Sales process at listed IT company is terminated
A potential sale of Harrogate-based company Redcentric will not being going ahead.
The business has said this morning that a formal sale process, being carried out as part of a broader strategic review, has now been ended.
It had previously confirmed the start of the process in early September.
Its update explains: “The Board has held constructive discussions with a significant number of interested parties.
“However, these discussions did not materialise into any fully funded offers. Redcentric therefore today announces that the Board has decided to terminate the formal sale process with immediate effect.
“The Board is focused on building on the existing strong momentum within the business and, as noted in its announcement on 2 September 2020, will continue to evaluate potential options in relation to organic growth and/or potential acquisitions that might be made by the company in order to achieve maximum value for shareholders in the medium term.”
Redcentric, which is an IT managed services provider, has also announced its half year results to 30 September 2020, which show a 7% increase in revenue to £46.2m and a 19% increase in Adjusted EBITDA to £12.3m.
Total gross profit increased by 3% to £28.7m (H1 2020: £27.8m)
Since 31 March 2020, the company’s net debt has reduced by £17.5m to £17m, reflecting continuing strong adjusted operating cash flow conversion of 105%.
Ian Johnson, non-executive chairman, said: “I am pleased to report that the business is performing very well with revenues growing, strong profit margins and excellent cash generation.
“Our very significant presence in the public and private healthcare sectors, highly relevant products and high levels of recurring revenues combine to put us in an excellent position to withstand the current challenges associated with COVID-19 and the downturn in the wider economy.
“The outlook for the remainder of the year remains positive, although the Board remains cautious in respect of the longer-term economic uncertainty posed by a prolonged COVID-19 pandemic.
“With these results, the Board also announces the reinstatement of a dividend and the share buyback programme.
“Full details of the Board’s recommended dividend policy will be communicated when the company announces its preliminary results for FY21 and will reflect the conclusion of the Board’s ongoing strategic review.”
