Firm 'well positioned' in market
Iomart ‘will double in size over next five years’
Cloud company Iomart is expected to double in size over the next five years, said chief executive Angus MacSween.
Unveiling an 8% rise in half-year profits, he said recent acquisitions had helped build a strong platform for growth.
After announcing yesterday that it had acquired United Hosting for £11 million, Mr MacSween hailed another “good trading period” and said the company was well-positioned in its markets.
In a statement he said: “This has been another good trading period for the group, driven by both organic and acquisitive growth. The cloud market landscape that we occupy continues to evolve and with that, the long term recurring revenue opportunities for iomart.
“We believe we are well positioned in the market and remain confident in the group’s growth prospects.”
The company made its second acquisition of the year acquiring the managed hosting company United Communications, trading as United Hosting, for £11 million.
The deal will comprise £7.5m settled in cash on completion with the remainder paid on achieving performance targets.
This is the second acquisition of the year for Iomart. In June, it acquired SystemsUp, an IT consultancy specialising in the design and delivery of public cloud solutions.
United Hosting was founded in 1998 and provides managed, dedicated and shared hosting services and domains to approximately 6,500 customers, the majority of which are small businesses.
The company is based in Hemel Hempstead in Hertfordshire, where its main data centre facility is located. It also leases data centre space in London and in Dallas, Texas and has a support function based in India.
Mr MacSween (pictured), indicated earlier this year that more acquisitions were likely.
He said: “In line with previous acquisitions made by iomart, United Hosting is a profitable, growing business whose services reflect those we offer. As such, the business fits well within our acquisition criteria and will be a valuable addition to the Group.”
Speaking later to Daily Business, he said conversations were ongoing with a number of potential partner companies as the sector consolidates.
“We have doubled in size over five years and we hope to double again in the next five,” he said. This would be achieved through organic growth and acquisition.
“There is no doubt consolidation will continue. Our firepower is growing and inevitably we will have to make bigger acquisitions.”
Revenue for the six month to the end of September grew 16% to £36.4m (H1 2015: £31.5m) including 10% organic growth in the hosting operation (H1 2015: 8%); adjusted EBITDA growth was up 11% to £15.5m (H1 2015: £14.0m) and adjusted profit before tax rose 8% to £8.7m (H1 2015: £8.0m).
The co-founders of United Hosting, brothers Matt and Simon Wallis, will remain with the business.
Matt Wallis, director of United Hosting, said: “This is a huge opportunity to develop and grow the business. We are now backed by one of the leading providers of managed hosting and cloud services in the UK as well as a company with all the regulatory and financial strength that comes with being listed on the London Stock Exchange.
“Having met with Angus and his executive team we believe they can take us to the next level of success.”