Week Ahead

Iomart investors look for clues on deals activity

Lucy Dimes
Lucy Dimes: M&A is important to growth

Investors will be looking for indications of further acquisition activity at Scottish cloud computing firm iomart which is expected to deliver a solid set of financial results this week.

In an April trading update, Lucy Dimes, who took over as CEO from Reece Donovan last year, said the Glasgow-based firm’s three most recent acquisitions have all added recurring revenue growth in the post-acquisition period.

She said the firm sees “continued M&A activity as an important part of strengthening our overall capability and market growth plans.

“We continue to be active in the identification of targets which add skills, experience and capability to enhance our proposition, as we drive the business to be the UK’s leading secure cloud services provider.”

The market is expecting revenue growth of 10% to approximately £127m and adjusted EBITDA growth of 4% to £37m.

Adjusted profit before tax should come in at about £15m, reflectinga hike in interest charges to £4.3m (FY23: £2.9 million). Recurring revenue remains high, at c.91% of group revenue.

Stocks in London were expected to open lower on Monday, with all eyes on the latest interest rate decision from the US Federal Reserve.

The US Fed will announce its latest interest rate decision on Wednesday this week. At the central bank’s fourth meeting of 2024, the Fed is expected to leave interest rates unchanged.

Last week saw the Bank of Canada and European Central Bank break the trend of keeping interest rates unchanged. Both central banks cut interest rates by 25 basis points, as expected by markets.

In Europe, far-right parties made striking gains in EU elections on Sunday, while the ultimate losers were French President Emmanuel Macron – and the Greens, AFP reports.

In France, Macron’s liberal party received a drubbing by France’s National Rally led by Marine Le Pen. The French president responded by swiftly dissolving France’s national parliament and calling for snap elections.

In Japan on Monday, the Nikkei 225 index in Tokyo was up 1%.

At home there is economic data on unemployment and wage growth on Tuesday, while figures on manufacturing, construction and industrial output are due on Wednesday.

Company data is due from First Group, Tesco and the housebuilders Bellway and Crest Nicholson.

DIARY

Tuesday 11 June

  • Full-year results from Oxford Instruments and FirstGroup
  • Trading statemet from Bellway
  • UK unemployment and job vacancies
  • UK wage growth

Wednesday 12 June

  • Full-year results from Molten Ventures
  • First-half results from Safestore
  • Trading statement from WH Smith
  • UK manufacturing, construction and industrial output
  • Chinese consumer price inflation
  • US consumer price inflation
  • US oil inventories
  • In the USA, quarterly results from Broadcom

Thursday 13 June

  • Full-year results from Fuller Smith & Turner and GB Group
  • First-half results from Crest Nicholson, Virgin Money UK
  • UK RICS house price index
  • German wholesale price inflation
  • US producer price inflation
  • US weekly initial unemployment claims
  • In the USA, quarterly results from Adobe, Kroger, Jabil and Signet Jewelers

Friday 14 June

  • Trading statement from Tesco
  • Interest rate decision from the Bank of Japan


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