iomart Group (AIM:IOM) shares slid 11% after the cloud services group posted a steep fall in profits, flagged ongoing macroeconomic uncertainty and opted not to pay a dividend.
While revenue rose 13% to £143.5 million, thanks partly to its acquisition of Atech, adjusted profit before tax more than halved to £6.5 million, and earnings per share tumbled 65%.
Much of the weakness was linked to a decline in the group’s core cloud services division and a £52.9 million non-cash impairment charge, which pushed the group to a pre-tax loss of £53.2 million.
Operating cash generation also slowed, while net debt climbed sharply to £101.9 million following the Atech deal.
No final dividend will be paid, with management saying payouts will only resume once profits and debt levels improve.
Although first-quarter trading for the new financial year was in line with forecasts and new orders have picked up, iomart remains cautious, citing the uncertain economic backdrop and plans to find more savings and streamline operations if needed.
The share fell 3p to 25.5p.