14
January 2025
Gamma Communications
plc
Expectations for full year
Adj. EBITDA and Adj. EPS (fully diluted) growth
reconfirmed*
Gamma Communications plc ("Gamma" or
the "Company"), a leading provider of technology-based
communication services across Europe, issues its scheduled trading
update for the year ended 31 December 2024.
Group overview
The Board anticipates reporting a
group financial performance in line with market consensus*, with
Adjusted EBITDA within the consensus range and Adjusted EPS (fully
diluted) in the upper half. This demonstrates healthy year-on-year
growth for the year ended 31 December 2024, driven by organic
growth and supported by acquisitions.
Key
trading highlights include:
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In the UK, there have been continued
strong performances across both the Gamma Business and Enterprise
business units.
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Both business units delivered gross
margins consistent with those in the first half of the
year.
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Gamma Business demonstrated positive
net seat additions across our cloud and connectivity suite of
products. Gamma has now passed the significant milestone of
achieving a base of over one million cloud seats in the
UK.
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In a competitive market, our
Enterprise business continues to perform well. We are pleased to
have won contracts with notable clients such as Morrisons
Supermarkets, Equiniti and Quilter, and Dorset NHS and Westminster
City Council in the public sector.
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Europe continued to perform in line
with expectations on a constant currency basis, driven by healthy
organic growth in Germany, further enhanced by the acquisition of
Placetel.
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The Company has also announced today
that it has reached an agreement to acquire the entire issued share
capital of SF Technologies Holding GmbH (trading as STARFACE),
excluding transaction costs, for a cash payment of €196m (c.£165m)
on a debt-free / cash-free basis, subject to customary regulatory
clearance. STARFACE is a leading provider of IP telephony solutions
for SMEs in Germany.
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Balance sheet
The closing net cash balance at 31
December 2024 increased to £153.7m (2023: net cash £134.8m) driven
by Gamma's continued high operating profit cash conversion. This
increase was after the acquisitions of Coolwave and BrightCloud, as
well as the successful completion of the share buyback programme.
The acquisition of STARFACE is expected to be funded through
approximately £125m from Gamma's existing cash resources, with the
remaining £40m funded through a new £130m multicurrency Revolving
Credit Facility. The undrawn portion of the facility will be
available for further uses, in line with Gamma's balanced approach
to capital allocation. The debt facility
will have a three-year term, with an option to extend for an
additional 12 months.
Main Market Listing
As highlighted in September and
confirmed in our recent update in December, Gamma intends to move
to the Main Market. In line with previous guidance, we expect to
complete the move in Q2 2025 with relevant workstreams progressing
as planned.
The Board expects to announce
results for the year ended 31 December 2024 and also give an update
on the proposed move to the Main Market, on Tuesday 25 March
2025.
Andrew Belshaw, Chief Executive,
commented:
"I
am pleased with the results we have achieved in 2024. We have
strengthened key relationships with our technology partners by
helping them bring their products into our market, and with our
channel partners, by providing them with an expanded range of
products to sell to their SME customers.
I
would like to thank our team for all of their hard work and
commitment throughout the year and look forward to updating
shareholders in more detail on all of the progress we've made in
our full-year report in March."
*
Company compiled range is based on known sell side analyst
estimates. The current consensus ranges for the full year ended 31
December 2024 are Adjusted EBITDA £124.0m - £127.4m and Adjusted
EPS (fully diluted) 80.3p - 88.4p, as at 13
January.
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Enquiries:
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Gamma Communications plc
Andrew Belshaw, Chief Executive
Officer
Bill Castell, Chief Financial
Officer
Rachael Matzopoulos, Company
Secretary
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Tel: +44 (0)333 006 5972
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Peel Hunt (NOMAD & Broker)
Neil Patel / Benjamin Cryer / Kate
Bannatyne
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Tel: +44 (0)207 418 8900
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Deutsche Numis (Broker)
Simon Willis / Hugo Rubinstein /
Spencer Clark
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Tel: +44 (0)207 260 1000
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Teneo (PR Adviser)
James Macey White / Matt Low / Ffion
Dash
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Tel: +44 (0)207 353 4200
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Notes for editors:
Gamma Communications plc is a
leading provider of technology-based communication services across
Europe. Gamma is admitted to trading on AIM and employs
approximately 2,000 people. Offering a range of Unified
Communications, mobile, security and connectivity services, Gamma
provides robust and secure end-to-end business communication
solutions, enabling organisations to communicate, collaborate and
offer a better customer experience.
Gamma's vision is for a
better-connected world in which it can work smarter for the benefit
of business, people, and the planet. Its primary market is the UK,
where it delivers network-based services to SME, Public Sector, and
Enterprise markets through its extensive network of trusted channel
partners and direct sales and support capabilities. Expanding its
presence in Europe, Gamma is continuing to grow its group of
businesses focused on digital transformation by delivering services
to customers via a network of channel partners in Germany, Spain,
and the Benelux region.
For more information about Gamma and
its comprehensive range of products and services, please
visit www.gammagroup.co