GKSD - stock.adobe.com
Iomart H1 update shares progress on hybrid cloud strategy
Channel player’s trading update reveals the state of the business prior to the acquisition of Atech last month
Iomart has been on a mission to strengthen its hybrid cloud provider position, using acquisition as a tool to bolster its offering.
Investors were given an insight into how its Bigger, Better, Bolder strategy has been going, after the channel player shared half-year numbers for the six months ended 30 September.
The firm had already warned the markets that H1 was challenging, and the numbers were in line with those expectations, with revenues flat year-on-year. Adjusted pre-tax profits fell by 44%, dropping from £7.6m to £4.3m.
The half-year update indicted that momentum in order bookings continued at around 30% ahead of H1 2024.
The H1 update indicated the firm has continued to streamline its operating model, putting sales, product management, marketing, and customer deployment and management under single leaders.
The business had also strengthened relationships with key vendors, including Microsoft, Broadcom VMware and Commvault, introducing more joint go-to-market and R&D programmes.
Just after the half-year closed, Iomart picked up Atech, which has strengthened the capabilities and credentials of the business. The previous fiscal year, M&A activity contributed £3.7m of revenue, but that was negated by a lower level of renewals and timing of order billings.
Building on progress
Iomart CEO Lucy Dimes said the firm was well placed to build on progress into its second half.
“The Atech acquisition is a key step in delivering our Bigger, Better, Bolder strategy,” she said. “The strength of the combined business, our order bookings momentum, and the transformation and efficiency programmes we have put in place mean we have entered the second half of the year in a considerably strengthened position.
“Our enlarged group and combined skills will allow us to compete more robustly with enhanced services, greater scale and references across the growth areas of our industry. Through the combined power of Atech and Iomart, we now have the accreditations, credentials and capabilities to convert a greater proportion of our sales pipeline, as well as unlock increased cross-sale opportunities.”
Dimes has been CEO of the firm for just over a year, but the business has already established a pattern of using acquisition as a vehicle to bolster its position, particularly around Microsoft cloud services. The firm has made moves in the past 18 months to expand its customer base and access to technical expertise.
She said the market conditions were also working in their favour, with customers looking to managed service players for increased support.
“The growing demand for cloud computing and cyber security solutions, increasing complexity of the technical landscape, and accompanying need for a trusted and highly accredited partner with a strong delivery track record, give the board confidence in the outlook for the group and our ability to become the UK’s leading secure hybrid cloud provider,” said Dimes.
