Gamma Communications Plc said in an update on Tuesday that it expects to report full-year 2025 adjusted EBITDA and fully diluted adjusted earnings per share in line with market expectations, supported by material year-on-year growth and a strong contribution from its recent German acquisitions.
The FTSE 250 company said adjusted EBITDA was expected to fall within the current sell-side consensus range of £140m to £143m, with adjusted earnings per share of 93.6p to 95.4p, based on analyst estimates as at 12 January.
It reported continued healthy cash generation over the year, enabling rapid deleveraging despite significant capital returns and acquisition activity.
Net debt stood at £9.4m as at 31 December, compared with net cash of £153.7m a year earlier, after the £152.2m acquisition of Starface in February last year, £45.1m of share buybacks completed in the first half of the year and dividend payments totalling £18.9m.
Gamma said liquidity remained strong, supported by a £130m multicurrency revolving credit facility, of which £97m was undrawn at the year end.
Following a review of its capital structure and cash generation, the board announced plans to return up to £85m to shareholders through share buybacks over the next two financial years.
That included a £42.5m buyback programme to be executed in 2026 and an intention to launch a further £42.5m programme in 2027, subject to shareholder authorities.
In addition, the board said it intended to maintain the dividend per share at 2025 levels for the next two years, with payments continuing to be split one-third interim and two-thirds final, starting with the interim dividend to be declared alongside the 2026 interim results in September.
"Gamma expects to report another good set of results, underpinned by strong growth in Germany, and despite the challenging UK macroeconomic backdrop," said chief executive Andrew Belshaw.
"Following a review of the company's capital structure, liquidity and cash generation, in addition to the dividend, the board intends to return up to £85m to shareholders by way of share buybacks during 2026 and 2027.
"This balances investment in growth with enhanced shareholder returns."
Belshaw also said that while the UK market faced headwinds, including the PSTN switch-off in early 2027, Gamma's increased scale in Germany, expanded product portfolio and high levels of recurring revenue left it "well for years to come".
Separately, Gamma said it had appointed Investec Bank to manage the £42.5m share buyback programme, which would run until the earlier of completion or 31 December 2026, subject to shareholder limits.
Shares repurchased under the programme could be cancelled or held in treasury to meet obligations under employee share schemes, and the company noted that there was no guarantee the programme would be completed in full.
The company also announced the appointment of Chris Jagusz as an independent non-executive director with effect from 9 February.
Jagusz has more than 35 years' experience in the telecommunications and technology sectors, including senior roles at BT Group and as chief executive of Redcentric.
"We have known Chris for several years and I am delighted that he has chosen to join Gamma's board," said non-executive chair Martin Hellawell.
"He brings extensive experience of working with technology-enabled businesses, together with a strong strategic perspective."
Gamma said it expected to publish its full-year results for the year ended 31 December on 24 March.
At 1040 GMT, shares in Gamma Communications were up 5.38% at 930.49p.
Reporting by Josh White for Sharecast.com.