Gamma Communications' (AIM:GAMA) shares climbed 11% after the telecoms group reassured investors with solid half-year results and guidance that full-year earnings will meet expectations, with earnings per share set to come in slightly ahead.
The company, which provides cloud-based communications services to businesses across Europe, reported revenue of £316.6 million for the six months to June, up 12% from last year.
Adjusted earnings before interest, tax, depreciation and amortisation rose 14% to £70.9 million, helping adjusted earnings per share climb 13% to 47.9p.
Growth was driven by Germany, where the acquisitions of Starface and Placetel have been performing strongly, supported by double-digit organic expansion.
Gross profit from the country rose to £34.4 million, up from £9.8 million a year earlier, representing about a fifth of group gross profit. UK performance was more muted, reflecting weaker conditions for small and medium-sized firms.
Chief executive Andrew Belshaw said: “Gamma has achieved another strong set of results. Our German business, bolstered by our recent acquisitions, has performed particularly strongly, while the performance in the UK has been resilient in spite of a continuing challenging macro-economic backdrop.”
The group completed a £45.1 million share buyback during the half-year, on top of £27.3 million in 2024, and declared an interim dividend of 7.4p, up 14%.
Cash conversion remained robust at 90%, though Gamma swung to net debt of £21.6 million following acquisitions and buybacks.
Looking ahead, Gamma expects continued growth in Germany and is targeting a mix of cost cuts and investment in the UK to protect profitability.
Belshaw said mergers and acquisitions remain a “key tool” for expansion, with the group’s high recurring revenues and strong cash flow supporting further deals.
Gamma’s move to the FTSE 250 in June has further raised its profile with investors.
The shares rose 120p to 1,184p.