Gamma Communications confident after strong full-year results
By Josh White
Date: Tuesday 25 Mar 2025
(Sharecast News) - Gamma Communications reported a strong set of financial results for 2024 on Tuesday, supported by both organic growth and a series of strategic acquisitions.
The AIM-traded firm said group revenue rose 11% to £579.4m, while gross profit climbed 12% to £300.3m.
Adjusted EBITDA increased 10% to £125.5m, and profit before tax jumped 34% to £95.6m, helped by the absence of prior-year exceptional charges.
The company said adjusted profit before tax rose 14% to £111.9m.
Earnings growth was also robust, with fully diluted earnings per share up 31% to 72p and adjusted earnings per share increasing 13% to 85.1p.
Gamma declared a total dividend of 19.5p per share, up 14% year on year.
The firm ended the year with £153.7m in net cash, an increase of 14%, despite a slight drop in operating cash flow due to one-off working capital gains in 2023.
Gamma completed three acquisitions in 2024 - Coolwave, BrightCloud, and Placetel - and expanded further in early 2025 with the acquisition of Starface in Germany.
The addition of Starface and Placetel strengthened Gamma's position in the German SME cloud communications market, the board said, which it viewed as a key growth region due to its lower cloud adoption compared to the UK.
With more than 500,000 cloud seats now in Germany, Gamma said it was aiming to accelerate growth in continental Europe.
Across its business units, Gamma saw broad-based profit growth.
Gamma Business delivered an 11% rise in gross profit, while Gamma Enterprise grew by 14% due to new customer wins and the integration of cybersecurity-focused acquisitions.
European operations posted an 18% increase in gross profit, including strong contributions from Placetel.
Looking ahead, the company said it expected continued organic growth in 2025, with further support from recent acquisitions.
Early trading this year had been positive, particularly in Europe.
Gamma also confirmed its planned move to the London Stock Exchange's Main Market by May, and announced a share buyback of up to £50m in the first half of the year.
"Gamma has achieved another strong set of results, marked by robust revenue growth, stable margins, and healthy cash generation despite general soft macroeconomic performance in our two main markets of the UK and Germany," said chief executive officer Andrew Belshaw.
"Our broadened product set is resonating well with both channel partners and end users.
"As customers require more complex communications solutions, we continue to see opportunities to grow our revenues further."
Belshaw said the strength of Gamma's balance sheet had enabled the company to expand its capabilities, through both product development and strategic acquisitions.
"I am delighted to have welcomed the teams from Coolwave and BrightCloud to Gamma - their contributions will be invaluable as we continue to expand our solution set.
"I am also pleased to be able to say that Gamma is now a significant player in the German market following the acquisitions of Placetel and Starface; this gives us a fantastic opportunity to build a business in Europe's largest market.
"We expect significant medium- and long-term growth in this market as new technologies are adopted."
Andrew Belshaw said the company believed the firm's increased scale in Germany through acquisitions would drive more significant returns, allowing Europe to contribute more meaningfully to group growth in 2025 and beyond.
"Our resilient business model continues to help us mitigate the current macroeconomic uncertainties and I look forward with confidence given the medium-term market opportunity."
At 1056 GMT, shares in Gamma Communications were up 3.48% at 1,248p.
Reporting by Josh White for Sharecast.com.
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