Gamma Communications revenue rises 'strongly' in first half

Business communications provider Gamma Communications reported a 23% improvement in revenue in its first half on Tuesday, to £217.4m.

The AIM-traded firm said UK revenue growth in the period, which was largely organic, was 9% to £182m, while the European business grew revenues to £35.4m from £10.6m, including the inorganic growth from acquisitions in Spain and Germany.

Recurring revenue grew to £194.3m from £166.7m.

UK indirect business continued to grow, Gamma reported, with a focus on the existing partner base, as gross profit increased 7% to £69.2m for the six months ended 30 June.

Its UK direct business continued to deliver “very positive” growth, with gross profit increasing 18% to £26.4m.

The board noted that the 2021 figures included the results of Mission Labs since its acquisition on 3 March, and also reflected the exclusion of revenues from the Loop subsequent to its sale on 31 December.

Its European business saw gross profit increase to £16.1m from £6.2m year-on-year, primarily as a result of the inclusion of six full months of trading results for acquisitions which happened in 2020.

The level of gross profit was consistent with that earned in the second half of 2020, although with less favourable exchange rates and harder trading conditions in Spain.

Cash generation was described as “strong”, but the board said the net cash figure had reduced due to the acquisition of Mission Labs.

“We have delivered a strong business performance and a very good set of financial results in the first six months of 2021, with both our UK and European businesses continuing to develop positively,” said chief executive officer Andrew Taylor.

“We have begun to successfully knit together our desired Western European footprint and as part of a structured group operating model and growth strategy, we are working with our local management teams to both further enable and accelerate our long-term Cloud PBX growth across Europe.”

Taylor said that, despite the economic and business market impact of the Covid-19 pandemic, Gamma’s product performance was “very robust” as it continued to broaden and strengthen its market capabilities through the development and launch of new products and services.

“During the period we have reinforced the execution of our UCaaS strategy, which is progressing very well, with the strengthening of both our overall technology and product capabilities.

“As ever, we have continued to invest and strengthen both our direct and indirect channel propositions across all markets, with a focus on positively enabling our partners and our end-customers to be competitive and highly successful in their respective markets.”

At 1407 BST, shares in Gamma Communications were down 11.78% at 2,060p.