Redcentric appoints new COO, says on track to meet FY expectations

AIM-listed IT managed services provider Redcentric announced the appointment of Mo Siddiqi as chief operating officer and expressed confidence that it will deliver results in line with its expectations for the year.

Siddiqi joins the group from IT infrastructure services provider Computacenter, where he was international director.

In a pre-close trading update for the first half to the end of the financial year ending 31 March 2017, Recentric said that its growth pattern has been similar to previously, with upper single-digit growth in recurring revenues boosted with acquisitions to deliver low double digit headline recurring revenue growth. This was offset by the planned continued reduction in low margin product sales.

The company said the realisation of synergies from prior acquisitions and a beneficial shift in the revenue mix have helped to drive a mid-teens percentage increase in earnings before interest, taxes, depreciation and amortisation.

Net debt is expected to have fallen from 1.0x EBITDA at the end of March 2016 to under 0.8x annualised adjusted EBITDA at the half year, reflecting stronger underlying cash-flow generation and growth in EBITDA.

Including the proceeds of the sale of the Cambridge network announced and received on 26 September 2016, net debt is expected to be around 0.6x annualised adjusted EBITDA at the half year.

Chief executive Fraser Fisher said: “Our focus on the provision of critical IT services delivered under long term contracts through a recurring revenue model has continued to provide stability for the business, and allowed us to continue to grow the business through the first half of the year. We have won a number of new customers and have expanded services to many existing customers which sets us up well for the second half of the year and beyond."

At 1140 BST, the shares were down 0.1% to 181p.