Research on Gamma Communications PLC (GAMA:LON) from Progressive Equity Research
Gamma has today delivered strong headline figures for FY25 with revenue and adjusted EBITDA growth of 11% and 13%, driven by Germany and underpinned by resilient organic performance. Germany is showing strong growth and is well positioned to gain from cloud adoption catch-up. Gamma remains a resilient and highly cash-generative business, with the one-off UK gross profit headwinds from PSTN switch-off and ethernet pricing pressure at renewals ending in FY27, and mitigated by the recent restructuring. Management anticipates FY26 in line with market expectations. We leave our FY26 forecasts materially unchanged and introduce FY27 estimates. The market valuation, a prospective PER of 9.3x, appears not to reflect the cash generation, resilience and growth opportunity within Gamma.