24 July 2025
iomart Group plc
("iomart" or the "Group" or the "Company")
Final Results
iomart (AIM: IOM), the secure cloud services company, reports its final results for the year ended 31 March 2025 (FY2025).
FINANCIAL HIGHLIGHTS
|
| FY2025 | FY2024 | Change |
| Revenue | £143.5m | £127.0m | +13% |
| % of recurring revenue1 | 89% | 91% | -2pp |
| Adjusted EBITDA2 | £34.3m | £37.7m | -9% |
| Adjusted EBIT3 | £12.8m | £19.2m | -33% |
| Adjusted profit before tax4 | £6.5m | £15.0m | -57% |
| (Loss)/profit before tax | (£53.2m) | £8.7m | n/a |
| Adjusted diluted EPS5 | 3.4p | 9.8p | -65% |
| Basic EPS | (49.0p) | 5.8p | n/a |
| Cash generation from operations | £27.2m | £36.6m | -26% |
| Proposed final dividend per share | - | 3.0p | n/a |
| Net debt | £101.9m | £42.3m | 152% |
| · | Acquisitions completed in FY24 and the contribution of 6 months of Atech trading delivered overall revenue growth of 13% to £143.5m (2024: £127.0m). |
| · | Atech delivered strong revenue growth on an annual basis of 27% (unaudited), driven by the continued expansion of services within its existing customer base. |
| · | iomart cloud services revenue declined 7%, mainly due to previously reported churn in self-managed and certain private cloud managed services. Growth from new customer wins and increased spend from existing customers helped offset some of the impact. |
| · | Group adjusted EBIT reduced to £12.8m (2024: £19.2m), a margin of 8.9% (2024: 15.1%) reflecting evolving revenue mix and increase in VMware license amortisation expense. |
| · | Adjusted PBT reduced to £6.5m (2024: £15.0m) reflecting reduction in adjusted EBIT and the higher interest charges on bank debt post the Atech acquisition. |
| · | Statutory loss before tax impacted by exceptional non-cash goodwill impairment charge of £52.9m resulting in a loss before tax of £53.2m. |
| · | Good cash generation, with an adjusted EBITDA to operating cash flow (before exceptional items) conversion ratio of 85% (2024: 100%). As previously reported six larger vendors payments overlapped the opening position, with an impact of around £2.5m, thus a more normalised basis of cash flow from operations would result in a conversion ratio of around 93% in both years. |
| · | Net debt increased to £101.9m (31 March 2024: £42.3m) following the cash outflow of approximately £57m associated with the acquisition of Atech, representing a proforma net debt leverage ratio of c. 2.7 times (FY24: 1.1 times) or 2.3 times (excluding IFRS lease liabilities of c. £18m). |
| · | New £115m revolving credit facility agreed post year end, with a two-year term to 30 June 2027 and covenants reflecting current leverage levels and plans for the future. |
| · | The Board believes it is in the best interest of shareholders to forego the payment of a final dividend, with future dividends restored based on improved operating profitability and a reduced overall level of indebtedness. |
OPERATIONAL HIGHLIGHTS
| · | iomart cloud services order bookings for recurring revenue activity in the year, excluding any Atech contribution, grew strongly, totalling £20 million in annualised recurring revenue (FY24: £16.5 million proforma equivalent). |
| · | Atech acquisition completed on 1 October 2024, significantly strengthening the Group's public cloud and security proposition. |
| · | Consolidation of marketing, sales, sales operations and pre-sales technical teams into one group under the leadership of the Group's Chief Revenue Officer, working closely with the business unit leaders of Atech and iomart |
| · | Deepening of the Group's strategic alliances with Microsoft, Broadcom VMware and Commvault, including achieving Azure Expert MSP status and obtaining the final Microsoft solution partner designation to now hold all six designations. These continued achievements make iomart Group one of the most accredited MSP partners in the UK. |
OUTLOOK
| · | Actions taken to deliver annualised cost savings of around £4m, with the benefits becoming visible in H2 FY2026. Approximately 40% of the anticipated savings identified and actioned in Q1 FY2026. |
| · | Improved Cloud managed services net order bookings have provided a more stable start to the FY26 year. |
| · | Q1 trading was in line with the Board's expectations, recognising that cost reductions are more H2 weighted. Full year effect of net churn in FY25 will impact run-rate into FY26 but Q1 has achieved positive net order bookings. |
| · | The Board is reviewing further medium-term opportunities to enhance efficiency and reduce the cost base and debt position, including a review of the Group's data centre footprint and the expansion of its Indian offshoring operations. |
| · | While mindful of macroeconomic uncertainty, the market dynamics around the IT cloud landscape continue to validate the Group's strategic direction and reinforce the Board's confidence in iomart's ability to grow and develop. |
Richard Last, Executive Chair commented,
"The year has been one of both challenge and transformation for iomart. The Group's trading performance was mixed, with customer churn impacting revenue and profits. On the positive side we have seen good order bookings growth in the year, which gives the Board confidence in achieving our medium-term growth strategy.
"The acquisition of Atech during the year was a significant milestone, substantially enhancing the Group's scale, credibility, and capabilities in public cloud and security. Since acquisition, Atech has delivered revenue growth and profitability in line with our expectations, reinforcing the value of this strategic move.
"Our focus for FY26 will be to improve the operating efficiency of the Group, address churn in our self-managed and private cloud customer base, increase sales momentum in high-growth service areas, including providing Atech with the support to flourish, and to reduce our level of debt. The Board is committed to delivering disciplined execution, operational efficiency, and improved value for shareholders."
STATUTORY EQUIVALENTS
A full reconciliation between adjusted and statutory profit before tax is contained within this statement. The largest item is the current year £52.9m non-cash goodwill impairment charge relating to the iomart Cloud Services Cash Generating Unit ("CGU"). This non-cash charge has no impact on the Group's operational performance or cash flows but does result in a large statutory loss before tax of £53.2m in the year to 31 March 2025.
Notes:
1 Throughout this statement Recurring revenue is the revenue that repeats either under long-term contractual arrangement or on a rolling basis by predictable customer habit. % of recurring revenue is defined as Recurring Revenue (as disclosed in note 3) / Revenue (as disclosed in the consolidated statement of comprehensive income)
2 Throughout this statement Adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) is earnings before interest, tax, depreciation and amortisation (EBITDA) before share-based payment charges, acquisition costs, goodwill impairment charge exceptional non-recurring costs. Throughout these financial statements acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
3 Throughout this statement Adjusted EBIT is earnings before interest and tax (EBIT) before amortisation charges on acquired intangible assets, share-based payment charges, acquisition costs, goodwill impairment charge and exceptional non-recurring costs. Throughout these financial statements acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
4 Throughout this statement Adjusted profit before tax is profit before tax, amortisation charges on acquired intangible assets, share-based payment charges, acquisition costs and exceptional non-recurring costs.
5 Throughout this statement adjusted diluted earnings per share, as disclosed in note 7, is earnings per share before amortisation charges on acquired intangible assets, share based payment charges, acquisition costs and exceptional non-recurring costs and the taxation effect of these /weighted average number of ordinary shares - diluted (as disclosed in note 7).
6Throughout this statement Gross profit margin % is defined as Gross Profit / Revenue as a % (both as disclosed in the consolidated statement of comprehensive income)
7Throughout this statement Adjusted EBITDA margin % is defined as adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
8Throughout this statement Adjusted EBIT margin% is defined as adjusted EBIT / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
9 Throughout this statement EBIT is earnings before interest and tax
10 Throughout this statement Order booking value being the annual revenue value of the customer order at the time of booking, as opposed to the total contract value or the actual revenue realised in the reporting period, which will be influenced by the timing of order booking and the billing commencement date.
11 Net Debt is disclosed on note 11 and is the total of bank revolver loan, lease liabilities and cash and cash equivalents. This includes £18m of lease liabilities at 31 March 2025.
12 Proforma net debt leverage ratio is defined as Net Debt (as disclosed on note 11) / Adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) along with 6 months of pre-acquisition Adjusted Atech EBITDA being earnings before interest, tax, depreciation, amortisation, acquisition related costs, non-recurring items and other costs particular to Atech's previous ownership structure.
13 Throughout this statement (loss)/profit before tax margin % is defined as (loss)/profit before Tax / Revenue (both as disclosed in the consolidated statement of comprehensive income) as a %
14 Throughout this statement Adjusted profit before tax margin % is defined as adjusted profit before tax / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
For further information:
| iomart Group plc | Tel: 0141 931 6400 |
| Richard Last, Executive Chair | |
| Scott Cunningham, Chief Financial Officer
| |
| Investec Bank PLC (Nominated Adviser and Broker) | Tel: 020 7597 4000 |
| Patrick Robb, Virginia Bull, James Smith | |
| | |
| Alma Strategic Communications | Tel: 020 3405 0205 |
| Caroline Forde, Hilary Buchanan, Kinvara Verdon | |
About iomart Group plc
iomart Group plc (AIM: IOM) is one of the UK's leading providers of secure cloud managed services, simplifying the complexities of modern technology for businesses, with the majority of Group revenue derived from the UK. Our team of 650+ experts deliver cutting-edge solutions in cloud infrastructure, modern workplace management, and managed security services that enable our customers to innovate, protect, and scale their businesses.
We proudly hold one of the UK's most extensive sets of Microsoft credentials, including Azure Expert MSP, six Solution Designations, and membership in Microsoft's Intelligent Security Association (MISA). As well as being a top-tier Broadcom Pinnacle Partner for VMware Cloud. Which means we can bring the latest technologies in hybrid cloud, data protection, and cyber resiliency to meet the evolving needs of our customers.
For further information about the Group, please visit www.iomart.com
CHAIR'S STATEMENT
I am pleased to present my first report to shareholders since being appointed Chair of iomart Group plc ("iomart or Group") on 12 June 2024. The year to 31 March 2025 has been one of both challenge and transformation for iomart. The Group's trading performance, as previously communicated, was mixed with disappointingly higher than anticipated customer churn within our self-managed and private cloud businesses adversely impacting revenue and profits. On the positive side we have seen good order bookings growth in the year, which gives the Board confidence in achieving our medium-term growth strategy.
The acquisition of Atech on 1 October 2024 was a significant milestone, substantially enhancing the Group's scale, credibility, and capabilities, particularly in Microsoft Azure, modern work, and cyber security solutions, which are central to our focus on higher growth areas. Since acquisition, Atech has delivered revenue growth and profitability in line with our expectations, reinforcing the value of this strategic move. Atech has experienced strong growth over the past year, driven by the continued expansion of services within its existing customer base. As part of the iomart Group, Atech now benefits from access to a broader customer network with a high demand for its specialist expertise. Additionally, the company is leveraging the Group's sales infrastructure to accelerate new customer wins.
In response to our reduced profitability, we have taken action to improve the efficiency of our operations thereby reducing our ongoing cost base, including targeted adjustments to our workforce, and improvements to the efficiency of our data centres and supply chain operations. These actions are expected to deliver annualised cost savings of around £4m, with the benefits becoming visible in the second half of FY26. We are also exploring further medium-term opportunities to enhance efficiency and reduce our cost base beyond this first phase, including a review of our data centre footprint and the expansion of our Indian offshoring operations.
Financial performance
Acquisitions completed in FY24 and the contribution of 6 months of Atech trading, saw the Group deliver overall revenue growth of 13% and record revenues of £143.5m (2024: £127.0m). Excluding acquisitions, the core business experienced a revenue decline of 7% year-on-year predominantly due to customer churn in our self-managed and certain private cloud managed services, outweighing new customer wins and increased revenue from existing customers. The resulting mix of revenue weighed heavily on our adjusted EBIT margin, as did the change following Broadcom's acquisition of VMware which saw license amortisation expense increase due to a new £2.9m charge (comparable £1.5m recognised as operating expenses in FY24). As a result, the Group adjusted EBIT reduced to £12.8m (2024: £19.2m) and adjusted profit before tax reduced to £6.5m (2024: £15.0m) reflecting higher interest charges on the bank debt taken on to fund the Atech acquisition.
The statutory results include a £52.9m non-cash exceptional goodwill impairment charge relating to the iomart Cloud Services Cash Generating Unit ("CGU"). This reflects both the shift away from low growth, heritage product areas and the previously disclosed accelerated customer churn in certain areas of this CGU. This non-cash charge has no impact on the Group's operational performance or cash flows but does result in a large statutory loss after tax of £55.1m in the year to 31 March 2025 (2024: £6.4m profit).
The Group's cash generation continued to be strong with an adjusted EBITDA to operating cash flow (before exceptional items) conversion ratio of 85% (2024: 100%). Certain supplier payments overlapped the closing and opening positions, distorting both years somewhat, therefore an average of the two years of 93% is more representative. This is a strength of the business, as has been demonstrated for more than a decade, and is testament to the Group's largely recurring revenue business model.
