LONDON (ShareCast) - (Sharecast News) - Cloud computing specialist Iomart Group reported steady progress in its first half on Tuesday and announced the acquisition of Accesspoint Technologies.

The AIM-traded firm recorded revenue of £62m for the six months ended 30 September, marking an 18% increase compared to the prior year.

It achieved 94% recurring revenue, remaining consistent with the same period in the 2023 financial year.

Adjusted EBITDA reached £18.6m, reflecting a 5% increase, while adjusted profit before tax showed 3% growth to £7.6m.

However, profit before tax declined 10% to £4.4m, and basic earnings per share decreased 11% to 3.1p, while adjusted diluted earnings per share remained stable at 5.2p.

The company generated cash from operations of £16.8m, marking a 16% increase.

Operationally, Iomart said it made significant strides in enhancing its capabilities and offerings.

The company intensified its sales and marketing efforts, resulting in improvements in order bookings and pipeline development.

It said the acquisitions of Concepta and Extrinsica expanded its routes to market and enhanced its customer proposition.

Looking ahead, Iomart Group anticipated continued year-on-year momentum, driven by ongoing sales channel and services initiatives and contributions from its recent acquisitions.

It said current trading aligned with the board's expectations.

"I'm pleased to report on another period of progress at Iomart," said chief executive officer Lucy Dimes.

"We continue to build on our existing strong foundations as a well-established and trusted service provider within the private cloud space, at the same time as extending our service offering across the wider and higher growth hybrid cloud market."

Dimes said Iomart saw a "great opportunity" ahead.

"For the UK to thrive as an economic powerhouse, its businesses will need to increase efficiency, operate at pace and adapt - leveraging cloud, data and digital technologies.

"Our blend of both IT and connectivity skills combined with our secure, scalable, resilient cloud and network infrastructure uniquely positions us to support the ambitions of our customer base, giving us confidence in our ability to participate successfully in the growing cloud sector."

In a separate announcement, Iomart said it was making another strategic move on Tuesday by acquiring Accesspoint Technologies - a company based in northeast London, primarily focusing on providing IT hosting services tailored to the UK legal industry.

It said Accesspoint offers various managed and hosted services, including infrastructure hosting, software licensing, security management, business continuity services, and communications provisioning.

The acquisition would add to Iomart's existing capabilities and bring industry expertise and a capable team with a strong reputation within the legal sector.

In combination with Iomart's existing legal customers, adding Accesspoint's customer base would consolidate Iomart's position in a critical sector, the board explained.

For the year ended 31 August, Accesspoint Technologies reported revenues of £3.8m and adjusted EBITDA of £0.8m, unaudited.

The cash transaction would see an initial consideration of £4.5m on completion, with potential additional payments of up to £0.5m contingent on post-acquisition milestones.

Additionally, there was a contingent earn-out payment of up to £1.4m based on Accesspoint's profitability for the 12 months ending 31 August 2024.

Iomart said it planned to finance the initial consideration through a combination of existing bank facilities and cash available on its balance sheet.

The vendors of Accesspoint comprised its existing directors, Richard Roebuck, Victor van Der Poel and Gary Shaw.

"The flow of sensitive data and drive to adopt technology to provide enhanced customer service within the legal sector means that data management, security and data sovereignty are all pressing considerations for legal firms and ones in which Iomart and Accesspoint excel," CEO Lucy Dimes said of the acquisition.

"We are delighted to welcome Accesspoint's growing list of customers into the Iomart Group and excited to be working with the full team to further advance iomart's differentiation in this sector and positively contribute to the group's overall organic growth plans."

At 1118 GMT, shares in Iomart Group were up 1.38% at 156.13p.

Reporting by Josh White for Sharecast.com.

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