**Summary of Iomart Group PLC Half-Yearly Results (H1 FY26)**
**Financial Highlights**
**Revenue Growth** Total revenue increased by 25% to £77.7 million (H1 FY25: £62.0 million), driven by the £21.7 million contribution from the Atech acquisition.
**Organic Revenue Decline** Organic revenue declined by £6.0 million due to customer churn in the prior year.
**Adjusted EBITDA** Fell to £12.9 million (H1 FY25: £17.0 million) due to a shift in revenue mix and lower recurring revenues in legacy services.
**Adjusted Loss Before Tax** Reported a loss of £2.5 million (H1 FY25: £4.3 million profit), impacted by lower EBITDA and higher interest costs related to the Atech acquisition.
**Net Debt** Increased to £109.6 million (31 March 2025: £101.9 million), with £97.5 million drawn on the £115 million Revolving Credit Facility.
**Strategic Highlights**
**Customer Renewal Rates** Improved renewal rates and positive net order bookings support future revenue growth.
**Microsoft-Connected Services** Now represent 30% of Group revenue (H1 FY2024: 7%), reflecting successful strategic repositioning and the Atech acquisition.
**Atech Contribution** Significantly expanded Microsoft and managed cyber security capabilities, contributing £25.6 million in revenue.
**Cost Efficiencies** Achieved £4 million in annualised cost savings, with further initiatives underway.
**Business Model and Operational Changes**
**Business Units** Strengthened focus on three core units: Domain & Mass Hosting (Easyspace), Iomart Cloud Services, and Atech, each led by dedicated teams.
**Operational Simplification** Centralised customer bases into a single ERP system for efficiency and clarity.
**Technology Advancements** Deployed Broadcom vCloud Director for enhanced private cloud functionality.
**Outlook**
**H2 Performance** The Board anticipates improved performance in H2, with full-year results expected to be within market expectations.
**Revenue Growth Initiatives** Focus on onboarding managed security customers, productising AI services, maximising indirect channel sales, and leveraging Broadcom partnerships.
**Cost Optimisation** Continued focus on reducing structural data centre costs and operational efficiencies.
**Financial Position** Aim to manage net debt through positive cash generation, cost optimisation, and disciplined working capital management.
**Market Dynamics**
**Hybrid Cloud Adoption** Increasing demand for hybrid cloud solutions driven by regulatory compliance, cost optimisation, and operational resilience.
**AI and Automation** Growing demand for AI-enabled services, with Iomart launching new offerings in H2.
**Security and Compliance** Rising cyber threats and regulations are driving demand for managed security services.
**Conclusion**
Iomart Group PLC is undergoing significant strategic and operational realignment to position itself for sustainable growth in the evolving cloud services market. Despite short-term financial challenges, the company is focused on leveraging its strengthened capabilities, cost efficiencies, and market opportunities to improve performance in the second half of the year and beyond.
| Metric | H1 FY26 (£m) | H1 FY25 (£m) | FY25 (£m) | Change H1 FY26 vs H1 FY25 |
|---|---|---|---|---|
| Total Revenue | 77.7 | 62.0 | 143.5 | +25% |
| Adjusted EBITDA | 12.9 | 17.0 | 34.3 | -24% |
| Adjusted EBIT | 2.1 | 6.6 | 12.8 | -68% |
| Adjusted (loss)/profit before tax | (2.5) | 4.3 | 6.5 | N/A |
| Net debt | 109.6 | 48.1 | 101.9 | +128% |
| Bank revolver loan less cash | 92.4 | 29.8 | 83.9 | +210% |
Key Observations:
- Revenue increased by 25% YoY, driven by the Atech acquisition (+£21.7m) and organic growth.
- Adjusted EBITDA declined by 24% YoY due to lower recurring revenues and higher costs associated with the acquisition.
- Net debt increased significantly (+128% YoY) due to the Atech acquisition and drawdown on the revolving credit facility.