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AdEPT Tech.Group PLC (ADT)

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Wednesday 07 April, 2021

AdEPT Tech.Group PLC

Trading Update and New Banking Arrangements

RNS Number : 5614U
AdEPT Technology Group PLC
07 April 2021

7 April 2021


("AdEPT" or the "Company" or the "Group")


Trading Update


New Banking Arrangements


AdEPT (AIM: ADT), one of the UK's leading independent providers of managed services for IT, unified communications, connectivity and voice solutions, is pleased to announce a trading update for the financial year ended 31 March 2021 ("FY21"), ahead of the Group's audited results which are expected to be released in July 2021.


* Earnings before interest, tax, depreciation, amortisation and excluding one off acquisition and restructuring costs and share based payments


Trading Update


The Board is pleased to report that, as expected, the Group delivered a resilient performance in Q4, despite the ongoing challenges of the pandemic. Sustained customer demand avoided any need for the Job Retention Scheme ("furlough scheme") in Q4, which had been utilized by the Group in Q1 and Q2. The Group expects to close FY21 in-line with current market forecasts for revenue and EBITDA* set in February 2021, following the reintroduction of its financial guidance.


The Group continued to have strong cash flow generation in Q4 2021 and senior net debt as at 31 March 2021 was in line with market expectations at £26.1m, which includes the repayment of the deferred Q1 VAT liability in early Q4 and the cash costs of the new bank facility arrangement fees.


New banking arrangement


AdEPT's strategy remains to grow both organically and by acquisition, to consolidate a fragmented market and bring enhanced capability to customers, leveraging the Group's banking facilities which are supported by a strong balance sheet and high cash generation.


The Board is, therefore, pleased to report that the Company has signed a new enlarged banking facility agreement with NatWest and Bank of Ireland, to support its growth ambitions with a declared intention to acquire one or two complementary, earnings enhancing, companies each year.


This agreement is for a three-year term, extendable by one year, and provides the Company with up to £70m senior debt, comprising a £35m revolving credit facility, a £15m term loan, and a £20m accordion facility. This new facility replaces the £40m revolving credit facility, which was due to expire in February 2022. 


The new bank facility is on the same commercial terms as the facility it replaces.




The directors have taken a prudent approach to the declaration and payments of dividends throughout the pandemic. As a result and in line with market expectations, the Board confirms that no final dividend will be proposed in FY21. The Board will provide shareholders with an update on the Company's dividend policy in the announcement of its interims results for the six months to 30 September 2021.


Operational resilience


Despite home working, the Group has made considerable progress with Project Fusion, its project to move all Group divisions onto a single set of operational and financial systems. Branded as One AdEPT, it creates a platform for the integration of future acquisitions, as well as enabling greater cross selling opportunities and operational insight. With seven out of eight operational sites now using the centralised systems and platform, the project is more than 80% complete.


AdEPT has strong presence in the Public Sector, and modest exposure to the sectors that have been most impacted by the pandemic (such as travel, high street retail and leisure).  This has shielded the business from the extreme impacts of the lockdown restrictions and enabled a resilient and encouraging performance through this remarkable period.




The pandemic has accelerated tremendous change to the way we work.


In the early lockdowns, organisations sought rapid tactical solutions to fulfil their immediate technology and communication requirements, enabling employees to function effectively in the new working environment. With the chaos of the early lockdowns behind us, these same organisations are now beginning to evaluate strategically the positive and negative impacts of the pandemic.


They are now assessing the long-term requirements of their operations, including; integrated cloud-centric technologies, streamlined contact centres, high-speed resilient networks, and secure ICT platforms, which protect against a myriad of cyber threats.


With its comprehensive portfolio of capabilities and the One AdEPT platform, the Group is very well placed to capitalise on the opportunities presented by this accelerated change.


The marketplace remains fragmented, with sub-scale operators that would benefit from being part of AdEPT, with its scale, breadth of capability, and infrastructure for growth. We have re-instigated our search for complementary, earnings enhancing acquisitions and have identified potential targets that would strengthen our cloud-centric strategic services and our presence in key vertical markets.


With all this in mind, the Board remains confident in the prospects for the Group in the new financial year and beyond.


Ian Fishwick, Chairman of AdEPT, said:


"The major story of the last 12 months has been the dramatic acceleration in home working and the resultant impact on the ability of our customers' workforce to securely access their technology infrastructure remotely. Change brings transformation in thinking and behaviour and, in FY21, AdEPT has proven its ability to deliver transformational solutions and support its customers, enabling them to adapt and perform under exceptional circumstances.


"Given the critical nature of IT and Communications, AdEPT employees were classified as key workers early in the pandemic. This enabled us to continue servicing our customers and rapidly deploying solutions which supported the NHS and thousands of educational establishments, as well as many businesses, delivering important services, in a time of crisis.  The AdEPT team has performed incredibly well in the face of health and logistical challenges, and I am immensely proud of their achievements.


"With over 50% of the UK adult population now vaccinated and the Government implementing its roadmap out of lockdown, we feel more optimistic about the future of the UK economy and what this means for our business. We believe that the pandemic has served to reinforce the importance of our core competences and that there is increasing demand for the solutions we provide.


"The new financial year presents new growth opportunities for the Group, both organic and via acquisition, as we look to capitalise on the opportunities of a growing market, accelerated by the change brought about by the pandemic. With One AdEPT now 80% complete we also have the infrastructure to build further scale."


Phil Race, Chief Executive Officer of AdEPT, added:


"Effective technology and communications have been the saviour of many companies and institutions during the pandemic, enabling us to work from home seamlessly, to educate our children remotely, to be diagnosed by doctors virtually, and to purchase products digitally, all in secure technological environments. These are now viewed as necessities and this creates a very strong opportunity for AdEPT as a provider of unified communications, IT infrastructure and networking.


"Our mission remains 'uniting technology, inspiring people'. We are optimistic for the future of the technology market, and in turn for the prospects of AdEPT." 




AdEPT Technology Group Plc

Ian Fishwick, Chairman

Tel:  07720 555 050

Phil Race, Chief Executive

Tel:  07798 575 338

John Swaite, Finance Director

Tel:  01892 550 243

N+1 Singer (Nominated Adviser & Broker)

Shaun Dobson / Iqra Amin

Tel:  020 7496 3000

Belvedere Communications

Cat Valentine

Tel:  07715 769 078

Keeley Clarke

Tel:  07967 816 525

[email protected]


About AdEPT:


AdEPT is one of the UK's leading independent providers of managed services for IT, unified communications, connectivity and voice solutions.  AdEPT's tailored services are used by thousands of customers across the UK and are brought together through the strategic relationships with tier-1 suppliers such as Openreach, Vodafone, Virgin Media, Avaya, Microsoft, Dell and Apple.


AdEPT is listed on the London Stock Exchange (AIM: ADT). For further information please visit:


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