Net debt increased to £101.9m as at 31 March 2025 (31 March 2024: £42.3m), following the cash outflow of approximately £57m associated with the acquisition of Atech. This represents a proforma net debt leverage ratio of approximately 2.7 times (FY24: 1.1 times) or 2.3 times (excluding IFRS lease liabilities of approximately £18m). Following the year-end, in June 2025, iomart renewed its banking facilities and has put in place a new £115m revolving credit facility with a two-year term to 30 June 2027 and covenants reflecting current leverage levels and plans for the future.
Dividend
An interim dividend of 1.30p per share was paid to shareholders in January 2025. In light of our full-year results and current leverage position, the Board believes it is in the best interest of shareholders to forego the payment of a final dividend, with future dividends to be restored depending on improved operating profitability and a reduced overall level of indebtedness.
Strategy
Our vision remains clear and consistent: to establish iomart as the UK's leading provider of secure hybrid cloud services to our market. The cloud landscape continues to expand rapidly, with customer needs becoming increasingly complex as they seek to harness the latest technologies. iomart, with the acquisition of Atech, is well-positioned to meet this demand, with deep expertise across private, public, and hybrid cloud infrastructures, cyber security expertise, and a comprehensive suite of managed services that support our customers' digital transformation agendas.
People
Our people are at the heart of iomart's success. I would like to thank our talented team for their continued commitment, adaptability and support during a year of challenges and significant change. We also welcome the Atech team, both in the UK and in India, to the iomart Group.
Following the departure of Group CEO, Lucy Dimes, in May 2025, I have assumed the role of Executive Chairman, supported by a strong executive leadership team and an experienced Board. The search for a CEO successor will commence later in the year following a full review of our business growth plans and options.
Outlook
Our focus for FY26 is clear. We intend to improve the operating efficiency of the Group, address churn in our self-managed and private cloud customer base, increase sales momentum in high-growth service areas, including providing Atech with the support to flourish, and to reduce our level of debt. Although it is early days, I am pleased to report that Q1 trading is progressing in line with the Board's expectations, recognising that cost reductions are more H2 weighted. Full year effect of net churn in FY25 will impact run-rate into FY26 but Q1 FY26 has achieved a positive net order bookings.
While we remain mindful of macroeconomic uncertainty, the market dynamics around the IT cloud landscape continues to validate our strategic direction and reinforce our confidence in iomart's ability to grow and develop. The Board is committed to delivering disciplined execution, operational efficiency and improved value for shareholders.
Richard Last
Executive Chair
24 July 2025
OPERATIONAL REVIEW
Sales Momentum
FY25 has been a pivotal year as we transitioned our portfolio, added significant capability, made operational enhancements, and brought a sharper focus to our value proposition.
Order bookings for recurring revenue activity in the year, excluding any Atech contribution, grew strongly, totalling £20 million(11) in annualised recurring revenue (FY24: £16.5 million proforma equivalent). Growth was led by Microsoft related solutions, with demand for the Group's core offerings in managed private cloud and back-up & data protection services providing a stable foundation. These results reflect the initial success of our pivot toward higher-growth cloud segments and our position as a relevant and trusted partner for both existing and new customers. Growth was also strong within our Oriium indirect channel business which currently focuses on data protection via Commvault product solutions. Our ability to extend our indirect channel remains an untapped sales opportunity and one which will see more attention in the next 12 months.
Momentum in order bookings was tempered by accelerated customer churn from legacy self-managed infrastructure, plus some private managed cloud customers. Specifically on the self-managed infrastructure revenue reductions, through our reprioritisation of this customer base, we have lost business with a year-on-year revenue impact of £1.6m from Bytemark and Memset combined customers. These businesses were acquired in 2020 and 2021, respectively. Rapidswitch, the largest of iomart's sub brands in this area, while still seeing revenue declines, was maintained at a consistent level. The segment has now dropped as a proportion of Group revenue from 22.4% to 16.5%. Although the dedicated server market remains under pressure, we continue to explore opportunities to mitigate the rate of decline in this segment. This includes more dedicated sales focus on the wider data centre services, which would include Rapidswitch offerings serviced primarily from our Maidenhead site.
Atech Sales Performance
Atech delivered revenue growth to 31 March 2025 of 27% reaching a 12 month revenue position of £40m (unaudited). This growth was across all of the strategic areas of Azure infrastructure, modern workplace and security. Of this revenue, 73% were recurring services, broadly consistent with the prior year. The greatest area of success arose on growing existing customers' revenues at the same time as seeing low levels of customer churn. Given the proximity of the acquisition, this revenue growth had limited benefit as yet from being part of the iomart Group.
Following the Atech acquisition we have consolidated our marketing, sales, sales operations and pre-sales technical teams into one group under the leadership of our Chief Revenue Officer, working closely with the CEO of the Atech business which retains the Microsoft specialist technical knowledge and deployment capabilities. This will ensure we provide a coherent and consistent message to the market, maximise the cross-selling opportunities whilst retaining deep sector specialist knowledge and capabilities.
Enhanced Portfolio & Technology Partnerships
This year we have taken strides to enhance our end-to-end proposition and product portfolio. Our enlarged group and combined capabilities will allow us to compete more effectively in the market with enhanced services, top-tier vendor partnerships, greater scale and references across cloud managed services, modern work, data protection and cyber security, cementing our position as a leading UK secure cloud provider.
FY25 also saw the deepening of our strategic alliances with Microsoft, Broadcom VMware (iomart has Pinnacle Partner status) and Commvault (iomart has Elite MSP Partner status). The Atech team achieved the privileged position of being awarded Azure Expert MSP status, as well as obtaining the final Microsoft solution partner designation to now hold all six. These continued efforts make iomart Group one of the most accredited MSP partners in the UK.
These partnerships not only enhance our go-to-market capabilities but also enable joint innovation and continued initiatives.
Operational Excellence & People
We will continue to invest in systems integration, cost efficiency, and automation to build a more scalable, modern service organisation, whilst recognising that many of our legacy brands can, with renewed support and focus, continue to generate good opportunities for iomart. The investment we have made in streamlining and improving our operations has delivered measurable improvements in customer service around satisfaction scores, 'right first time' deployment and service delivery turnaround times, benefitting customer retention and generating sales opportunities. With the acquisition of Atech we have also expanded our 24/7 service capabilities via our new colleagues in its India operation.
During the year we invested in our first Apprentice Scheme in our service desk function, launched our DEI Council and Women's Network, and upgraded our offices in Glasgow, London and India to support a high-performance culture.
As previously outlined, we have implemented a series of strategic measures aimed at enhancing operational efficiency and reducing our ongoing cost base. These include targeted workforce adjustments, optimisation of our data centre operations, and improvements across our supply chain processes. Collectively, these initiatives are projected to deliver annualised cost savings of approximately £4 million.
In the first quarter of the new financial year, we have already secured around 40% of these anticipated savings. We remain confident that continued progress in the second quarter will enable us to realise the full annualised run rate benefit during the second half of the financial year.
Commitment to ESG and sustainability
We believe that integrating environmental, social and governance ("ESG") considerations across our business enables us to improve customer satisfaction whilst benefiting the environment and society and improving our profitability.
Our ongoing commitment is for iomart to be aligned with UK Government targets and as such we have committed to achieve Net Zero by 2050, or earlier, if possible. We commenced purchasing Renewable Energy Guarantees of Origin ("REGO") certified renewable electricity across our UK data centre estate in 2021, which significantly reduces our carbon emissions. We continue to look at ways to increase the energy efficiency across our UK data centre estate. During FY25 we commenced the replacement of our cooling system in our Gosport data centre which will reduce like for like energy consumption on our cooling requirements on this site by at least 30%.
In terms of our social agenda, we continued our support of the charity SmartSTEMs who organise and host events to inspire and engage young people from underprivileged backgrounds with the range of careers in STEM. This also leverages their partnership with Generation, a company that transforms education to employment systems to prepare, place and support people from disadvantaged backgrounds into careers that would otherwise be inaccessible. We recognise, like many technology companies, that our gender balance in the workplace needs to improve; we have continued our sponsorship of the "Empowering Woman in Leadership" programme which is designed to address the lack of gender diversity in leadership roles across the technology sector.
The Company continues to adopt the Quoted Companies Alliance (QCA) Corporate Governance Code and we have aligned with the updated Code, which was published on 13 November 2023, to be applied to financial years beginning on or after 1 April 2024.
Our operational focus for FY26
Our continued focus in the next year will be on:
Portfolio: We will maximise on the opportunity in high-growth services such as public cloud, modern workplace and cyber security through Atech, and our data protection services in Oriium. We will continue to optimise our private cloud and data centre services offerings within the iomart brand. Our self-managed infrastructure and colocation businesses will be given renewed focus helping to drive data centre utilisation and productivity.
Operational Scalability: We will continue to improve operational and cost efficiencies in our group-wide sales, customer service and delivery functions creating a more scalable, modern service organisation.
Customer Retention & Growth: We will become more visible to our customers, engaging with them proactively to address their existing and future technology requirements. Through our enhanced product and services portfolio, we can support our customers for the long-term.
CHIEF FINANCIAL OFFICER'S REPORT
The past year has presented significant challenges as we continue to reposition iomart in higher-growth segments of the IT services sector. Our focus on transforming our market position and product offering is central to driving sustainable, organic revenue growth. Encouragingly, even before the Atech acquisition, strong order booking trends laid a solid foundation. At the same time, we have taken proactive steps to address margin pressures stemming from shifts in our revenue mix and also customer renewal levels. While the benefits of product realignment and cost optimisation will take time to fully materialise, these actions position us well for a return to revenue and profit growth in FY27 and beyond.
The results include a material £52.9m non-cash exceptional goodwill impairment charge relating to the iomart Cloud Services Cash Generating Unit ("CGU") which prior to the impairment had a carrying value of £83.1m. This goodwill was an accumulation of many acquisitions over the years, including those focussed on the provision of dedicated servers and hosted infrastructure areas in which we are now seeing lower growth and customer churn from more heritage product areas. This non-cash charge has no impact on the Group's operational performance or cash flows but does result in a large statutory loss after tax of £55.1m in the year to 31 March 2025.
As previously reported, the acquisition of Atech on 1 October 2024 has four clear financial benefits to the Group. Firstly, the proportion of Group revenues derived from the growth areas of the cloud market has considerably increased. Secondly, it is anticipated that renewal levels within our existing customer base will stabilise, as there is now a clearer pathway for customers to adopt public cloud and security solutions while remaining with iomart. Thirdly, we have gained access to a high quality offshore operation enhancing scalability and delivery capability, and finally, capital expenditure requirements as a proportion of revenue have decreased, improving the Group's scalability and financial flexibility.
Key Performance Indicators 2025 2024
| Revenue | | | £143.5m | £127.0m |
|
| % of recurring revenue1 | | | 89% | 91% |
|
| Gross profit %2 | | | 49.1% | 54.8% |
|
| Adjusted EBITDA3 | | | £34.3m | £37.7m |
|
| Adjusted EBITDA margin %4 | | | 23.9% | 29.7% |
|
| Adjusted EBIT5 | | | £12.8m | £19.2m |
|
| Adjusted EBIT margin %6 | | | 8.9% | 15.1% |
|
| Adjusted profit before tax7 | | | £6.5m | £15.0m |
|
| Adjusted profit before tax margin %8 | | | 4.5% | 11.8% |
|
| EBIT10 | | | (£46.8m) | £13.0m |
|
| (Loss)/profit before tax | | | (£53.2m) | £8.7m |
|
| (Loss)/profit before tax margin %9 | | | (37.1%) | 6.9% |
|
| Basic earnings per share | | | (49.0p) | 5.8p |
|
| Adjusted earnings per share (diluted) 14 | | | 3.4p | 9.8p |
|
| Cash flow from operations (before exceptional items) / Adjusted EBITDA %12 | 85% | 100% | | ||
| Net debt / Adjusted Proforma EBITDA leverage ratio13 | | | 2.7 | 1.1 |
|
Revenue
Overall revenue from operations increased by 13% to £143.5m (2024: £127.0m). We continued to maintain a high level of recurring revenue at 89% (2024: 91%), with the slight reduction on the prior year, a function of Atech having a higher level of non-recurring revenue activities, including professional services within the area of cyber security. We remain focussed on retaining our high recurring revenue business model with the combination of multi-year contracts and payments in advance providing us with good revenue visibility.
The revenue growth includes contributions from acquisitions, including £21.5m from Atech and a £4.2m revenue benefit from the full-year impact of small acquisitions completed in FY24. Excluding acquisitions, the core business experienced a revenue decline of £9.2m or 7% year-on-year. As previously disclosed, this decline was driven by elevated churn levels among the Group's self-managed customer base and certain private cloud managed services. This is shown more clearly in the disaggregated revenue disclosure below.
