Week Ahead

Dimes’ first Iomart figures since taking CEO role

Lucy Dimes: stepped up to CEO

Lucy Dimes will present her first figures this week since taking over as CEO at cloud computing and data centre company Iomart in September following the surprise departure of Reece Donovan.

Ms Dimes was appointed executive chair at the Glasgow-company’s AGM less than a month earlier, having been non-executive chair since last year. She stepped in as CEO to replace Donovan who had been in post for two years.

In a trading update in October she said it had been a solid first half of the financial year, seeing growth in both revenue and profitability and there were “powerful building blocks” to take iomart forward with confidence.

Tuesday’s interim results may throw more light on the change at the top, but analysts have been concerned at a decline in the stock’s value and a pattern for paying most of its profits as dividends to its shareholders.

Simply Wall St analysts say this may go some way to explaining why its earnings have been shrinking. The business is only left with a small pool of capital to reinvest – a vicious cycle that it says does not benefit the company in the long-run.

On the upside, more than 90% of its revenue is recurring and its cash conversion ratio is 94%. The order book growth for the cloud managed services business was in the double digits. Companies are only going to need more cloud services and the cash being pumped out means Iomart is still interesting for investors.

The company anticipates revenue growth of approximately 18% for the six months to £62m (H1 FY22: £52.6m), with adjusted EBITDA up 4% to about £18.5m (H1 FY22: £17.8m).

Given the bank interest rate increases since last year, the adjusted profit before tax is expected to see a more modest increase to about £7.5m (H1 FY22: £7.4m).

Ms Dimes has had a number of executive roles across technology and telecoms companies including BT, Nokia, and Fujitsu in a career spanning more than 25 years.

Shares in the high-end housebuilder Berkeley stand at a twelve-month high, buoyed by management’s ambitious plans for housing completions, profits, and cash returns to investors by 2025, as well as hopes for interest rate cuts from the Bank of England in 2024.

Berkeley, reporting on Friday, provided a trading update in October and AJ Bell says that may also have helped sentiment.

Longstanding chief executive Rob Perrins reaffirmed the earnings guidance for the year to April 2024 given alongside the full-year results for fiscal 2023 back in June, and it is by that guidance that these interim results are likely to be judged.

City Diary

Monday 4 December

  • US factory orders

Tuesday 5 December

  • Full-year results from SSP Group,Victrex, On The Beach, Gooch & Housego and Marston’s
  • First-half results from Iomart, Moonpig and CML Microsystems
  • BRC UK retail sales monitor

Wednesday 6 December

  • Full-year results from TUI, Paragon Banking and Tritax Eurobox
  • First-half results from Redde Northgate
  • Analysts’ meeting at Weir
  • Bank of England Financial Stability Report
  • UK construction industry purchasing managers’ index (PMI)

Thursday 7 December

  • Full-year results from AJ Bell, Future
  • First-half results from Frasers, DS Smith, Yellow Cake and Quiz
  • Trading statement from Balfour Beatty
  • Halifax UK house price index
  • First half results from Berkeley

Friday 8 December

  • First half results from Berkeley

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