Sales volumes surge above pre-pandemic levels at IT group
Redcentric, a managed services business has seen its total revenue grow by 38.8% to £61.5m (H1 2022: £44.3m) with recurring revenue of £56.4m (H1 2022: £39.6m).
Releasing its unaudited half year results for the six months ended 30 September 2022, the Harrogate-based company has also reported pre-tax profits of £4.1m (H1 2022: £3m) and adjusted EBITDA of £11.7m (H1 2022: £11.9m).
Peter Brotherton, chief executive officer, said: “The last six months have been a transformational period for the business, with three acquisitions completed. These acquisitions, together with the two acquisitions completed in the previous financial year, have significantly enhanced our product offerings, and substantially increased run rate revenues from c.£90m to c.£150m.
“The integration of the businesses acquired in the last six months is progressing well, with annualised savings of c.£10m already realised and initiatives underway to deliver a further c.£7m of annualised savings.
“We look forward to building on the success of the last six months and to fully capitalise on the very significant opportunities resulting from the enlarged customer base and increased breadth of products and services.”
Redcentric adds that its adjusted operating expenditure for the period increased by £16m (101%) to £31.8m (H1 2022: £15.8m) reflecting the impact of the three acquisitions made in the six months to 30 September 2022.
Group headcount has increased by 135 since 31 March 2022 to 602 (FY 2022: 467).
The business notes the five acquisitions it has made in a ten-month period have together added about 650 customers to its existing base.
Redcentric says the majority of these new customers so far primarily take one service only. It explains this represents a significant opportunity to further grow revenues by cross selling Redcentric’s own range of services and products across its enlarged customer base.
The business states that after an “extremely challenging” two-year period which was dominated by the COVID-19 pandemic, businesses are now re-engaging and revisiting previously postponed largescale IT projects.
Its results update concludes: “New sales volumes for the last six months are significantly ahead of the pre COVID-19 pandemic levels, with the organic customer base increasing for each of the last six months as a result of new sales orders being in excess of cancellations and renewal churn.
“The Board is very confident the group will continue to build on the progress made over the last 18 months, delivering enhanced growth for the group.”