Main Menu

New chapter

Iomart has ‘short list’ of bolt-on acquisitions

Reece Donovan: new strategy

Cloud computing firm Iomart, said it has drawn up a short-list of acquisition targets as it re-aligns the business around key growth markets.

The company is in talks with its advisers ahead of approaching firms on the list.

CEO Reece Donovan told Daily Business that he hoped to conclude at least one deal in the next few months.

Mr Donovan launched a revised strategy around the growing hybrid cloud market following his appointment last October.

He said the firm would pay probably around 10 times Ebitda against a typical 5 to 7 times it had paid in the past.

He said the Glasgow company had made about 21 acquisitions over the past decade but this had been on hold as the company drew up its new strategy.

Follow Daily Business on LinkedIn

“We were not aligned to some of the biggest growth parts of the market,” he said.

“We did not buy a business in the last 12 months as we wanted to be sure that we were buying in line with the new strategy.”

In final results issued today the board said it had displayed resilience throughout the pandemic, despite a 25.7% fall in pre-tax profit to £12.5m for the year ended 31 March, from £16.8m in the previous year.

Adjusted EBITDA was down just 4.8% to £41.4m from £43.5m. Revenue was broadly flat at £111.9m (2020: £112.6m).

Mr Donovan said it was important to note that the profit would be eroded as it entered new markets, but it was still in the top league in terms of margins


The company is proposing a 14.5% increase in the final dividend to 4.5p from 3.93p last time.

Mr Donovan said: “The year covered by this report coincided almost to the day with the onset of the pandemic in the UK. We can look back with pride on what has been achieved during this unprecedented time for all of our employees and wider stakeholders.

“We have now begun a new chapter for iomart, and I am proud to be at the helm of this great team. We have identified a significant market opportunity, growing our propositions in hybrid cloud, security, the digital workplace and connectivity, supporting our customers as they adapt to new ways of working now and in the future.

“We have proven the robustness of our business, underpinned by high levels of recurring revenues, breadth of customer base and strong cash generation.

“This is now enhanced with a clear strategic vision and roadmap to re-position the group for growth, both organically and through selective acquisitions, and the board is increasingly confident in the positive outlook for the long-term prospects for the group.”

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.