Acquisitions lift Daisy revenue, but cost of debt pushes it into loss
Lancashire-based telecoms and IT business Daisy has revealed operational sales growth which makes it the “largest independent direct SME telecoms business in the UK”.
Daisy Holdco’s financial results posted at Companies House show adjusted EBITDA growth in the year to March 2023 of £91.5m on turnover of £417.2m. However, borrowing costs were £103.9m, which pushed the overall pre-tax losses to £55.1m for the year.
The SME division has reported that revenue has increased year-on-year by 56% to £209m, with EBITDA up 65% to £52m in the period, and claims that the business is on track to continue delivering double-digit growth in 2024.
But the highly leveraged business also reported net senior debt stands at £461.9m, an increase from £416.6m, mainly due to increased borrowings and costs of acquisitions, lease renewals and net cash outflow for the year.
The group drew down a further £50m on its facility to repay part of the £215m it drew down to fund the acquisition of XLN in March 2022.
The risk factors in the group’s strategic report note the threat to cash flows caused by rising interest rates.
The current borrowings are at interest rates ranging from 3.25% on a “super-senior” facility of £86m to 11% on Payment in Kind facilities.
Overall, the income growth has been achieved through a combination of organic growth and the full-year impact of the synergies after acquiring XLN and the £12.7m acquisition of Communicate Better and cyber specialist ECSC Group which it paid £6.3m for on a debt free basis.
Dave McGinn, chief executive, said: “It’s been a truly transformative year. We have grown by bringing these great organisations together and building upon the successful cross-sell strategy across our business.”
Daisy is one of the largest partners in BT Wholesale’s Partner Plus programme.
He added: “We’ve created a workplace and culture that has the ideal conditions and support to help everyone achieve their personal career aspirations. We are working closely with our suppliers as a leading partner to negotiate the best solutions and support, and remain at the forefront of technology developments for the benefit of our customers.”
Daisy was founded by current chairman Matthew Riley in 2001.