In the current year reporting, given the proximity of the Atech acquisition, we have shown Atech revenue as a separate Cash Generating Unit ("CGU") in the segmental reporting. We expect this disclosure will evolve in our reporting over FY26 to align with the finalisation of our operating model and the business unit structures. Retention of historic groupings for our FY25 reporting allows comparability of year-on-year trends and clarity on underlying organic revenues.
iomart Cloud Services
The following is the disaggregation of iomart Cloud Services revenues of £110.0m (2024: £114.6m).
| Disaggregation of iomart Cloud Services revenue | | | 2025 £'000 | 2024 £'000 |
| iomart Cloud managed services (recurring) | | | 76,363 | 75,212 |
| Self-managed infrastructure (recurring) | | | 23,686 | 28,429 |
| Non-recurring revenue | | | 9,949 | 10,937 |
| Total iomart | |
| 109,998 | 114,578 |
iomart Cloud managed services (recurring revenue)
Cloud managed services includes the provision of fully managed, complex, bespoke and resilient solutions involving private, public and hybrid cloud infrastructure. Revenue within cloud managed services increased by £1.2m or 1.5% to £76.4m (2024: £75.2m). This includes the full-year impact of small acquisitions completed in FY24 (Extrinsica on 5 June 2023 and Accesspoint on 5 December 2023) being around £3.4m of revenue benefit meaning underlying organic revenue was a reduction of around £2.2m or 3%.
Our order bookings in this area of the business grew well over the year, as both existing customers and prospects have responded positively to our broader solution set and our re-invigorated focus on customer service. However, as previously reported the run-rate entering FY25 was lower than the previous year and as the year progressed, we also saw some customer losses and lower levels of renewals from some existing customers which, in combination, negated the growth in order bookings. While we enter FY26 with a monthly recurring revenue lower than this time last year, monthly levels have been more stable in the last 6 months and we have a higher order book than this time last year from strong bookings in the last quarter. This gives an improved starting point to support the path to organic growth in this specific area.
iomart self-managed infrastructure (recurring revenue)
The self-managed infrastructure revenue of £23.7m (2024: £28.4m) decreased by £4.7m (reduction in 2024: £1.2m). We have seen organic reductions within this area for a number of years as dedicated servers, being the largest product in this area, is most susceptible to a move to public cloud infrastructure as the customers have retained their own technical IT skills and an infrastructure only service is more transactional. The last 12 months has seen an acceleration of customer churn especially from the long tail of our customer base and also on a disproportionate basis from the smaller acquired brands of Memset and Bytemark as we sought to consolidate platforms and service teams to more resilient core offerings.
As well as being the largest area of revenue reduction impacting the Group, this £4.7m revenue reduction has been very impactful on profitability as this established infrastructure activity attracts an inherently high margin, benefiting from optimised capital deployment and long-term customer durations.
As part of the review and alignment of services to business unit groupings, of the £23.7m of revenue disclosed as self-managed infrastructure approximately £5.6m of customer revenue has been identified as better served within our managed services core team. The largest element being data centre colocation related services which we are seeking to consolidate into a small, focussed team. This change will be reflected in our disaggregated revenue disclosures going forward. As the Group continues its evolution towards a broader portfolio of managed service offerings, the impact of a potential lower level of renewals in the self-managed infrastructure area will decrease.
iomart Non-recurring revenue
Non-recurring revenue of £9.9m (2024: £10.9m) relates primarily to hardware and licence reselling plus professional services / consultancy projects. This includes the full-year impact of the smaller acquisitions completed in FY24 which in combination supported headline revenue by around £0.8m, meaning underlying organic non-recurring revenue reduction was around £1.8m, with a weaker second half for such activity. These non-recurring activities can provide a useful introduction to the wider Group and evolve customers into a higher level of recurring services, but we do not allocate significant sales effort in lead generation for this area and by its very nature we see more variability over shorter periods. Increasing our professional services activity levels is being targeted ahead of simple product reselling but only within the context of this being the up-front work which leads to recurring managed services.
Atech
The following is the split of Atech revenue for the post acquisition 6 months to 31 March 2025 between recurring and non-recurring revenue
| Disaggregation of Atech revenue | | | 2025 £'000 |
| Atech | | | |
| Cloud managed services (recurring) | | | 15,520 |
| Non-recurring revenue | | | 5,943 |
| Total Atech | |
| 21,463 |
Atech (recurring revenue)
Atech recurring revenue for the 6 months to 31 March 2025 post acquisition was £15.5m representing a continuation of strong underlying growth. On a 12 months basis to 31 March 2025 (including 6 months pre-acquisition), recurring revenues increased 18% to £29.3m (unaudited). Atech has a higher customer concentration then pre-existing iomart, with the Top 20 customers being around 80% of the recurring revenue and has experienced strong renewal levels and growth from these existing customers.
Atech (non-recurring revenue)
Atech non-recurring revenue for the 6 months to 31 March 2025 post acquisition was £5.9m which is 28% of the total Atech revenue, being a relatively higher percentage split compared to the pre-existing iomart business. The highest element of this is consultancy projects within cyber security, including with one large financial services customer for which £2.9m revenue was recognised in the six month post-acquisition. Atech has received repeated business from this customer over several years with the current scope of work running to December 2025. It is expected that this contract will continue, the exact scope , scale and timing though will not be determined until later this calendar year. This area of the Atech business has also shown growth since the acquisition, with around £1.2m more revenue compared to the immediate 6 months preceding the acquisition.
Easyspace
Our Easyspace segment has performed relatively well over the year with revenues remaining broadly consistent, with only a £0.5m reduction to £12.0m (2024: £12.5m). The domain name and web hosting business is an area in which we do not invest heavily in but it was pleasing to see a solid performance with a high level of renewals from our base of c56,000 customers. The activity remains highly profitable and cash generative.
Gross Profit
Gross profit in the year, which is calculated by deducting from revenue variable cost of sales such as power, software licences, connectivity charges, domain costs, public cloud costs, sales commission, the relatively fixed operating costs of operating our data centres plus, for non-recurring revenue, the cost of hardware and software sold, increased by £0.9m to £70.5m (2024: £69.6m). In percentage terms, gross margin2 overall reduced on the prior year to 49.1% (2024: 54.8%).
The specific revenue mix as outlined earlier is dilutive on gross margin. The Atech acquisition accelerated this in the second half, significantly increasing Microsoft licence consumption in our customer solutions. As outlined below, offsetting some of these factors is the change in classification on software expenses following the new commercial arrangements with Broadcom VMware which is favourable to gross margin.
Our key vendor relationships have remained stable in the period with any cost increases following more general inflationary trends. Our energy hedging strategy, which we entered into around the end of the calendar year 2022, means we have seen stability in the year although at levels above current spot market rates. During December 2024 we entered into extended energy pricing arrangements which have also now fixed our energy cost for FY26 and FY27.
Adjusted EBITDA3
The Group's adjusted EBITDA decreased by £3.4m to £34.3m (2024: £37.7m) translating to an adjusted EBITDA margin4 of 23.9% (2024: 29.7%). This included a strong six-month EBITDA contribution from Atech of £3.2m being an adjusted EBITDA margin4 of 15.0%.
The lower margin percentage is a function of the gross margin profile, the high fixed cost base nature of our private cloud business activity, the as expected dilutive impact of acquisitions and the administration expenses (before depreciation, amortisation, share based payment charges, acquisition costs and exceptional non-recurring costs) of £36.2m. Administration expenses were £3.0m higher than the previous year due to the inclusion of staff plus overhead costs for the full year from the FY24 smaller acquisitions plus 6 months from the Atech acquisition. Outside of the acquisitions, we have seen a period of relatively stable overall headcount numbers and other overhead costs meaning the underlying administrative expenses are consistent with FY24. We expect administrative expenses to fall in FY26 on a like for like basis as we execute on cost optimisation measures during the year, with the full annualised impact of around £4m expected in FY27 and onwards.
A further unique feature to the current year is the change in income statement classification on software expenses following the new commercial arrangements with Broadcom VMware plus the overall higher cost imposed. Due to the long-term commitments made, these software costs are capitalised and reported as intangible asset amortisation to a value of £2.9m, replacing the previous license consumption cost of sales classification (comparable £1.5m recognised as operating expenditure in FY24).
The iomart Cloud Services segment saw a 17.8% decrease in adjusted EBITDA to £30.2m (2024: £36.7m). In percentage terms the Cloud Services margin decreased to 27.5% (2024: 32.1%) primarily as noted earlier due to both the revenue mix and our business model becoming less capital intensive over time. Atech's EBITDA contribution of £3.2m is a 15.0% of total Atech revenue which given the limited capital expenditure is also very close to its EBIT contribution. The Easyspace segment's adjusted EBITDA was £5.7m (2024: £6.2m) reflecting the relatively more stable revenue performance in the year, which in percentage terms remained strong although dropping somewhat to 47.5% (2024: 49.4%).
Group overheads decreased by £0.4m in the year to £4.8m (2024: £5.2m). These are costs which are not allocated to segments, including the cost of the Board, the running costs of the headquarters in Glasgow, Group marketing, human resource, finance, legal, and professional fees for the year.
Adjusted EBIT5
The Group depreciation charge of £14.7m (2024: £15.7m) fell by £1.0m in the year and as a percentage of recurring revenue is 11.5% (2024: 13.5%). This is the third year in a row in which we have seen this percentage value drop. The Group charge for amortisation of intangibles, excluding amortisation of intangible assets resulting from acquisitions ("amortisation of acquired intangible assets"), increased to £6.8m (2024: £2.8m) due to the reclassification and price increase on the Broadcom VMware licence arrangements of £2.9m plus £0.6m of expansion expenditure for new customer arrangements opened up by our pinnacle partner status with Broadcom. This means that the Group's adjusted EBIT decreased by £6.4m to £12.8m (2024: £19.2m) which in adjusted EBIT margin6 terms translates to 8.9% (2024: 15.1%).
Adjusted profit before tax7
Finance costs of £6.4m (2024: £4.3m) have increased year-on-year by £2.1m due to the £57m bank debt drawn to support the Atech acquisition. The revolving credit facility in place during the year had a borrowing cost at the Group's current leverage levels of 250 basis points over SONIA (2024: 180 basis points).
After deducting the charges for depreciation, amortisation (excluding the charges for the amortisation of acquired intangible assets), exceptional non-recurring costs and finance costs from the adjusted EBITDA, the Group's adjusted profit before tax decreased to £6.5m (2024: £15.0m), representing an adjusted profit before tax margin8 of 4.5% (2024: 11.8%).
Earnings before interest and tax and (loss)/ profit before tax
The measure of adjusted profit before tax is an alternative profit measure which is commonly used to analyse the performance of companies particularly where M&A activity forms a significant part of their activities.
A reconciliation of adjusted profit before tax to reported (loss)/profit before tax is shown below:
| Reconciliation of adjusted profit before tax to (loss)/profit before tax | | | 2025 £'000 | 2024 £'000 |
| Adjusted profit before tax7 |
|
| 6,455 | 14,956 |
| Less: Amortisation of acquired intangible assets | | | (4,902) | (4,226) |
| Less: Acquisition costs | | | (1,674) | (1,010) |
| Less: Share-based payments | | | (198) | (517) |
| Less: Administrative expenses - exceptional non-recurring costs | | | - | (462) |
| Less: Exceptional non-cash goodwill write-off | | | (52,900) | - |
| (Loss)/profit before tax | |
| (53,219) | 8,741 |
The adjusting items in the current year are:
· charges for the amortisation of acquired intangible assets of £4.9m (2024: £4.2m). Acquired intangible assets have increased by £0.7m due to the Atech acquisition;
· acquisition costs of £1.7m (2024: £1.0m) which includes £0.9m of professional fees associated with the Atech acquisition;
· share-based payment charges of £0.2m (2024: £0.5m), the lower charge driven by the number of forfeited options in the year; and
· exceptional non-cash goodwill impairment charge of £52.9m which was recognised within the Cloud Services segment. This followed an impairment review triggered by the loss of customers, a decline in segment profitability during the year to 31 March 2025, and the decline in the share price.
After deducting these items from the adjusted profit before tax, the reported loss before tax was £53.2m (2024: £8.7m profit).
Earnings before interest and tax ("EBIT") in the year was a £46.8m loss (2024: £13.0m profit), the decrease consistent with the Adjusted EBIT5 movement and the large exceptional non-cash goodwill write off.
Taxation
The tax charge for the year is £1.9m (2024: £2.3m). The tax charge for the year is made up of a corporation tax charge of £0.6m (2024: £2.7m) with a deferred tax charge of £1.3m (2024: credit of £0.4m). The effective rate of tax or the year is (0.04%) (2024: 26%). In the current year, the headline effective tax rate is heavily distorted by the large number of non-taxable charges in the year, especially the goodwill non-cash impairment, plus the net impact of revisions to cumulative brought forward positions on capital allowance pools, making the effective tax rate in the current year somewhat redundant as a disclosed metric. As a predominately UK business our underlying tax rate mirrors the UK corporation tax rates.
