AdEPT Technology Group PLC (AIM:ADT) is on track to achieve management expectations in the current fiscal year after a strong first-half performance.
The provider of managed services for information technology, unified communications, connectivity, voice and cloud services, saw group revenue increase by 20% to £34.3mln in the six months to the end of September from £28.5mln in the corresponding period of 2019; this was despite the deferral of £0.9mln of revenue into the second half of the current year as a result of global supply chain issues and customer resource allocation.
The group’s Cloud-Centric Strategic Services division was an outstanding performer, achieving 19% revenue growth – 6% on a like-for-like (LFL) basis to £14.6mln.
Managed services rose by 4% on an LFL basis and now form 87% of revenue, up from 82% in the same period of 2020, as the group continues to shift the focus away from Telephony, which was once the core of the business.
Underlying earnings (EBTIDA) improved by 16% to £5.7mln from £4.9mln the year before while the underlying EBITDA margin held steady at 17%.
The group posted a loss before tax of £869,000, compared to a profit the year before of £18,000, largely reflecting £3.58mln amortisation of intangible fixed assets (2020: £2.91mln).
Cash and cash equivalents at the end of September stood at £3.6mln, versus £5.1mln a year earlier. Net senior debt rose to £31.2mln from £25.6mln at the start of the reporting period, with £9.0mln of cash used to fund the strategic acquisition of Datrix in April 2021. The group intends to use its strong cash generation to reduce net senior debt in the second half of the year.
Customer debt collection improved to 39 days from 45 days the year before.
“AdEPT is on track to achieve management expectations for FY22, with £0.9 million of revenue and its associated margin, deferred from H1 [first half] due to supply chain issues and customer resource allocation, underpinning the board's confidence. The group's strategic progress, coupled with a strong pipeline of opportunities across the public and private sectors, driven by macro technology market trends, ensure that the prospects for AdEPT are stronger than ever,” said Ian Fishwick, the chairman of AdEPT.
The board has opted not to recommend the payment of a dividend, preferring to use the money to pay down debt.
Shares in AdEPT were up 2.4% at 215p in early deals.