Cautious optimism for IT group despite inflationary pressures
Managed IT services business, Redcentric, has reported a robust performance in its unaudited results for the six months to 30 September 2024.
The Harrogate-headquartered company recorded a 5.8% revenue rise to £86.8m (H1 FY24: £82m), adjusted EBITDA of £18.2m (H1 FY24: £14.5m) and a reported pre-tax profit of £3.6m (H1 FY24: £700,000 loss).
Peter Brotherton, chief executive officer, said: “H1 FY25 marks the first reporting period to fully reflect the benefits of the investments made in FY22 and FY23.
“With the energy market returning to more normalised conditions, combined with the positive impact of energy conservation and integration measures implemented in FY24, the company has delivered strong financial results for the six months.
“The key performance indicators illustrate the solid progress achieved. Additionally, ongoing cost efficiency initiatives, both recently completed and currently in progress, are set to remove an additional £2.6m from the cost base on an annualised basis.
“Looking ahead, we anticipate valuation clarity and definable improved profitability from the strategic decision to separate reporting and implementation of growth initiatives to the core two businesses: Data Centres (DC) and the Managed Service Provider (MSP) business.”
Redcentric added that its recurring revenue remains at solid at 90.2% (H1 FY24: 91.2%) of total revenue, which it says reflects core stability and stronger growth in one-off sales in H1 FY25.
The firm notes its results have been achieved against a backdrop of continued inflationary cost pressures and significant license cost increases.
But it explains that actions taken during the course of H1 FY25 will alleviate some of these cost pressures and drive further increases in profitability in H2 FY25 and beyond.
The business notes events associated with global political elections and the domestic UK budget led to a more cautious and challenging sales environment.
However Redcentric says its pipeline is returning to a more healthy state providing cautious optimism for the remainder of the year.