Loss for the year
After deducting the tax charge for the year from the loss before tax the Group has recorded a loss for the year of £55.1m (2024: £6.4m profit).
Earnings per share
The calculation of both adjusted earnings per share and basic earnings per share is included at note 7.
Basic earnings per share from continuing operations was 49p loss (2024: 5.8p profit). This negative position is driven by the £52.9m exceptional non-cash goodwill impairment charge.
Adjusted diluted earnings per share11, based on profit for the year attributed to ordinary shareholders before amortisation charges of acquired intangible assets, acquisition costs, share-based payment charges, exceptional non-recurring costs, and the tax effect of these items was 3.4p (2024: 9.8p), a reduction of 65%. This reduction is driven by the lower adjusted profit before tax plus the unfavourable impact of the prior period deferred tax adjustments.
Dividends
Our dividend policy, which has been in place for several years now, is based on the profitability of the business in the period measured with reference to the adjusted diluted earnings per share we deliver in a financial year. For the last few years, we have been paying dividends at the maximum level allowed by our stated policy. The current policy is a maximum pay-out of 50% of adjusted diluted earnings per share.
The Directors are proposing not to declare a final dividend (2024: 3.00p) reflecting the higher level of indebtedness in the Group following the Atech acquisition and reduced profitability in the current year. As a result, for the current year the total dividend will consist of the interim dividend of 1.3p paid in January 2025 (2024: 4.94p total of interim and final combined).
Acquisitions
Atech
We completed the acquisition of Kookaburra Topco Limited, the holding company of Atech Support Limited ("Atech") on 1 October 2024 for a total enterprise valuation of £57m, on a cash free, normalised working capital and debt free basis under a locked box completion mechanism. The final consideration paid included £6.2m of debt repayments and a balance of £51.7m paid to the previous shareholders. The full purchase price was financed through a combination of existing bank facilities and cash on the Company's balance sheet. There is no deferred or contingent consideration.
Cash flow and net debt
Net cash flows from operating activities
The Group continued to generate high levels of operating cash over the year. Cash flow from operations was £27.2m (2024: £36.6m) which represents an 80% conversion12 of adjusted EBITDA (2024: 97%) or 85% of adjusted EBITDA to operating cash flow (2024; 100%) (before exceptional items). In the current year this has been impacted by the exact timing of payments to six larger vendors which overlapped the opening and closing period ends with an impact of around £2.5m being 7% of EBITDA meaning, taking into account both exceptional cash flow items of £1.6m and the specific vendor payments, a more normalised basis of cash flow from operations would result in a conversion ratio of around 93%.
Cash payments for corporation tax in the year were £1.9m (2024: £0.7m), resulting in net cash flow from operating activities in the year of £25.4m (2024: £35.9m).
Cash flow from investing activities
Expenditure on investing activities of £62.2m (2024: £21.7m) was incurred in the year. £8.3m (2024: £9.5m) was incurred on the acquisition of property, plant and equipment, principally to provide specific services to our customers, £2.9m (2024: £2.2m) incurred in respect of development costs and £0.1m (2024: £0.1m) paid in relation to software license arrangements during the period. In the current year, M&A related payments were dominated by the £48.5m of equity consideration paid for the Atech acquisition (net of cash acquired) along with a smaller contingent consideration payment of £0.4m of deferred consideration on a historic acquisition by Atech, such amount being funded as a "debt like" item in the share purchase agreement ("SPA") mechanics plus £2.1m of deferred consideration payments on Extrinsica and Accesspoint acquisitions (2024: £4.2m on Extrinsica and Concepta acquisitions). This compares to a much lower £9.9m on M&A related payments in the prior year.
Cash flow from financing activities
In the current year, loan drawdowns of £57.0m (2024: £7.6m to support the initial equity consideration for the Extrinsica and Accesspoint acquisitions) were made from the revolving credit facility to support the Atech acquisition on 1 October 2024. Payments under long-term intangible asset licence agreements £2.6m (2024: £nil) this being the first year instalment on the Broadcom VMware five year partnership commitments. We also repaid £6.2m of bank loans acquired from Atech at completion. Other than bank loan repayments connected to the completion of acquisitions, we made no bank loan repayments in the year (2024: £2.0m). As a result, the movement in the drawn bank loan of £97.0m (2024: £40.0m) at the year-end consists solely of the £57m drawn to support the Atech acquisition. Cash received in the year from issue of shares was £4k (2024: £7k). We also made dividend payments of £4.8m (2024: £6.1m); paid finance costs of £4.8m (2024: £3.1m and made lease repayments of £4.4m (2024: £5.0m).
Net cash flow
As a consequence of the above component elements and working capital movements in the year, our overall cash position was an outflow of £2.6m (2024: £1.9m inflow) which resulted in cash and cash equivalent balances at the end of the year of £13.1m (2024: £15.8m).
Net Debt
The net debt position of the Group at the end of the year was £101.9m (2024: £42.3m) as shown below, heavily impacted by the M&A-related cash payments of approximately £57m. The net debt position represents a multiple of 2.7 times13 our adjusted proforma EBITDA (2024: 1.1 times) or 2.3 times (excluding IFRS 16 lease liabilities of approximately £18.0m).
|
| | | 2025 £'000 |
2024 £'000 |
| Bank revolver loan | | | 97,000 | 40,000 |
| Lease liabilities | | | 18,006 | 18,091 |
| Less: cash and cash equivalents | | | (13,088) | (15,755) |
| Net Debt | |
| 101,918 | 42,336 |
At the year end, the Group had access to a £125m Revolving Credit Facility ("RCF") provided by a banking group consisting of HSBC, Royal Bank of Scotland, Bank of Ireland and Clydesdale Bank, that matures on 30 June 2026. The RCF had a borrowing cost at the Group's current leverage levels of 250 basis points over SONIA. As noted below, subsequent to the year end this bank facility was refinanced.
The decrease in the lease liability to £18.0m (2024: £18.1m) reflects expected payments on property arrangement. There were no material revisions to existing leases.
Post balance sheet event
On 27 June 2025, a new Revolving Credit Facility ("RCF"), totaling £115 million, has been secured from a syndicate, comprising The Royal Bank of Scotland plc, HSBC UK Bank plc, and Clydesdale Bank plc (trading as Virgin Money). The facility extends to 30 June 2027 and includes financial covenants, limited to debt cover and interest cover, which are aligned with the Group's current leverage position and strategic objectives. This RCF replaces the facility which existed at the 31 March 2025 described above.
At current leverage levels, the bank margin under the new RCF is 3.0% above SONIA. The RCF includes a margin ratchet mechanism, enabling reduced interest costs as the Group deleverages.
Scott Cunningham
Chief Financial Officer
24 July 2025
Definition of alternative performance measures:
1 Recurring revenue is the revenue that repeats either under long-term contractual arrangement or on a rolling basis by predictable customer habit. % of recurring revenue is defined as Recurring Revenue (as disclosed in note 3) / Revenue (as disclosed in the consolidated statement of comprehensive income)
2 Gross profit margin % is defined as Gross Profit / Revenue as a % (both as disclosed in the consolidated statement of comprehensive income)
3 Adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) is earnings before interest, tax, depreciation and amortisation (EBITDA) before share-based payment charges, acquisition costs and exceptional non-recurring costs. Throughout these financial statements acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
4 Adjusted EBITDA margin % is defined as adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
5 Adjusted EBIT is earnings before interest and tax (EBIT) before amortisation charges on acquired intangible assets, share-based payment charges, acquisition costs and exceptional non-recurring costs. Throughout these financial statements acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
6 Adjusted EBIT margin% is defined as adjusted EBIT / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
7 Adjusted profit before tax is profit before tax, amortisation charges on acquired intangible assets, share-based payment charges, acquisition costs and exceptional non-recurring costs.
8 Adjusted profit before tax margin % is defined as adjusted profit before tax / Revenue (as disclosed in the consolidated statement of comprehensive income) as a %
9 Profit before tax margin % is defined as Profit before Tax / Revenue (both as disclosed in the consolidated statement of comprehensive income) as a %
10 EBIT is earnings before interest and tax
11 Order booking value being the annual revenue value of the customer order at the time of booking, as opposed to the total contract value or the actual revenue realised in the reporting period, which will be influenced by the timing of order booking and the billing commencement date.
12 Cash flow from operations / Adjusted EBITDA % is defined as cash flow from operations (as disclosed in the consolidated statement of cash flows) / Adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income) as a %
13 Net debt / Adjusted EBIDTA level ratio is defined as Net Debt (as disclosed in note 11) / Adjusted EBITDA (as disclosed in the consolidated statement of comprehensive income)
14 Throughout this statement adjusted diluted earnings per share, as disclosed in note 7, is earnings per share before amortisation charges on acquired intangible assets, share based payment charges, acquisition costs and exceptional non-recurring costs and the taxation effect of these /weighted average number of ordinary shares - diluted (as disclosed in note 7)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 MARCH 2025
|
|
| | Note | 2025 £'000 | 2024 £'000 |
| Revenue | | | 3 | 143,460 | 127,049 |
|
|
| | | | |
| Cost of sales |
| | | (72,997) | (57,469) |
| |
| | | | |
| Gross profit |
| | | 70,463 | 69,580 |
|
|
| | | | |
| Administrative expenses |
| | | (117,312) | (56,552) |
| |
| | | | |
|
|
| | | | |
| Operating (loss)/profit |
| |
| (46,849) | 13,028 |
|
|
| | | | |
| Analysed as: |
| | | | |
| Earnings before interest, tax, depreciation, amortisation, acquisition costs, share-based payments and non-recurring costs |
| | | 34,312 | 37,728 |
| Share-based payments |
| | | (198) | (517) |
| Acquisition costs |
| | | (1,674) | (1,010) |
| Administrative expenses - non-recurring costs |
| | | - | (462) |
| Depreciation |
| | | (14,730) | (15,715) |
| Amortisation - acquired intangible assets |
| | | (4,902) | (4,226) |
| Amortisation - other intangible assets |
| | | (6,757) | (2,770) |
| Goodwill impairment charge |
| | | (52,900) | - |
|
|
| | | | |
| Finance costs - net |
| | | (6,370) | (4,287) |
|
|
| | | | |
| (Loss)/profit before taxation |
| | | (53,219) | 8,741 |
|
|
| | | | |
| Taxation | | | 4 | (1,898) | (2,300) |
|
|
| | | | |
| (Loss)/profit for the year attributable to equity holders of the parent |
|
|
| (55,117) | 6,441 |
|
|
|
|
| | |
|
|
|
|
| | |
| Other comprehensive expenses |
|
|
| | |
|
|
|
|
| | |
| Amounts which may be reclassified to profit or loss |
|
|
| | |
| Currency translation differences Currency hedge loss |
|
|
| (31) (84) | (25) - |
| Other comprehensive expenses for the year |
|
|
| (115) | (25) |
|
|
|
|
| | |
| Total comprehensive (expenses)/income for the year attributable to equity holders of the parent |
| | | (55,232) | 6,416 |
|
|
| | |
|
|
|
|
|
|
| | |
|
|
|
|
| | |
| Basic and diluted earnings per share |
| | | | |
| Basic (loss)/earnings per share |
| | 7 | (49.0)p | 5.8p |
| Diluted (loss)/earnings per share |
| | 7 | (49.0)p | 5.6p |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2025
| |
|
|
| 2025 |
|
|
|
|
|
| 2024 | |
|
|
|
|
| ||
|
|
| Note |
| £'000 | £'000 |
| ASSETS |
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
| Intangible assets - goodwill | | 8 | | 103,536 | 109,821 |
| Intangible assets - other | | 8 | | 40,769 | 15,231 |
| Trade and other receivables | | | | 111 | 111 |
| Property, plant and equipment | | 9 | | 59,515 | 63,492 |
|
|
|
|
| 203,931 | 188,655 |
| Current assets |
|
|
|
|
|
| Cash and cash equivalents | | | | 13,088 | 15,755 |
| Trade and other receivables | | | | 36,833 | 26,460 |
| Current tax asset | | | | 842 | - |
|
|
|
|
| 50,763 | 42,215 |
| | | | | | |
| Total assets |
|
|
| 254,694 | 230,870 |
|
| | | |
|
|
| LIABILITIES | | | |
|
|
| Non-current liabilities | | | |
|
|
| Trade and other payables | | 10 | | (15,210) | (2,834) |
| Non-current borrowings | | 11 | | (112,132) | (55,582) |
| Provisions | | | | (2,486) | (3,052) |
| Deferred tax | | 5 | | (10,084) | (4,884) |
|
|
|
|
| (139,912) | (66,352) |
| Current liabilities |
|
|
|
|
|
| Contingent consideration due on acquisitions | | | | (364) | (2,080) |
| Trade and other payables | | 10 | | (48,012) | (35,728) |
| Current tax liability | | | | - | (804) |
| Current borrowings | | 11 | | (2,874) | (2,509) |
|
|
|
|
| (51,250) | (41,121) |
| | | | | | |
| Total liabilities |
|
|
| (191,162) | (107,473) |
| | | | | | |
| Net assets |
|
|
| 63,532 | 123,397 |
| | | | | | |
| EQUITY |
|
|
|
|
|
| Share capital | | | | 1,128 | 1,124 |
| Own shares | | | | (70) | (70) |
| Capital redemption reserve | | | | 1,200 | 1,200 |
