Redcentric eyeing M&A opportunities as annual profits beat forecasts

15th Jun 2015 08:05

IT managed services provider Redcentric beat analysts' forecasts with its full-year results on Monday and said it was looking at further acquisitions following the takeover of Calyx in April.The AIM group reported revenues of £94.3m for the year to 31 March, up 62% on the year before, representing organic growth of 8%.Recurring revenues were 13% higher organically than the previous year at £76.8m and now account for 81% of total turnover, from 71% previously.Adjusted earnings before interest, tax, depreciation and amortisation more than doubled to £21.4m (£10.5m previously).Analysts at broker FinnCap said revenues and EBITDA were 1% and 2% ahead of its estimates, respectively.Chairman Chris Cole said Redcentric was focusing on driving organic growth and integrating managed services outfit Calyx which was bought for £12m in April.The company is also "considering further appropriate acquisition opportunities that will augment the overall growth and performance of the business", Cole said.FinnCap, which lifted its target price for the stock from 180p to 205p, said Redcentric's ongoing organic growth and a return to the acquisition trail "will in turn give continuing momentum to the valuation potential in the share price as multiples respond".