Newbury's Gamma Communications reports 13% increase in pre-tax profit in first half

Newbury-based Gamma Communications reported a robust first half performance, which saw a 13% increase in pre-tax profit as the company continues to grow the business.

The company provides so-called unified communications as a service (UCaaS) to UK and European markets. That's the cloud-based delivery of a variety of applications and services, such as messaging, online meetings, team collaboration and video conferencing.

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In the six months to end-June, Gamma reported profit before tax of £43.5 million, up 13% on the £38.4 million seen in the first half of 2022 on revenue of £256.2 million, up 9% compared to the year-earlier period.

Recurring revenue in the period grew to £229.7 million (H1, 2022: £208.7m) and remained high, representing 90% of the group's total revenue.

In August this year, the company noted it had acquired UK-based cyber security company Satisnet Limited, which will become part of Gamma Enterprise.

In a statement, Gamma Communications CEO Andrew Belshaw said: "We continue to deliver good financial growth and our broadened product set is resonating with channel partners and enterprise customers alike. In the UK the impending PSTN switch off has led to good early growth in our PhoneLine+ product.

"Outside the UK, we have worked hard to improve the underlying performance in our European businesses and have made good progress.

"We have seen excellent cash conversion in the period and the strength of Gamma's balance sheet has enabled us to continue to acquire capability, whether through product development or acquisition," he added.

"We have recently broadened our offering into the adjacent managed cyber security sector through the acquisition of Satisnet.

"We continue to see M&A as a way to supplement our organic growth and capabilities. Our resilient business model allows us to look forward with confidence."

The company declared an interim dividend of 5.7p a share, up from 5p in 2022 and told investors that growth was expected to continue into the second half.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) and adjusted earnings per share (EPS) are now anticipated to be in the top half of the range of market expectations, it said.

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