK providers of complex hosting services and this has led to exceptionally low churn and high recurring revenues from existing and new customers."

"We're very pleased with the progress we've achieved during the first half of the year, with all of our hosting brands performing well over the period. All brands have continued to innovate in their respective markets and have focused on improving quality of service and customer retention, in line with the Group's strategy of becoming the UK's foremost managed hosting provider."

Having reached an inflexion point last year, the Group continues to trade profitably.

"We've seen a significant increase in our EBITDA profitability in our existing operations, and we expect this to be further accelerated by our acquisition of Titan Internet post period."

iomart Group acquired Essex based managed hosting company Titan Internet Limited for GBP 4.2 million at the end of October. The Group expects the acquisition to be immediately earnings enhancing before the one off costs of integration synergies.

The Group also revealed that its corporate hosting arm, iomart Hosting, has organically increased its customer base by 50% and that much of this growth is attributable to cloud services.

Angus MacSween stated: "Cloud computing is definitely proving to be a game changer in the way that organisations are viewing their IT service delivery. We are witnessing a paradigm shift away from traditional on premise models to the cloud, but for many organisations the move to the cloud will prove challenging and a whole host of technical and business process issues will need to be addressed for a successful migration."

"Increasingly organisations will turn to suppliers that have the proven technical skills, infrastructure and tools to help them develop the processes that will keep them in control of their IT, thus fully delivering the maximum benefits that the cloud undoubtedly offers."

"Our strategy is simple. We have a highly experienced and innovative technology team and we are currently using all the flavours of virtualisation technologies to develop 'private and hybrid clouds' for mission critical applications which we provide under our 100 percent uptime guarantee. Using our multiple data centres we can provide an enviable level of resilience and backup/disaster recovery options, all of which gives us a tremendous head start in this embryonic marketplace."

"In addition to our organic revenue growth, we're especially delighted at the levels of additional business that we are gaining from our brands' existing customer base. Our range of high quality services combined with investment in technological innovation means we believe we are very well positioned to continue to deliver strong growth."

NOTES TO EDITORS

iomart Group plc

("iomart" or the "Group")

Half Yearly Results

iomart Group plc (AIM: IOM), the cloud computing and managed hosting services company, is pleased to report its half yearly results for the period ended 30 September 2010.

FINANCIAL HIGHLIGHTS

 -- Revenue up 36% to GBP 11.4m (H1 2010: GBP 8.4m)

-- EBITDA(1) up 222% to GBP 2.7m (H1 2010: GBP 0.8m)

-- PAT up 105% to GBP 1.0m (H1 2010: GBP 0.5m(2))

-- Net cash at end of period of GBP 5.3m (H1 2010: GBP 4.5m)

OPERATIONAL HIGHLIGHTS

-- Acquisition of Titan Internet Limited for GBP 4.2m in October 2010

-- iomart Hosting customer base increased by over 50% with substantial increase in cloud solutions

-- RapidSwitch adds virtualised dedicated server to product range

-- Easyspace sees improvement in customer retention and increase in average revenue per user

-- Netintelligence receives prestigious award for successful delivery of Universal Home Access project

(1) EBITDA means earnings before interest, tax, depreciation, amortisation, acquisition costs and share based payments

(2) before exceptional gain of GBP 1m and related costs of GBP 135k on reduction of deferred consideration on business combination