AdEPT Technology Group PLC (LSE:ADT) said it has traded in line with its expectations in the first four months of its financial year.
As well as adopting a new environmental, social and governance (ESG) framework based on the UN Global Compact initiative, the IT services group said management’s priority for the next six months will be to pay down debt and then will review the dividend policy at the end of the year ending 31 March 2022.
Organic growth has delivered improvements in recurring revenues for cloud-centric services both ahead of the first and final quarters of the past financial year.
Revenues in one-off services are also up year-on-year with demand for technology products returning and a trend of repeated business from existing clients for one-off purchases.
While wider industry supply issues caused by the global chip shortage have the potential to delay the delivery of some products and associated services, AdEPT said it is working with partners to mitigate supply chain delays where possible.
With the increased amount of working from home seen around the world during the first half of 2021, AdEPT said the increased decline in traditional telephony revenues is “as expected” and “unlikely to stabilise until employees return more fully to onsite working”, saying this area now accounts for only 12% of total group revenues.
Cash generation in the quarter was said to have remained strong, with £2.5mln of operating cash flow at a 96% level of cash conversion.
Net debt at the end of June stood at £32mln, up from £25.6mln at the end of March, following the £9mln acquisition of Datrix in April 2021, with the positive cash generation resulting in net cash outflow of £7.5mln in the period.
Ahead of schedule, Datrix has been migrated onto the One AdEPT operating system, which the company said demonstrates it ability to deliver its consolidation strategy in what remains a fragmented market.
Since arriving, Datrix has secured contract renewals and new business wins, as well as receiving positive client feedback about the benefits of being part of a larger business.
AdEPT said it is continuing to develop its product suite, with the launch of a new software product for the education market, comprising a low-cost synchronising utility, 'Nimbus Sync', designed to help schools synchronise their cloud-based learning platforms with their management systems.