| Share premium | | | | 22,500 | 22,500 |
| Merger reserve | |
| | 6,967 | 6,967 |
| Hedging reserve | | | | (84) | - |
| Foreign currency translation reserve | | | | (10) | 21 |
| Retained earnings | | | | 31,901 | 91,655
|
| | | | | | |
| Total equity |
|
|
| 63,532 | 123,397 |
CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED 31 MARCH 2025
|
|
|
|
Note | 2025 £'000 | 2024 £'000 |
| | | |
| | |
| (Loss)/profit before taxation |
|
|
| (53,219) | 8,741 |
| Finance costs - net |
|
|
| 6,370 | 4,287 |
| Depreciation | | | | 14,792 | 15,764 |
| Amortisation | | | | 11,659 | 6,996 |
| Exceptional goodwill impairment charge | | | 8 | 52,900 | - |
| Share-based payments | | | | 198 | 517 |
| Research and development tax credit | | | | (532) | (364) |
| Unrealised foreign exchange (gain)/loss | | | | (76) | - |
| Non cash exceptional items | | | | (39) | - |
| Exceptional items - operating cash flow impact | | | | (361) | - |
| Movement in trade receivables | | | | 419 | 1,620 |
| Movement in trade payables | | | | (4,899) | (914) |
| Cash flow from operations |
|
|
| 27,212 | 36,647 |
| Taxation paid | | | | (1,866) | (710) |
| Net cash flow from operating activities |
| | | 25,346 | 35,937 |
|
|
|
| | | |
| Cash flow from investing activities |
|
| | | |
| Purchase of property, plant and equipment | | | 9 | (8,252) | (9,513) |
| Development costs | | | 8 | (2,907) | (2,178) |
| Purchase of intangible assets | | | 8 | (87) | (113) |
| Payment for current period acquisitions net of cash acquired | | (48,465) | (5,710)
| ||
| Payment of contingent consideration | | (2,500) | (4,180) | ||
| Net cash used in investing activities | | | | (62,211) | (21,694) |
|
|
|
| | | |
| Cash flow from financing activities |
|
| | | |
| Issue of shares | | | | 4 | 7 |
| Drawdown of bank loans | | | 11 | 57,000 | 7,600 |
| Payments under lease liabilities | | | | (4,352) | (5,017) |
| Payments under long-term intangible asset licence agreements | | | 8 | (2,559)
| - |
| Repayment of bank loans | | | 11 | - | (2,000) |
| Repayment of debt acquired on acquisition | | | 11 | (6,244) | (3,728) |
| Finance costs paid | | | | (4,816) | (3,069) |
| Dividends paid | | | | (4,835) | (6,099) |
| Net cash from/(used in) financing activities | | | | 34,198 | (12,306) |
| | | | | | |
| Net (decrease)/increase in cash and cash equivalents |
|
| (2,667) | 1,937 | |
| | | |
| ||
| Cash and cash equivalents at the beginning of the year | | | 15,755 | 13,818 | |
| | | |
| ||
| Cash and cash equivalents at the end of the year | | 13,088 | 15,755 | ||
| |
| | | ||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 MARCH 2025
|
|
|
Share capital |
Own shares EBT | Foreign currency translation reserve |
Capital redemption reserve |
Share premium account |
Merger reserve |
Hedge reserve |
Retained earnings |
Total | |
|
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| | | | | | | |
| | | | |
| Balance at 31 March 2023 | | 1,106 | (70) | 46 | 1,200 | 22,495 | 4,983 | - | 90,796 | 120,556 | |
|
| | | | | | |
| | |
| |
| Profit for the year | | - | - | - | - | - | - | - | 6,441 | 6,441 | |
| Currency translation differences | | - | - | (25) | - | - | - | - | - | (25) | |
| Total comprehensive income | | - | - | (25) | - | - | - | - | 6,441 | 6,416 | |
|
| |
| | |
|
|
|
|
|
| |
| Dividends - final (paid) | | - | - | - | - | - | - | - | (3,922) | (3,922) | |
| Dividends - interim (paid) | | - | - | - | - | - | - | - | (2,177) | (2,177) | |
| Share-based payments | | - | - | - | - | - | - | - | 517 | 517 | |
| Issue of share capital | | 18 | - | - | - | 5 | 1,984 | - | - | 2,007 | |
| Total transactions with owners | | 18 | - | - | - | 5 | 1,984 | - | (5,582) | (3,575) | |
|
|
|
|
|
|
|
|
|
|
|
| |
| Balance at 31 March 2024 |
| 1,124 | (70) | 21 | 1,200 | 22,500 | 6,967 | - | 91,655 | 123,397 | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
| | |
|
|
|
|
|
| |
| Loss for the year | | - | - | - | - | - | - | - | (55,117) | (55,117) | |
| Currency hedge loss | | - | - | - | - | - | - | (84) | - | (84) | |
| Currency translation differences | | - | - | (31) | - | - | - | - | - | (31) | |
| Total comprehensive income | | - | - | (31) | - | - | - | (84) | (55,117) | (55,232) | |
|
| |
| | |
|
|
|
|
|
| |
| Dividends - final (paid) | | - | - | - | - | - | - | - | (3,371) | (3,371) | |
| Dividends - interim (paid) | | - | - | - | - | - | - | - | (1,464) | (1,464) | |
| Share-based payments | | - | - | - | - | - | - | - | 198 | 198 | |
| Issue of share capital | | 4 | - | - | - | - | - | - | - | 4 | |
| | | | | | | | | | | | |
| Total transactions with owners | | 4 | - | - | - | - | - |
- | (4,637) | (4,633) | |
| | | | | | |
|
| | | | |
| Balance at 31 March 2025 |
| 1,128 | (70) | (10) | 1,200 | 22,500 | 6,967 | (84) | 31,901 | 63,532 | |
1. GENERAL INFORMATION
iomart Group plc is a public listed company, limited by shares, listed on the Alternative Investment Market ("AIM"), incorporated and domiciled in the United Kingdom and registered in Scotland under the Companies Act 2006. The address of the registered office is 6 Atlantic Quay, 55 Robertson Street, Glasgow, G2 8JD.
The financial statements are presented in UK Pounds Sterling because that is the currency of the primary economic environment in which the Group operates.
2. ACCOUNTING POLICIES
Basis of preparation
The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 March 2025 and 31 March 2024 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2024 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The financial information for the year ended 31 March 2025 is derived from the statutory accounts for that year which were approved by the Directors on 24 July 2024. The statutory accounts for the year ended 31 March 2025 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
The Group's financial statements have been prepared in accordance accordance with UK-adopted international accounting standards.
The Group's financial statements have been prepared on the historical cost basis.
Adoption of new and revised Standards - amendments to IFRS that are mandatorily effective for the current year
In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2024. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.
Going concern
The Consolidated Financial Statements have been prepared on a going concern basis, which the Directors consider appropriate for the reasons set out below.
The Group meets its day-to-day working capital requirements through operational cash flows, cash reserves, a £115 million Revolving Credit Facility ("RCF"), and leasing arrangements. As at 31 March 2025, £97 million of the RCF was drawn, primarily to fund historical acquisitions, including the £57 million acquisition of Atech on 1 October 2024. The Group held £13.1 million in cash and cash equivalents at year-end, which is the primary source of funding for day-to-day operations. The RCF was successfully refinanced on 27 June 2025 with a syndicate comprising Royal Bank of Scotland, HSBC, and Clydesdale Bank, extending the facility to 30 June 2027. The revised covenants reflect the Group's current leverage and strategic plans.
The Directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of these financial statements (the "going concern assessment period"). These forecasts, which incorporate reasonably possible downside scenarios, demonstrate that the Group and Company is expected to have sufficient liquidity and covenant headroom to meet their obligations as they fall due.
The Group is required to comply with financial covenants for adjusted leverage (reported net debt to adjusted EBITDA) and interest cover (adjusted EBITDA to reported net interest expense and adjusted for certain IFRS 9 interest expenses). Covenants are tested quarterly each year and income statement items are on a last 12 month basis (including pre-acquisition adjusted EBITDA as appropriate). The Directors are satisfied that there is no severe but plausible downside scenario in which the Group would breach its covenants for at least 12 months from the date of approval of these financial statements.
The Directors' forecasts in respect of the going concern assessment period have been built from the Board approved budget for the year ending 31 March 2026, and a forecast for the year ending 31 March 2027, and the going concern assessment takes account of the financial covenant requirements.
The forecasts include a number of assumptions in relation to order intake, renewal and churn rates, cost base reductions and improved electricity pricing which are now fixed via hedging arrangements through FY26 and FY27 at forward rates favourable to those achieved in FY25. Revenue assumptions reflect levels achieved in FY25 plus organic growth in our Microsoft and security practice, underpinned by the enhancement to our skills and credentials from the recent Atech acquisition, and have been adjusted for the accelerated trend seen in customer churn within the self-managed infrastructure product group.
Whilst the Group's trading and cash flow forecasts have been prepared using current trading assumptions, the Directors acknowledge ongoing macroeconomic and operational risks. These risks include, but are not limited to, achieving lower than forecast levels of new order intake, lower than expected customer renewals from larger customers plus evolution of product mix or cost pressures which impact margin quality. In making their going concern assessment in light of these risks, the Directors have also modelled a combined severe but plausible downside scenario when preparing the forecasts.
The downside scenario assumes economic downturn in FY26, primarily impacting recurring new order intake. In this scenario, recurring monthly order intake is forecast to reduce by 10% compared to base case budget. Over the last three years we have seen order bookings growth and high achievement of order booking targets. An additional and potentially more impactful factor that can impact the revenue and gross margin assumptions is the level of customer churn. Whilst known, near-term customer cancellations have been modelled, coupled with an underlying level of customer cancellations based on historic trends, there remains a risk that unexpected, medium to large customer cancellations could occur in the near-term. The Group is protected contractually to a large extent within the managed services area of the business with notice periods and cancellation clauses, however a residual risk remains. An additional level of customer cancellations has therefore been modelled each quarter in the downside scenario to reflect this risk with 20% higher absolute annualised customer revenue churn assumed from the iomart managed services area. Non-recurring revenue which includes reselling of hardware and software plus consultancy services could be subject to reduced investment levels from customers more so on consultancy services which are likely to be more discretionary in nature. In our downside scenario we have assumed certain repeating consultancy services may not continue at the current level and this represents around 25% of total non-recurring revenue on an annualised basis. In addition, the downside scenario also assumes the new business obtained does not achieve the gross margin planned, with a 10% reduction to the planned gross margin achievement across all new recurring revenue modelled.
Power prices are 100% fixed (at current volumes) through to March 2027. As a result, this reduces risk on our largest variable cost outside of people costs and software licencing. However there remains a risk that periods of sustained higher summer temperatures, considering the impacts of wider climate-related factors, could increase energy usage at sites. A 5% increase in forecasted usage has been modelled across a period of three months over the summer to reflect this risk.
Given external market analysis indicates an expectation that interest rates have stabilised and some reductions in SONIA rates are to be expected, no sensitivity on interest rates has been included in the plausible downside scenario. Both the base case and severe but plausible downside forecast scenarios assumes no payment of dividends. The Directors will continue to monitor this in relation to leverage levels and appropriate allocation of capital.
In addition to the base case and severe but plausible downside forecasts, the Directors have modelled an overlay scenario to recognise the mitigation available to the Directors in the event some of the downside scenarios materialise. S. Such actions, which could mitigate both earnings and leveraging levels, include but are not limited to, the rephasing of discretionary capital expenditure, potential strategic reassessment of certain assets, reduction in people related costs including discretionary bonus payments and expenditure investments plus further management of discretionary cost areas such as marketing, training and travel.
Even under the downside scenario, the Group is forecast to maintain sufficient liquidity and comply with all financial covenants without requiring mitigating actions.
Accordingly, and in line with the FRC guidance, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future and for a period of at least 12 months from the date of approval of these financial statements. In performing their analysis, the Directors have not identified any material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in accordance with IFRS requires the Directors to make critical accounting estimates and judgements that affect the amounts reported in the financial statements and accompanying notes. The estimates and assumptions that have a significant risk of causing material adjustment to the carrying value of assets and liabilities within the next financial year are discussed below:
Judgements
The Group do not consider that there are any critical accounting judgements in the preparation of the financial statements.
