Telecommunications business Gamma Communications Plc said on Tuesday that it had made "good strategic progress" in the first-half of the year, with margin improvement, strong cash generation and continued momentum across its European operations, leading it to raise its full-year guidance.
Gamma said revenues rose 4% year-on-year to £245.0m in the six months ended 30 June, driven by a 14% increase in European sales and a 3% uplift in UK indirect revenue. UK direct revenue slipped 2%, reflecting softer enterprise demand and a shift in product mix.
Adjusted underlying earnings climbed 8% to £54.0m, with margins expanding by 90 basis points to 22.0%. Pre-tax profits rose 9% to £35.0m, while diluted earnings per share advanced 10% to 27.4p. Free cash flow increased 13% to £38.0m, supporting a 10% hike in Gamma's interim dividend to 5.5p per share.
The FTSE 250-listed group highlighted that its European business continued to scale, with strong growth in Germany and Spain offsetting slower performance in the Netherlands. It also added that its UK indirect channel remained resilient, with partner numbers and product penetration both increasing.
Gamma now expects FY adjusted EBITDA to be "slightly ahead" of previous guidance, with FY revenues seen in line with expectations.
Chief executive Andrew Belshaw said: "Gamma has achieved another strong set of results. Our German business, bolstered by our recent acquisitions (Starface and Placetel) has performed particularly strongly, while the performance in the UK has been resilient in spite of a continuing challenging macroeconomic backdrop for SMEs.
As of 0850 BST, Gamma Communications shares were up 9.96% at 1,170p.
Reporting by Iain Gilbert at Sharecast.com