**Summary of Redcentric PLC Half-Year Report (H1 FY26):**
**Corporate Highlights**
**MSP Focus** Redcentric PLC is shifting its focus to developing and growing its Managed Service Provider (MSP) business unit, aiming to build additional shareholder value.
**Leadership Changes** Michelle Senecal de Fonseca appointed as CEO in May 2025, and Tony Ratcliffe joined as CFO in August 2025.
**Data Centre (DC) Business Sale** Announced the disposal of the DC business for up to £127 million in cash, expected to complete by March 2026. This move allows the company to focus on the MSP opportunity, reduce leverage, and return proceeds to shareholders via a Tender Offer.
**Strategic Realignment** The sale enables the company to concentrate on the higher-margin MSP business, reduce debt, and improve cash flow.
**Updated MSP Strategy**
**Enhanced Cybersecurity** Plans to offer advanced cybersecurity solutions by integrating security products into customer offerings.
**Public Sector Focus** Leveraging MSPs market leadership to deliver managed services and sovereign cloud capabilities to the public sector.
**Partner Expansion** Expanding relationships with partners in vertical markets to accelerate growth.
**Operational Efficiency** Optimizing costs and investing in automation to scale the business.
**Financial Highlights (H1 FY26)**
**Revenue** £66.8 million (down 3.6% from H1 FY25).
**Recurring Revenue** £60.4 million (down 0.9%), representing 90.4% of total revenue (up from 88.0%).
**Gross Profit** £41.1 million (up 0.5%), with a gross margin of 61.6% (up from 59.1%).
**Adjusted EBITDA** £9.1 million (up 2.7%), with a margin of 13.7% (up from 12.8%).
**Reported Profit Before Tax** £1.9 million (up 18.7%).
**Net Debt** £68.6 million (up 2.9%).
**Total Operations (MSP + DC)**
**Total Revenue** £83.6 million (down from £86.8 million in H1 FY25).
**Recurring Revenue** £77.0 million, representing 92.1% of total revenue (up from 90.2%).
**Adjusted EBITDA** £17.4 million (down from £18.2 million).
**Gross Margin** Improved to 60.5% (up from 58.3%).
**Outlook**
**MSP Revenue** Expected to be broadly flat in FY26 due to leadership transition and DC sale distractions.
**Margin Expansion** Focus on cost discipline and operational efficiency.
**Growth Strategy** Enhanced MSP strategy to drive revenue and earnings growth from FY27 onwards.
**DC Sale Completion** Targeted by March 2026, enabling significant capital return to shareholders and debt reduction.
**Dividend Policy** Board to review dividend policy and potential share repurchase plan post-DC sale.
**CEO Comment** Michelle Senecal de Fonseca highlighted improved margins in the MSP business and expressed confidence in the growth strategy, emphasizing the strong recurring revenue model and market leadership.
**Chairmans Statement** Richard McGuire emphasized the transformational impact of the DC sale, the focus on MSP growth, and the potential for enhanced shareholder returns through debt reduction and capital allocation.
**CFO Review** Tony Ratcliffe detailed the financial performance, highlighting the focus on recurring revenue, cost management, and the strategic shift towards the MSP business.
**Conclusion** Redcentric PLC is undergoing a strategic transformation, focusing on its MSP business to drive growth, improve margins, and enhance shareholder value. The sale of the DC business is a key milestone, enabling debt reduction and capital return, with a clear growth strategy for the MSP segment in the coming years.
| Metric | H1 FY26 (Sep 2025) | H1 FY25 (Sep 2024) | Change |
|---|---|---|---|
| Total Revenue | £66.8m | £69.2m | -3.6% |
| Recurring Revenue | £60.4m | £60.9m | -0.9% |
| Recurring Revenue Percentage | 90.4% | 88.0% | +2.5% |
| Gross Profit | £41.1m | £40.9m | +0.5% |
| Gross Margin | 61.6% | 59.1% | +2.5% |
| Adjusted EBITDA | £9.1m | £8.9m | +2.7% |
| Adjusted EBITDA Margin | 13.7% | 12.8% | +0.8% |
| Reported Operating Profit | £3.6m | £3.7m | -2.4% |
| Reported Profit Before Tax | £1.9m | £1.6m | +18.7% |
| Group Net Debt | (£68.6m) | (£66.6m) | +2.9% |
| Group Adjusted Net Debt | (£41.8m) | (£39.9m) | +4.6% |
| Adjusted Basic Earnings per Share | 1.86p | 1.70p | +9.3% |
| Reported Basic Earnings per Share | 1.19p | 1.13p | +4.8% |