Estimates
Goodwill impairment assessment: the Group tests annually whether Goodwill has suffered any impairment. This requires an estimation of the recoverable amount of the applicable cash generating unit to which the Goodwill relate. Estimating the recoverable amount requires the Group to make an estimate of the expected future cash flows from the specific cash generating unit using certain key assumptions including growth rates and a discount rate. These assumptions resulted in a material £52.9m impairment charge being recognised in the current year. See note 8
3. SEGMENTAL ANALYSIS
The Chief Operating Decision-Maker has been identified as the Chief Executive Officer ("CEO") of the Company. As at 31 March 2025, the Group has three operating segments and the CEO reviews the Group's internal reporting which recognises these three segments in order to assess performance and to allocate resources. The Group has determined its reportable segments are also its operating segments based on these reports.
The Group currently has three operating and reportable segments being Easyspace, Cloud Services and Atech.
· Easyspace - this segment provides a range of shared hosting and domain registration services to micro and SME companies.
· Cloud Services - this segment provides managed cloud computing facilities and services, through a network of owned data centres, to the larger SME and corporate markets.
· Atech - this segment is a Microsoft Solutions Partner and delivers multi-platform solutions, digital transformation and specialised managed security services to mid-sized enterprises. This is a new segment given the acquisition in the year.
Information regarding the operation of the reportable segments is included below. The CEO assesses the performance of the operating segments based on revenue and a measure of earnings before interest, tax, depreciation and amortisation (EBITDA) before any allocation of Group overheads, charges for share-based payments, costs associated with acquisitions, any gain or loss on revaluation of contingent consideration and material non-recurring items. This segment EBITDA is used to measure performance as the CEO believes that such information is the most relevant in evaluating the results of the segment.
The Group's EBITDA for the year has been calculated after deducting Group overheads from the EBITDA of the three segments as reported internally. Group overheads include the cost of the Board, all the costs of running the premises in Glasgow, the Group marketing, human resource, finance and design functions and legal and professional fees.
The segment information is prepared using accounting policies consistent with those of the Group as a whole.
The assets and liabilities of the Group are not reviewed by the Chief Operating Decision-Maker on a segment basis. Therefore, none of the Group's assets and liabilities are segmental assets and liabilities and are all unallocated for segmental disclosure purposes. For that reason, the Group has not disclosed details of segmental assets and liabilities.
All segments are continuing operations. No customer accounts for 10% or more of external revenues. Inter-segment transactions are accounted for using an arms-length commercial basis.
Operating Segments
Revenue by Operating Segment
|
|
|
|
|
|
| 2024 |
|
|
|
|
|
| 2025 £'000 | £'000 |
| Easyspace | | | | | 11,999 | 12,471 |
| iomart Cloud Services | | | | | 109,998 | 114,578 |
| Atech | | | | | 21,463 | - |
|
|
|
|
| 143,460 | 127,049 | |
iomart Cloud Services revenue can be further disaggregated as follows:
|
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| iomart Cloud managed services | | | | 76,363 | 75,212 | |
| Self-managed infrastructure | | | | 23,686 | 28,429 | |
| Non-recurring revenue | | | | 9,949 | 10,937 | |
|
|
|
|
| 109,998 | 114,578 | |
The nature of these three offerings are explained within the Chief Financial Officer's report.
Recurring and Non-recurring Revenue
The amount of recurring and non-recurring revenue recognised during the year can be summarised as follows:
|
|
|
|
|
| 2025 | 2024 |
|
|
|
|
|
| £'000 | £'000 |
| Recurring - over time | | | | | 127,569 | 116,112 |
| Non-recurring - point in time | | | 15,891 | 10,937 | ||
|
|
|
|
| 143,460 | 127,049 | |
Geographical Information
In presenting the consolidated information on a geographical basis, revenue is based on the geographical location of customers. There is no single country where revenues are individually material other than the United Kingdom. The United Kingdom is the place of domicile of the parent company, iomart Group plc.
Analysis of Revenue by Destination
|
|
|
|
|
| 2025 | 2024 |
|
|
|
|
|
| £'000 | £'000 |
| United Kingdom | | | | | 126,272 | 107,864 |
| Rest of the World | | | | | 17,188 | 19,185 |
| Revenue from operations |
|
|
| 143,460 | 127,049 | |
Profit by Operating Segment
| | 2025 | 2024 | |||||
| | Adjusted EBITDA | Depreciation, amortisation, acquisition costs, share-based payments and exceptional non-recurring costs | Impairment charge | Operating profit/(loss) | Adjusted EBITDA | Depreciation, amortisation, acquisition costs, share-based payments and exceptional non-recurring costs | Operating profit/(loss) |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Easyspace | 5,671 | (461) | - | 5,210 | 6,161 | (570) | 5,591 |
| iomart Cloud Services* | 30,207 | (24,131) | (52,900) | (46,824) | 36,729 | (22,141) | 14,588 |
| Atech | 3,211 | (1,797) | - | 1,414 | - | - | - |
| Group overheads | (4,777) | - | - | (4,777) | (5,162) | - | (5,162) |
| Administrative expenses - exceptional non-recurring cost | - | - | | - | - | (462) | (462) |
| Acquisition costs | - | (1,674) | - | (1,674) | - | (1,010) | (1,010) |
| Share-based payments | - | (198) | - | (198) | - | (517) | (517) |
| Subtotal | 34,312 | (28,261) | (52,900) | (46,849) | 37,728 | (24,700) | 13,028 |
| | | | | | | | |
| Group interest and tax | - | - | - | (8,268) | - | - | (6,587) |
| (Loss)/profit for the year |
|
|
| (55,117) |
|
| 6,441 |
Group overheads, acquisition costs, share-based payments, interest and tax are not allocated to segments.
* The iomart Cloud Services combined depreciation & amortisation charge of £24,131,000 consists of £14,580,000 and £9,551,000 of depreciation & amortisation respectively (March 2024: £22,141,000 combined charge consisting of £15,759,000 and £6,382,000 of depreciation & amortisation respectively).
4. TAXATION
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| Corporation Tax: | | | | | |
| Tax charge for the year | | | (1,024) | (2,536) | |
| Adjustment relating to prior years | | | 414 | (130) | |
| Total current taxation charge | | | (610) | (2,666) | |
| | | | | | |
| Deferred Tax: Origination and reversal of temporary differences | | |
24 |
387 | |
| Adjustment relating to prior years | | | (1,312) | (21) | |
| Total deferred taxation credit/(charge) | | | (1,288) | 366 | |
| | | | | | |
| Total taxation charge | | | (1,898) | (2,300) | |
The adjustment relating to prior years are amendments recognised on the finalisation of annual taxation computations. The differences between the total taxation charge shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:
|
|
|
|
|
2025 £'000 |
2024 £'000 |
| | | | | | |
| (Loss)/Profit before tax | | | (53,219) | 8,741 | |
| | | | | | |
| Tax (credit)/charge @ 25% (2024: 25%) | | | (13,305) | 2,185 | |
| | | | | | |
| Expenses disallowed for tax purposes | | | 13,505 | 135 | |
| R&D expenditure credits | | | 6 | - | |
| Adjustments in current tax relating to prior years | | | (414) | 130 | |
| Tax effect of different statutory tax rates of overseas jurisdictions | | | 42 | (7) | |
| Tax effect of share-based remuneration | | | 574 | (207) | |
| Movement in deferred tax related to property, plant and equipment | 203 | 43 | |||
| Income not taxable for tax purposes | (90) | - | |||
| Movement in deferred tax not recognised | 65 | - | |||
| Movement in deferred tax relating to prior years | | | 1,312 | 21 | |
| Total taxation charge for the year | | | 1,898 | 2,300 | |
The weighted average applicable tax rate for the year ended 31 March 2025 was 25% (2024: 25%). The effective rate of tax for the year, based on the taxation charge for the year as a percentage of the (loss)/profit before tax is (0.04)% (2024: 26%). The effective rate of tax is heavily distorted by the large number of non-taxable charges in the year, especially the goodwill non-cash impairment, plus the impact of the prior year adjustments, making the effective tax in the current year somewhat redundant as a disclosed metric. As a predominately UK business our underlying tax rate does mirror the headline corporation tax rates.
Deferred tax assets and liabilities at 31 March 2025 have been calculated based on the rate of 25% enacted at the reporting date (2024: 25%).
5. DEFERRED TAX
The Group recognised deferred tax assets/(liabilities) as follows:
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| | | | | | |
| Share-based remuneration | | | | 197 | 891 |
| Capital allowances temporary differences | | | | (3,177) | (1,687) |
| Deferred tax on development costs | | (1,224) | (720) | ||
| Deferred tax on customer relationships | | | | (5,955) | (3,286) |
| Deferred tax on intangible software | | | | (35) | (82) |
| Brought forward tax losses | | | | 107 | - |
| Other short-term timing differences | | | | 3 | - |
| Deferred tax liability |
|
|
| (10,084) | (4,884) |
At the year end, the Group had £2.9m (2024: £2.4m) of brought forward tax losses. Of this amount only £0.4m has recognised to have a deferred tax value (2024: £nil). This amount is expected to be recoverable by the group in future years.
|
|
Share-based remuneration £'000 |
Capital allowances temporary differences £'000 |
Development costs £'000 | Other short term timing differences £'000 |
Customer relationships £'000 |
Intangible software £'000 |
Brought forward tax losses £'000 |
Total £'000 |
| | | | | | | | | |
| Balance at 31 March 2023 | 638 | (319) | (648) | - | (2,762) | (130) | - | (3,221) |
| Acquired on acquisition of subsidiary | - | (578) | - | - | (1,451) | - | - | (2,029) |
| Movement relating to prior year | - | (21) | - | - | - | - | - | (21) |
| Credited/(charged) to statement of comprehensive income | 253 | (769) | (72) | - | 927 | 48 | - | 387 |
| | | | | | |
|
|
|
| Balance at 1 April 2024 | 891 | (1,687) | (720) | - | (3,286) | (82) | - | (4,884) |
|
|
|
|
|
|
|
|
|
|
| Acquired on acquisition of subsidiary | - | (21) | - | - | (3,891) | - | - | (3,912) |
| Movement relating to prior year | - | (963) | (349) | - | - | | - | (1,312) |
| Credited/(charged) to statement of comprehensive income | (694) | (506) | (155) | 3 | 1,222 | 47 | 107 | 24 |
| | | | | | | | |
|
| Balance at 31 March 2025 | 197 | (3,177) | (1,224) | 3 | (5,955) | (35) | 107 | (10,084) |
The movement in the deferred tax account during the year was:
The deferred tax asset in relation to share-based remuneration arises from the anticipated future tax relief on the exercise of share options.
The deferred tax on capital allowances temporary differences arises mainly from plant and equipment in the Cloud Services segment where the tax written down value varies from the net book value.
The deferred tax on development costs arose from development expenditure on which tax relief was received in advance of the amortisation charge.
The deferred tax on customer relationships and intangible software arises from permanent differences on acquired intangible assets.
The deferred tax asset in relation to the brought forward tax losses relates to recoverable tax losses which are seen as having high probability of recovery against future tax profits of the Group.
6. ACQUISITIONS
Atech Group Limited
On 1 October 2024, the Group acquired the entire issued share capital of Kookaburra Topco Limited, the holding company of Atech Support Limited and other subsidiaries ("Atech"). The acquisition was a significant strategic milestone, substantially enhancing the Group's scale, credibility, and capabilities, particularly in Microsoft Azure, modern work and cyber security solutions, which are central to our to our future strategic focus. Atech is one of the UK's most highly accredited Microsoft Solution Partners.
During the current year, the Group incurred £866,000 of third party acquisition related costs in respect of this acquisition. These expenses are included in administrative expenses in the Group's consolidated statement of comprehensive income and in cash flow from operating activities for the period ended 31 March 2025.
The following table summarises the consideration to acquire Atech, the amounts of identified assets acquired, and liabilities assumed at the acquisition date.
| |
£'000 |
| Recognised amounts of net assets acquired and liabilities assumed: |
|
| Cash and cash equivalents | 3,403 |
| Trade receivables | 6,072 |
| Other receivables, prepayments and accrued income | 3,600 |
| Property, plant and equipment | 447 |
| Intangible assets | 15,588 |
| Borrowings | (6,244) |
| Provisions | (84) |
| Trade and other payables | (12,563) |
| Lease liabilities | (256) |
| Corporation tax | (201) |
| Deferred considerations from historic acquisitions | (784) |
| Deferred tax liability | (3,912) |
| Identifiable net assets | 5,066 |
| Goodwill | 46,615 |
| Total consideration | 51,681 |
|
|
|
| Satisfied by: | |
| Cash - paid on acquisition | 51,681 |
| | |
| Total consideration to be transferred | 51,681 |
The acquisition of Atech was completed using a "locked box completion" mechanism, on a no cash, no debt, and normalised working capital basis.
