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Iomart hikes dividend after 15% profit growth
27th Nov 2019 09:39
(Sharecast News) - Iomart boosted its interim payout on Wednesday, after it reported a double-digit increase in profit due to strong revenue growth.
The cloud computing firm booked profit before tax of £8.4m for the six months ended 30 September, marking a 15.0% rise when compared to the same period last year, as revenue jumped by 8% to £55.1m.
That led the AIM traded company to hike its interim dividend by 6.0% to 2.6p per share.
Growth in the company's turnover was driven by a 10% rebound in its cloud services operations, with the division having registered an increased level of larger, more complex enterprise contract wins, whose revenue would begin to be recognised in the second half of the year and beyond.
And while revenue from the Easyspace IT services business fell from £6.7m to £6.3m, Iomart said the decline was offset by margin improvement.
Iomart said increased investment in its sales operations has resulted in an acceleration in organic growth rates, with order growth clocking in well ahead of the pace seen during the prior period.
Chief executive Angus MacSween said: "This momentum, combined with high levels of visibility within our recurring revenue business model gives increasing confidence that we are on track for an improving trend in our organic growth. In addition, we continue to see opportunities to enhance this growth through acquisitions.
"With a wide portfolio of managed cloud services, we are confident in our ability to capitalise on the significant and sustainable market opportunity ahead, underpinning the group's long-term prospects."
Iomart shares were down 4.58% at 343.50p at 1515 GMT.
The cloud computing firm booked profit before tax of £8.4m for the six months ended 30 September, marking a 15.0% rise when compared to the same period last year, as revenue jumped by 8% to £55.1m.
That led the AIM traded company to hike its interim dividend by 6.0% to 2.6p per share.
Growth in the company's turnover was driven by a 10% rebound in its cloud services operations, with the division having registered an increased level of larger, more complex enterprise contract wins, whose revenue would begin to be recognised in the second half of the year and beyond.
And while revenue from the Easyspace IT services business fell from £6.7m to £6.3m, Iomart said the decline was offset by margin improvement.
Iomart said increased investment in its sales operations has resulted in an acceleration in organic growth rates, with order growth clocking in well ahead of the pace seen during the prior period.
Chief executive Angus MacSween said: "This momentum, combined with high levels of visibility within our recurring revenue business model gives increasing confidence that we are on track for an improving trend in our organic growth. In addition, we continue to see opportunities to enhance this growth through acquisitions.
"With a wide portfolio of managed cloud services, we are confident in our ability to capitalise on the significant and sustainable market opportunity ahead, underpinning the group's long-term prospects."
Iomart shares were down 4.58% at 343.50p at 1515 GMT.