AdEPT Technology Group PLC (AIM:ADT) said order intake in the final quarter of its financial year to 31 March 2022 was strong.
The information technology services provider has seen its business affected by the pandemic and the subsequent supply chain disruption caused by electronic chip shortages. Although these issues have caused some project delays, the company still expects results for the year to end-March 2022 to be broadly in line with current market forecasts.
The group added more than 100 new customers during the reporting period with customer demand steadily gaining momentum to deliver markedly stronger order intake in the last four months of the fiscal year.
AdEPT said the acquisition of Datrix has proven to be a great success, with the team securing significant projects with organisations such as Nottinghamshire County Council, the Royal Surrey County Hospital, Public Health England, Trident and Selwood Housing.
The solutions being deployed by this team encompass SD-WAN/SASE2, a marketplace that widely respected analyst IDC expects to grow through 2025 at a compound annual growth rate (CAGR) of 18.9%.
The group expects to pay between £4mln and £4.8mln in earn-out fees related to the Datrix acquisition this year.
Following a strategic review of the business, the board considers the group to be ideally placed to capitalise on its market position and focus on the organic growth opportunities available.
The company’s business consultant placed an £11bn valuation on the core addressable market for AdEPT in the UK. The high growth parts of this marketplace, namely cloud services (circa 15% CAGR), are being fuelled by the growth in public cloud-hosted Infrastructure as a Service (IaaS), Software as a Service (SaaS), and cyber security (CAGR of 9%).
AdEPT’s evolution over recent years to a broader-based services provider in the information and communications technology (ICT) sector leaves the group well-placed to benefit from market trends.
Following the review, the group’s strategy will henceforth be built on three pillars: a focus on organic growth; a “full-flex” working model that will provide a structure for success; a reduction in gearing, with the group targeting a ratio of less than 2.0 for underlying earnings (EBITDA):senior net debt.
“Our strategy to consolidate the fragmented market in which we operate has created a significant organisation serving many customers. AdEPT is now a strong business with full capability and is well placed to capitalise on the anticipated growth in its key markets and capture increasing 'wallet share' in the ICT space,” said Ian Fishwick, the chair of AdEPT.
Phil Race, the group’s chief executive, noted that the UK is gradually emerging from the challenges of COVID and the constraints of lockdown and has witnessed changes to working patterns coupled with the demand for secure digital services in all its guises.
“We cannot ignore the macro-environmental challenges; however, AdEPT anticipates that demand will rise as our prospects and clients assess their long-term ICT requirements - the strategic study undertaken during the period provides ample evidence of demand for implementing and integrating cloud-centric technologies, streamlining contact centres, deploying new high-speed resilient networks, and adopting secure ICT platforms, which protect against a myriad of cyber threats,” Race said.
“With its comprehensive portfolio of capabilities, its extensive and strong industry partnerships, a number of flagship references from across the public and private sector, all underpinned by the One AdEPT platform, AdEPT is well placed to benefit from these accelerated strategic IT investments,” Race asserted.