The cash paid on the acquisition was £51,681,000 to the previous shareholders, £6,244,000 of debt repayments and £187,000 of stamp duty.
The goodwill arising on the acquisition of Atech is attributable to the premium payable for a pre-existing, rapidly growing, Microsoft Solutions Partner, delivering complex, multi-platform solutions, digital transformation and specialised managed security services to mid-sized enterprises, together with the benefits to the Group in merging the business with its existing infrastructure and the anticipated future revenue synergies from the combination. The goodwill is not expected to be deductible for tax purposes.
Included in intangible assets is the fair value included in respect of the acquired customer relationships intangible asset of £13,770,000. To estimate the fair value of the customer relationships intangible asset, a discounted cash flow method, specifically the income approach, was used with reference to the directors' estimates of the level of revenue, which will be generated from them. A pre-tax discount rate of 11.49% was used for the valuation. Customer relationships are being amortised over an estimated useful life of 16 years.
Included within intangible assets is the Atech brand, recognised at a fair value of £1,794,000 as at the acquisition date. The fair value was determined using the Relief-from-Royalty Method, a valuation technique commonly accepted for brand and trademark assets. This method estimates the value of the brand by reference to the hypothetical royalty payments that would be avoided through ownership of the brand, rather than licensing it from a third party. The valuation was based on the directors' forecast of future revenues attributable to the brand, an appropriate notional royalty rate applied to those revenues and a pre-tax discount rate of 11.5%. The brand is being amortised on a straight-line basis over its estimated useful life of 16 years.
Atech earned revenue of £21,463,000 and generated profit, before allocation of group overheads, exceptional items and tax, of £3,179,000 in the period since acquisition.
If Atech had been part of the iomart Group from 1 April 2024, revenue earned for the twelve month period for iomart would have been £40,138,000 and profit before tax would have been £1,760,000 for the year ended 31 March 2025. This profit includes exceptional items, interest expense and costs associated with the previous ownership structure which aggregates to £3,980,000.
7. EARNINGS PER ORDINARY SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, after deducting any own shares held in Treasury and held by the Employee Benefit Trust. Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the total of the weighted average number of ordinary shares in issue during the year, after deducting any own shares, and adjusting for the dilutive potential ordinary shares relating to share options.
|
|
|
|
|
2025 £'000 |
2024 £'000 |
| (Loss)/profit for the financial year and basic earnings attributed to ordinary shareholders | | | (55,117) | 6,441 | |
|
| | | |
|
|
| Weighted average number of ordinary shares: | | | 000 | 000 | |
| | | | |
|
|
| Called up, allotted and fully paid at start of year | | | 112,342 | 110,422 | |
| Own shares held by Employee Benefit Trust | | | (141) | (141) | |
| Issued share capital in the year | | | 244 | 1,391 | |
| Weighted average number of ordinary shares - basic | | | 112,445 | 111,672 | |
|
| | | | | |
| Dilutive impact of share options | | | 1,128 | 2,710 | |
| | | | | | |
| Weighted average number of ordinary shares - diluted |
| 113,573 | 114,382 | ||
| | | | | | |
| Basic (loss)/earnings per share | | | (49.0p) | 5.8 p | |
| Diluted (loss)/earnings per share | | (49.0p) | 5.6 p | ||
| Adjusted (loss)/earnings per share | | | | 2025 £'000 | 2024 £'000 | ||
| | | | | | |||
| (Loss)/profit for the financial year and basic (loss)/earnings attributed to ordinary shareholders | | | (55,117) | 6,441 | |||
| - Amortisation of acquired intangible assets | | | 4,902 | 4,226 | |||
| - Acquisition costs | | | 1,674 | 1,010 | |||
| - Administrative expenses - exceptional non-recurring costs | - | 462 | |||||
| - Share-based payments | | | 198 | 517 | |||
| - Exceptional goodwill impairment charge | | | 52,900 | - | |||
| - Tax impact of adjusted items | | | (734) | (1,421) | |||
| Adjusted profit for the financial year and adjusted earnings attributed to ordinary shareholders |
|
|
| 3,823 | 11,235 | ||
|
|
|
|
| |
| ||
| Adjusted basic earnings per share | | | 3.4p | 10.0 p | |||
| Adjusted diluted earnings per share | | 3.4p | 9.8 p | ||||
8. INTANGIBLE ASSETS
|
|
Goodwill |
Development costs | Acquired customer relationships | Acquired brand | Software |
Beneficial contracts | Domain names & IP addresses | Total |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| £'000 |
| Cost | | | | | | | | |
| At 31 March 2023 | 99,950 | 15,302 | 61,809 | - | 11,028 | 86 | 336 | 188,511 |
| Acquired on acquisition of subsidiary | 9,871 | 1,055 | 5,803 | - | 97 | - | - | 16,826 |
| Additions | - | - | - | - | 113 | - | - | 113 |
| Disposals | - | (112) | - | - | - | - | - | (112) |
| Currency translation differences | - | - | (16) | - | (12) | - | - | (28) |
| Development cost capitalised | - | 2,178 | - | - | - | - | - | 2,178 |
| At 31 March 2024 | 109,821 | 18,423 | 67,596 | - | 11,226 | 86 | 336 | 207,488 |
| Acquired on acquisition of subsidiary | 46,615 | - | 13,770 | 1,794 | 24 | - | - | 62,203 |
| Additions | - | - | - | - | 18,711 | - | - | 18,711 |
| Disposals | - | - | - | - | - | - | - | - |
| Currency translation differences | - | - | (20) | - | (15) | - | 2 | (33) |
| Development cost capitalised | - | 2,907 | - | - | - | - | - | 2,907 |
| At 31 March 2025 | 156,436 | 21,330 | 81,346 | 1,794 | 29,946 | 86 | 338 | 291,276 |
| | | | | | | | | |
| Accumulated amortisation: | | | | | | | | |
| At 31 March 2023 | - | (12,600) | (53,325) | - | (9,274) | (77) | (304) | (75,580) |
| Disposals | - | 112 | - | - | - | - | - | 112 |
| Charge for the year | - | (1,892) | (4,226) | - | (864) | (6) | (8) | (6,996) |
| Currency translation differences | - | - | 14 | - | 14 | - | - | 28 |
| At 31 March 2024 | - | (14,380) | (57,537) | - | (10,124) | (83) | (312) | (82,436) |
|
|
|
|
|
|
|
|
|
|
| Disposals | - | - | - | - | - | - | - | - |
| Charge for the year | - | (2,219) | (4,828) | (74) | (4,527) | (3) | (8) | (11,659) |
| Impairment charge | (52,900) | - | - | - | - | - | - | (52,900) |
| Currency translation differences | - | - | 21 | - | 3 | - | - | 24 |
| At 31 March 2025 | (52,900) | (16,599) | (62,344) | (74) | (14,648) | (86) | (320) | (146,971) |
| | | | | | | | | |
| Carrying amount: | | | | | | | | |
|
| | | | | | | | |
| At 31 March 2025 | 103,536 | 4,731 | 19,002 | 1,720 | 15,298 | - | 18 | 144,305 |
| | | | | | | | | |
| At 31 March 2024 | 109,821 | 4,043 | 10,059 | - | 1,102 | 3 | 24 | 125,052 |
| | | | | | | | | |
Of the total additions in the year of £18,711,000 (2024: £114,000), no amounts related to leases under IFRS 16 (note 12) (2024: £nil). There were £16,065,000 amounts included in trade payables at the year end (2024: £nil). As a result, the total cash outflow in relation to these additions was £2,646,000 (2024: £114,000) of which £87,000 is disclosed within investing activities and £2,559,000 is disclosed within financing activities. The latter cash flow classification is due to the long term, multi year commercial arrangements with the technology providers.
Included within customer relationships are the following significant net book values: £9.2m in relation to the acquisition of Atech Group Limited with a remaining useful life of 16 years, £2.8m in relation to the acquisition of Extrinsica Global Holdings Limited and £1.2m in relation to the acquisition of Accesspoint Group Holdings Limited both with a remaining useful life of 6 years, £1.9m in relation to the acquisition of Concepta Capital Limited with a remaining useful life of 5 years, £0.3m in relation to the acquisitions of Memset Limited with a remaining useful life of 3 years, Bytemark Limited with a net book value of £0.1m and LDeX Group Limited of £0.3 both with a remaining useful life of 2 years, Sonassi Limited of £0.2m with a remaining useful life of 2 years.
Goodwill, as allocated to individual Cash Generating Units ("CGU"), was reviewed for impairment in accordance with IAS 36 "Impairment of Assets". An impairment charge £52,900,000 (2024: £nil) arose in relation to the iomart Cloud Services CGU as a result of this review. The impairment charge within the iomart Cloud Services CGU reflects both the strategic shift away from low growth, heritage product areas and the accelerated customer churn in certain areas of this CGU.
The carrying value of goodwill by each CGU is as follows:
| Cash Generating Units (CGU) |
|
|
| 2025 £'000 | 2024 £'000 |
| Easyspace |
|
|
| 26,685 | 26,685 |
| iomart Cloud Services | | | | 30,236 | 83,136 |
| Atech | | | | 46,615 | - |
| |
|
|
| 103,536 | 109,821 |
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use post-tax cash flow projections based on financial budgets approved by the Board covering a five year period. These projections are the result of detailed planning and assume similar levels of organic growth as the Group has experienced in the previous years.
The growth rates and margins used to extrapolate estimated future performance continue to be based on past growth performance adjusted downwards to take into account the additional risk associated with customer renewal levels. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates. The growth rates used to estimate future performance beyond the periods covered by the annual and strategic planning processes do not exceed the long-term average growth rates for similar products.
In determining the value-in-use, the estimated post-tax future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Management continue to apply the judgement at 31 March 2025 that there are three distinct CGUs within the Group, namely Cloud Services, Easyspace and Atech which have been derived with due consideration to IAS 36. The assumptions used for the CGU included within the impairment reviews are as follows:
|
|
|
|
Atech | Easyspace | iomart cloud services | |||
|
|
|
|
31 March 2025 | 31 March 2025 | 31 March 2024 | 31 March 2025 | 31 March 2024 | |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Discount rate (pre tax) |
|
|
| 14,8% | 14.8% | 14.9% | 14.8% | 14.9% |
| Discount rate (post-tax) |
| | | 11.1% | 11.1% | 11.2% | 11.1% | 11.2% |
| 5 year average EBITDA growth | | | |
| -2% | -3% | 0% | 5% |
| Future perpetuity rate | | | | 2.5% | 0.0% | 0.0% | 2.5% | 2.5% |
| Initial period for which cash flows are estimated (years) |
5 | 5 | 5 | 5 | 5 | |||
The perpetual growth rate adopted for each CGU is consistent with the market that each entity operates in for real growth. Whilst the iomart Cloud Services CGU has been impacted by customer churn in some legacy product areas, we continue to see growth in our order bookings from both new and existing customers which supports the adoption of a perpetual growth rate in this area.
Plausible downside sensitivities have been considered as part of the impairment analysis, with specific sensitivities applied to both the discount rate and forecast EBITDA cash flow projections within the iomart Cloud Services CGU. A range of reasonably possible downside sensitivities have been applied being an increase in the discount rate to 11.75% discount rate and a reduction in the forecast EBITDA cash flows of 10%. A reasonably possible increase in the discount rate to 11.75% would result in an additional impairment charge of £6.8m, a reasonably possible 10% reduction in the forecast EBITDA would result in an additional impairment charge of £13.2m and in combination these downsides would result in an additional impairment charge of £19.8m.
Easyspace has a strong track record of achieving cash flow projections whilst Atech has also performed in line with expectations post-acquisition, as a result management consider the most plausible downside to be in respect of the discount rate. Both CGUs continue to have headroom in excess of the respective carrying amount when a discount rate of 11.75% is applied.
All amortisation and impairment charges are included in the depreciation, amortisation and impairment of non-financial assets classification, which is disclosed as administrative expenses in the statement of comprehensive income.
