Revenues climb at IT group as acquisitions bear fruit
Managed IT services business, Redcentric, says its total revenue grew 33.3% to £82m (H1 2023: £61.5m), with recurring revenue of £74.8m (H1 2023: £56.4m) in its unaudited results for the six months to 30 September 2023.
It also reports a pre-tax loss of £721,000 (H1 2023: £6.6m pre-tax loss) and adjusted EBITDA of £14.5m (H1 2023: £11.7m).
As previously reported, Redcentric has completed five acquisitions in the last two financial years.
Peter Brotherton, chief executive officer of the Harrogate-based company, said: “The integration of the businesses acquired over the course of the last two financial years is on track to be fully completed by the end of this financial year.
“The acquisitions have added considerable scale and broadened our product and solutions offerings, both of which have driven underlying recurring revenue growth of 8.3%.
“Since acquiring Sungard DCs, we have put considerable effort and resource into reducing electricity volumes.
“The reduction in electricity volumes, alongside the forward purchasing of electricity, brings certainty to our forecasts and will result in an expected reduction in electricity costs of £8.4m next financial year.”
The group says it expects to see the full benefits of reduced electricity commodity prices and the implementation of its energy conservation programmes being realised from 1 April 2024.
Redcentric adds it is now very close to completing the acquisition phase of its strategy and returning the business to a more “normalised” footing.
It anticipates the 2025 financial year will see the return of healthy EBITDA margins approaching 25% and excellent cash generation, driven by high levels of recurring revenues underpinned by long-term customer contracts.