Glasgow-based web hosting firm eyeing further acquisitions
Data storage and cloud computing specialist iomart has reported a 66 per cent rise in first-half pre-tax profits on the back of strong organic and acquisition-led growth.
Chief executive Angus MacSween said the business will be looking to add further acquisitions going forward after agreeing a £20 million debt facility with Lloyds Banking Group.
The Glasgow-based group has today reported pre-tax profits for the six months to September 30, adjusted to reflect acquisitions, rose from £3 million a year ago to £4.9 million on a 29 per cent rise in revenue to £19.9 million.
Earnings before tax and other operating costs rose by 51 per cent in the year to £7.6 million which iomart put down to “substantial” new and repeat business wins across all divisions.
First-half acquisitions included Manchester-based Melbourne Server Hosting in a £6.7 million deal, Surrey-based Skymarket Ltd in a £1.4 million deal and St Asaph-based Internet Engineering Ltd in a £1.5 million deal.
The impact of the acquisitions of Skymarket, Global Gold and the Switch Media Group helped lift revenues at iomart's micro and SME webhosting division Easyspace by 13 per cent in the first half to £5.3 million.
MacSween said: “We will continue to look for good bolt-on acquisitions, though not for the sake of it - only if they fit and add value and add customer bases, and that will continue, but we won't buy things just for the sake of buying them.
“You will see us having more data centre capacity and platform presence internationally going forward, and we already have a number of platforms in the United States and we also have some in the Far East, but the UK market remains our primary focus.
“Our belief is, if we can push on open doors why make life difficult?
“Our strategy is built on big infrastructure and owning that infrastructure end to end and replicating that overseas would be difficult and expensive, but what we will do is deliver more platforms and services across the planet.
“But there is enough growth in the UK, so there is no point in us making life difficult trying to sell to someone in Madrid when there is no shortage of growth in the UK and we will continue to stay focused on that for the moment.
“That said, we continue to aggregate traffic from all over the world, which we don't make a lot of noise about, but you will see more of that this coming year.”
Iomart's managed hosting division posted a 36 per cent rise in revenue to £14.6 million for the first half, mainly through the sustained addition of managed hosting contracts together with the contribution from the acquisitions of Glasgow-based EQSN in November 2011 and Melbourne Server Hosting.
The group also deployed a 1,860 kilometre, business-critical fibre superhighway across its network of six UK datacentres in the first half as a result of a 10-year, multi-million pound contract with Geo Networks Ltd.
This new fibre network links its data centres in London, Glasgow, Manchester, Maidenhead, Nottingham and Leicester.
Iomart said connectivity between its Glasgow and London data centres would be four times faster than the current industry average as a result of the fibre upgrade.
MacSween says despite a tough UK business climate, the drive for business to have an online presence and service delivery online is now “unstoppable”.
He said: “We are in a good place because more and more business is being driven online and if businesses don't have an online presence going forward it is likely their business is pretty much doomed and people are coming to understand that more.
“The underlying fundamental shift of products and services being delivered over the web is unstoppable now and there is so much of that which hasn't been addressed yet and it is very unlikely there are many board meetings going on around the country where they are taking decisions to cut back on their online spend.”
Shares in iomart rose 1.7 per cent in early trading today.