Robust growth at IT business following acquisitions

IT managed services provider, Redcentric, has reported a rise in revenues of more than 15% in its provisional results for the year ended 31 March 2024.

The Harrogate-headquartered business recorded revenues of £163.1m for FY 2024 (FY 2023: £141.7) along with adjusted EBITDA in FY 2024 of £28.4m (FY 2023: £24.5m).

It says these results reflect the benefits of the first full year of trading contribution from the 4D Data Centres and two Sungard asset acquisitions made in FY23.

Redcentric notes they also reflect the delays in implementing the new cooling infrastructure at its London Technology Centre and the closure costs of its Harrogate data centre both of which will benefit performance in FY25.

Peter Brotherton, chief executive officer, said: “FY24 was a very productive year with all the original integration programmes completed, generating cost savings either in line or slightly ahead of our expectations. 

“The electricity conservation measures were implemented later than expected but are now yielding very significant savings which are slightly ahead of our original run rate expectations. 

“These volume savings, combined with secured lower electricity prices from 1 April 2024 are expected to reduce electricity costs by £8.1m in FY25.

“Looking forwards, our key tasks for FY25 will be to continue to drive organic growth and focus on delivering productivity gains to drive improved margin and cashflow performance.”

Redcentric adds the closure and decommissioning of its Harrogate data centre was completed at the end of March 2024 in line with the company’s plans.

It says that while most of the customers were successfully migrated to the firm’s Elland data centre, four of the larger customers unexpectedly decided to cancel their contracts.

The business’s update explains: “The annualised revenue and profit from these customers totalled £2.6m and £1.3m respectively, which will result in reduced associated revenues and profits of £2m and £1m respectively in FY25.

“However, this loss will be partly offset by reduced annual running costs resulting from the closure.”