Cloud computing company iomart (IOM) issued its final results for the year ended March 31, 2024 (FY24), detailing significant growth in revenue and cash generation.
iomart's revenues increased by 10% to a record £127.0m from £115.6m in FY23, supported by 2 acquisitions during the period. Cloud managed services revenue, the largest component of the group, incrased by 17% to £75.2m, driven by 3% organic growth and c. £8.9m revenue contribution from IOM's latest 3 acquisitions.
Group adjusted EBITDA margin decreased slightly to 29.7% from 31.3% in FY23, reflecting the change in revenue mix and timing of inflationary price adjustments during the period. The changing mix was less impactful at the adjusted EBIT margin level which stayed flat at c. 15%.
Adjusted profit before tax showed modest growth of 1% as interest expenses rose by £1.4m due to higher interest rates in FY24. Cash generation was strong with a cash conversion ratio of 97% from 94% in FY23.
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iomart marks another year of growth, supported by 2 acquisitions - Extrinsica and Accesspoint - and 17% higher revenues in cloud managed services, the main focus of its commercial and product strategy. IOM saw double-digit growth in orders, supported by an increase in average order value and a higher number of new customer wins. The group delivered 10% total revenue growth, good profitability, and continued strong cash generation with a conversion ratio of 97%, a testament to its business model and focus on cash.
Adjusted EBITDA grew by 4% to £37.7m with adjusted profit before tax of £15.0m, being flatter due to a £1.4m increase in finance costs associated with higher interest rates. The ongoing change in revenue mix resulting from its pivot toward cloud managed services has prompted IOM to increasingly focus on adjusted EBIT, which rose by 9% during the period to £19.2m.
Despite investing £21.7m (FY23: £21.2m) into its datacentres, network, and acquisitions, IOM's year-end net debt only increased by 6% to £42.3m (FY23: £39.8m). This represents a comfortable net debt to adjusted EBITDA ratio of 1.1x.
Momentum has continued post-period with the first 2 months of the new financial year being in line with management expectations, consistent with IOM's high recurring revenue business model, giving it good visibility. IOM advised that FY25 revenues would likely be H2-weighted.
Looking ahead, the group's robust balance sheet, strong cash generation, and proven success in acquisitions provides a solid foundation for further growth and its continued pivot to cloud managed services and security/cyber/data protection services.
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