9. PROPERTY, PLANT AND EQUIPMENT
|
| Freehold property | Leasehold property and improve-ments | Data centre equipment | Computer equipment | Office equipment | Motor vehicles | Total | |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
|
|
|
|
|
|
|
|
| |
| Cost: |
| | | | | | | |
| At 31 March 2023 | 8,236 | 41,516 | 31,843 | 121,238 | 2,986 | 46 | 205,865 | |
| Acquired on acquisition of subsidiary | - | 16 | - | 345 | 25 | - | 386 | |
| Additions in the year | - | 6,316 | 2,624 | 5,876 | 83 | 48 | 14,947 | |
| Disposals in the year | - | (2,129) | - | - | - | (5) | (2,134) | |
| Currency translation differences | - | (49) | - | (167) | - | - | (216) | |
| At 31 March 2024 | 8,236 | 45,670 | 34,467 | 127,292 | 3,094 | 89 | 218,848 | |
|
|
|
|
|
|
|
|
| |
| Acquired on acquisition of subsidiary | - | 357 | - | 12 | 78 | - | 447 | |
| Additions in the year | - | 3,171 | 2,326 | 4,814 | 78 | - | 10,389 | |
| Disposals in the year | - | (312) | (1,630) | (72) | (217) | (4) | (2,235) | |
| Currency translation differences | - | (72) | - | (181) | - | - | (253) | |
| At 31 March 2025 | 8,236 | 48,814 | 35,163 | 131,865 | 3,033 | 85 | 227,196 | |
| | | | | | | | | |
| Accumulated depreciation: | | | | | | | | |
| At 31 March 2023 | (1,295) | (20,951) | (18,711) | (97,403) | (2,520) | (26) | (140,906) | |
| Charge for the year | (238) | (4,984) | (1,591) | (8,754) | (184) | (13) | (15,764) | |
| Disposals in the year | - | 1,117 | - | - | - | 5 | 1,122 | |
| Currency translation differences | - | 41 | - | 151 | - | - | 192 | |
| At 31 March 2024 | (1,533) | (24,777) | (20,302) | (106,006) | (2,704) | (34) | (155,356) | |
|
|
|
|
|
|
|
|
| |
| Charge for the year | (237) | (4,880) | (1,665) | (7,808) | (187) | (15) | (14,792) | |
| Disposals in the year | - | 312 | 1,630 | 72 | 215 | 4 | 2,233 | |
| Currency translation differences | - | 58 | - | 176 | - | - | 234 | |
| At 31 March 2025 | (1,770) | (29,287) | (20,337) | (113,566) | (2,676) | (45) | (167,681) | |
|
|
|
|
|
|
|
|
| |
| Carrying amount: | | | | | | | | |
| At 31 March 2025 | 6,466 | 19,527 | 14,826 | 18,299 | 357 | 40 | 59,515 | |
| | | | | | | | | |
| At 31 March 2024 | 6,703 | 20,893 | 14,165 | 21,286 | 390 | 55 | 63,492 | |
Depreciation charge in the current year is comprised of £14,730,000 as disclosed in the statement of comprehensive income and £62,000 of accelerated depreciation in respect of the closure of offices in the current year, as included in non-recurring administrative costs.
During the year there were additions of £nil (2024: £231,000) in respect of reinstatement provisions and additions of £3,080,000 (2024: £4,270,000) in respect of leases under IFRS 16 (note 12). Of the total remaining additions in the year of £7,309,000 (2024: £10,446,000), £552,000 (2024: £1,247,000) was included in trade payables as unpaid invoices at the year-end resulting in a net increase of £943,000 (2024: net decrease of £933,000) in trade payables. Consequently, the consolidated statement of cash flows discloses a figure of £8,252,000 (2024: £9,513,000) as the cash outflow in respect of property, plant and equipment additions in the year.
See note 12 for movements in the year relating to right-of-use assets under IFRS 16 as included in the above table.
10. TRADE AND OTHER PAYABLES
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| | | | | | |
| Trade payables | | | | (22,286) | (12,163) |
| Other taxation and social security | | | | (2,471) | (2,538) |
| Accruals | | | | (8,685) | (8,437) |
| Deferred income | | | | (13,315) | (11,536) |
| Other creditors | | | | (1,255) | (1,054) |
| Trade and other payables - current |
| | | (48,012) | (35,728) |
The carrying amount of trade and other payables approximates to their fair value. Current trade payables and accruals are non-interest bearing and generally mature within three months.
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| Trade payables | | | | (11,909) | - |
| Deferred income | | | | (3,055) | (2,834) |
| Other creditors | | | | (246) | - |
| | | | | | |
| Trade and other payables - non-current |
| | | (15,210) | (2,834) |
Non-current deferred income in the year predominantly relates to support contracts that span over one year.
Revenue of £11,536,000 (2024: £12,117,000) recognised in the current year was included in deferred income at 31 March 2024 (2024: 31 March 2023).
The future annual payments for intangible software assets acquired via industry standard, multi-year, licence arrangements from technology providers are included in current and non-current trade payables above. At 31 March 2025, the total value is £17,372,000; split £5,463,000 current and £11,909,000 non-current. The largest element relates to the Broadcom 5 year commitment entered into at the start of FY25 such that all of the non-current element will be paid between two and five years.
11. BORROWINGS
|
|
|
|
| 2025 £'000 | 2024 £'000 |
|
| | | | | |
| Current: | | | | | |
| Lease liabilities (note 12) | | | (2,874) | (2,509) | |
| Current borrowings | | | (2,874) | (2,509) | |
|
| | | |
| |
| Non-current: | | | | | |
| Lease liabilities (note 12) | | | (15,132) | (15,582) | |
| Bank loans | | | (97,000) | (40,000) | |
| Total non-current borrowings | | |
| (112,132) | (55,582) |
| | | | | | |
| Total borrowings | | |
| (115,006) | (58,091) |
The carrying amount of borrowings approximates to their fair value.
At the start of the year there was £40.0m (2024: £34.4m) outstanding on the revolving credit facility and drawdowns of £57.0m (2024: £7.6m) were made from the facility during the year. Repayments totalling £nil (2024: £2.0m) were made in the year resulting in a balance outstanding at the end of the year of £97.0m (2024: £40.0m).
At the year end, the Group had access to a £125m revolving credit facility that matures on 30 June 2026, which also benefited from a £50m Accordion Facility. The revolving credit facility has a borrowing cost at the Group's current leverage levels of 2.5% (2024: 1.8%) margin over SONIA. The revolving credit facility incurs a non-utilisation fee of 35% of the bank margin. The effective interest rate for the revolving credit facility in the current year was 6.90% (2024: 6.85%).
Given the terms of the revolving credit facility and the ability for any drawdowns made to be extended beyond 31 March 2026 at the discretion of the Group, the total amount outstanding has been classified as non-current.
The obligations under the revolving credit facility are repayable as follows:
| | 2025 | 2024 | ||||
| | Capital | Interest | Total | Capital | Interest | Total |
| Group and Company only | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Due within one year | - | (1,681) | (1,681) | - | (698) | (698) |
| Due within two to five years | (97,000) | - | (97,000) | (40,000) | - | (40,000) |
|
| (97,000) | (1,681) | (98,681) | (40,000) | (698) | (40,698) |
The revolving credit facility was refinanced on 27 June 2025 and replaced by a new revolving credit facility which extends to 30 June 2027. The new revolving credit facility provides the Group with additional liquidity which will be used for general business purposes and to fund investments, in accordance with the Group's three-year strategic plan. The Directors are of the opinion that the Group can operate within the facility and comply with its bank covenants.
|
Analysis of change in net debt |
Cash and cash equivalents £'000 |
Bank loans £'000 | Lease liabilities £'000 |
Total liabilities £'000 | Total net debt £'000 |
| |
|
|
| |
|
| At 31 March 2023 | 13,818 | (34,400) | (19,180) | (53,580) | (39,762) |
| | | | | |
|
| Acquired on acquisition of subsidiary | - | (3,728) | - | (3,728) | (3,728) |
| Repayment of debt acquired on acquisition | | 3,728 | - | 3,728 | 3,728 |
| Additions to lease liabilities | - | - | (4,148) | (4,148) | (4,148) |
| Disposals from lease liabilities | - | - | 1,063 | 1,063 | 1,063 |
| Drawdown of bank loans | - | (7,600) | - | (7,600) | (7,600) |
| Repayment of bank loans | - | 2,000 | - | 2,000 | 2,000 |
| Bank loan interest charged | - | 3,062 | - | 3,062 | 3,062 |
| Bank loan interest paid | - | (3,062) | - | (3,062) | (3,062) |
| Currency translation | - | - | 11 | 11 | 11 |
| Cash and cash equivalent cash inflow | 1,937 | - | - | - | 1,937 |
| Lease liabilities cash outflow* | - | - | 4,163 | 4,163 | 4,163 |
| At 31 March 2024 | 15,755 | (40,000) | (18,091) | (58,091) | (42,336) |
| | | | | |
|
| | | | | |
|
| Acquired on acquisition of subsidiary | 3,403 | (6,244) | - | (6,244) | (2,841) |
| Repayment of debt acquired on acquisition | - | 6,244 | - | 6,244 | 6,244 |
| Additions to lease liabilities | - | - | (3,336) | (3,336) | (3,336) |
| Disposals from lease liabilities | - | - | - | - | - |
| Drawdown of bank loans | - | (57,000) | - | (57,000) | (57,000) |
| Repayment of bank loans | - | - | - | - | - |
| Bank loan interest charged | - | 4,968 | - | 4,968 | 4,968 |
| Bank loan interest paid | - | (4,968) | - | (4,968) | (4,968) |
| Currency translation | - | - | (3) | (3) | (3) |
| Cash and cash equivalent cash outflow | (6,070) | - | - | - | (6,070) |
| Lease liabilities cash outflow* | - | - | 3,424 | 3,424 | 3,424 |
| At 31 March 2025 | 13,088 | (97,000) | (18,006) | (115,006) | (101,918) |
* Lease liabilities cash outflow in the year is reconciled as £4,352k payments to lease provider as disclosed in the consolidated cash flow statement netted with lease interest of £928k.
12. LEASES
The Group leases assets including buildings, fibre contracts, colocation and software contracts. Information about leases for which the Group is a lessee is presented below:
|
Right-of-use assets |
|
| Leasehold Property £'000 | Data centre equipment £'000 |
Software £'000 | Total £'000 |
|
| | | | | | |
| Balance at 31 March 2024 | | | 15,915 | 1,327 | 95 | 17,337 |
| Additions | | 587 | 2,493 | - | 3,080 | |
| Acquired on acquisition of subsidiary | | 256 | - | - | 256 | |
| Disposals | | - | - | - | - | |
| Currency translation differences | | 7 | (10) | - | (3) | |
| Depreciation and amortisation | | (2,122) | (1,677) | (95) | (3,894) | |
| | | | | | | |
| Balance at 31 March 2025 | | | 14,643 | 2,133 | - | 16,776 |
The right-of-use assets in relation to leasehold property and data centre equipment are disclosed as non-current assets and are disclosed within property, plant and equipment (note 9). The right-of-use assets in relation to software are disclosed as non-current assets and are disclosed within intangibles (note 8).
Lease liabilities
Lease liabilities are presented in the consolidated statement of financial position within borrowings as follows:
|
|
|
|
|
| 2025 £'000 | 2024 £'000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| | | | | |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Current: | | | | |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Lease liabilities (note 11) | | | (2,874) | (2,509) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| | | | |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Non-current: | | | | |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Lease liabilities (note 11) | | | (15,132) | (15,582) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| | | | | | |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| Total lease liabilities | | |
| (18,006) | (18,091) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The largest area of liability relates to physical land & buildings of the date centre estate, plus the office location. The maturity analysis of undiscounted lease liabilities are shown in the table below:
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight line basis. During the year, in relation to leases under IFRS 16, the Group recognised the following amounts in the consolidated statement of comprehensive income:
|
|
|
|
| 2025 £'000 | 2024 £'000 |
|
| | | | | |
| Short-term and low value lease expense | | | (1,830) | (1,711) | |
| Depreciation charge | | | (3,799) | (3,933) | |
| Amortisation charge | | | (95) | (285) | |
| Interest expense | | | (928) | (854) | |
| | | | | | |
|
| | |
| (6,652) | (6,783) |
Amounts recognised in the consolidated statement of cash flows:
|
|
|
|
| 2025 £'000 | 2024 £'000 |
|
| | | | | |
| Amounts payable under leases: | | | | | |
| Short-term and low value lease expense | | | (1,830) | (1,711) | |
| Payments under lease liabilities within cash flows from financing activities | (4,352) | (5,017) | |||
|
| | |
| (6,182) | (6,728) |
Payments under lease liabilities within cash flows in the year is represented by £3,424k (2024 £4,163k) of cash payments for the principal portion and £928k (2024 £854k) for the interest portion of the lease liability.
13. POST BALANCE SHEET EVENTS
Directorate Change
On 29 May 2025, Lucy Dimes stood down as Chief Executive Officer and left the company. Richard Last, Non-Executive Chair, became Executive Chair.
Refinancing
On 27 June 2025, a new Revolving Credit Facility ("RCF"), totalling £115 million, has been secured from a syndicate comprising The Royal Bank of Scotland plc, HSBC UK Bank plc, and Clydesdale Bank plc (trading as Virgin Money). The facility extends to 30 June 2027 and includes financial covenants, limited to debt cover and interest cover, which are aligned with the Group's current leverage position and strategic objectives.
At current leverage levels, the bank margin under the new RCF is 3.0% above SONIA. The RCF includes a margin ratchet mechanism, enabling reduced interest costs as the Group deleverages.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.