Final Results
Summary by AI BETAClose X
("iomart" or the "Group" or the "Company")
Final Results
Iomart (AIM: IOM), the secure cloud services company, reports its final results for the year ended 31 March 2026 (FY2026).
Financial Highlights
|
|
FY2026 |
FY2025 |
|
Total Revenue |
£154.9m |
£143.5m |
|
% of recurring revenue¹ |
86% |
89% |
|
Adjusted EBITDA² |
£25.6m |
£34.3m |
|
Adjusted EBIT³ |
£5.2m |
£12.8m |
|
Adjusted (loss)/profit before tax⁴ |
(£4.0m) |
£6.5m |
|
Statutory IFRS Loss before tax |
(£13.6m) |
(£53.2m) |
|
Adjusted diluted earnings per share⁵ |
(1.6p) |
3.4p |
|
Basic earnings per share |
(8.1p) |
(49.0p) |
|
Cash flow from operations |
£21.9m |
£27.2m |
|
Net debt |
£108.6m |
£101.9m |
|
Bank revolver loan less cash |
£88.6m |
£83.9m |
· Results in line with revised market expectations. Second half results stable, aligned with first half.
· Full year contribution from Atech, reflected in overall revenue growth of 8% to £154.9m (2025: £143.5m). On an organic basis, Group revenue declined, primarily driven by customer churn in private cloud managed services alongside the impact of lower opening run-rate.
· Gross order bookings7 of £20.6m ARR (2025: £20.0m excluding Atech contribution), offset by customer churn8 of £21.2m (2025: £19.5m), primarily within Microsoft Modern Work offerings and the last legacy back-up platform customers.
· Adjusted EBITDA decreased to £25.6m (2025: £34.3m), reflecting lower recurring revenues and the shift in revenue mix including lower-margin Microsoft-related services, partially offset by cost savings.
· Group adjusted EBIT reduced to £5.2m (2025: £12.8m), an adjusted EBIT margin of 3.3% (2025: 8.9%), with reduced depreciation of £13.4m (2025: £14.7m) as the capital intensity of our service offering reduces, providing some mitigation.
· Profitability improved in the second half of the year, with adjusted EBIT margin increasing to 3.9% compared with 2.8% in the first half.
· Adjusted loss before tax of £4.0m (2025: £6.5m profit), reflecting the reduction in adjusted EBITDA and increased finance costs of £9.2m (2025: £6.4m) following a full year of Atech acquisition debt.
· Statutory loss before tax of £13.6m (2025: £53.2m loss), with no goodwill impairment in the current year (£52.9m in FY25).
· Good cash generation with an adjusted EBITDA to operating cash flow (before exceptional items) conversion ratio of 96% (2025: 85%).
· Net debt of £108.6m at 31 March 2026 (31 March 2025: £101.9m). Excluding IFRS lease liabilities, £88.6m (2025: £83.9m). Following the year-end, on 5 June 2026, Iomart extended its £115m revolving credit facility to 30 June 2028.
Operational Highlights
· Successful integration of Extrinsica into Atech, consolidating all Microsoft solution delivery into one Microsoft practice under a single management structure.
· Craig MacKay appointed Group Chief Operating Officer in April 2026, with responsibility for both sales and operations across Iomart Cloud Services and Atech.
· Atech secured additional advanced Microsoft specialisations including Copilot, and re-certified Azure Expert MSP status, reinforcing capability to support customers across hybrid and multi-cloud environments.
· India operations expanded, providing 24/7 operational resilience and a platform for future scaling.
· Data Centre Infrastructure operations established as a separate trading entity in Q1 FY27, enhancing operational focus and transparency.
Outlook
· While a modest decline in full year revenue is expected, the Board expects the benefits of cost base actions and an increased focus on higher-value, strategically aligned services to support an improved profit profile during the second half of FY27.
· Broadcom VMware licensing transition to April 2027 is expected to generate significant pipeline opportunity; iomart is well positioned as an accredited Pinnacle Partner with a fully deployed, enterprise-grade VCF private cloud platform.
· The Board is committed to delivering disciplined execution, operational efficiency and improved value for shareholders.
Richard Last, Executive Chair commented,
"FY26 has been a year of transition and repositioning for Iomart. The Group has taken decisive steps to redefine its operating model, enhance business unit accountability and position the business for sustainable long-term growth. I am pleased to report that we delivered on our £4m annualised cost savings target, resulting in a structurally leaner and more focused organisation.
"The financial results reflect the ongoing transition away from legacy technologies, with churn, particularly elevated in the final quarter, weighing on near-term performance. However, we have maintained strong cash generation, refreshed our banking facilities, and entered FY27 with a clearer strategic framework and more defined business unit structure to drive better performance and focus on distinct growth areas.
"Our focus for FY27 is clear, to rebuild growth momentum in higher-value cloud, security and data protection services, continue our cost optimisation programme, and leverage our strong VMware and Microsoft credentials as both markets undergo significant transition."
Statutory Equivalent
A full reconciliation between adjusted and statutory loss before tax is contained within this statement. The current year statutory loss before tax of £13.6m includes amortisation of acquired intangible assets of £7.0m, acquisition costs of £0.5m, non-recurring exceptional administrative expenses of £2.2m (relating to leadership change and cost efficiency programme costs) and a net share-based payment credit of £0.04m. These items have no impact on the Group's underlying cash generation.
Notes
1 Recurring revenue is the revenue that repeats either under long-term contractual arrangement or on a rolling basis by predictable customer habit. % of recurring revenue is defined as Recurring Revenue/ Revenue.
2 Throughout this statement adjusted EBITDA, is earnings before interest, tax, depreciation and amortisation (EBITDA) before share- based payment charges, acquisition costs and exceptional non-recurring costs. Throughout this statement acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
3Throughout this statement adjusted EBIT is earnings before interest and tax (EBIT) before amortisation charges on acquired intangible assets, share-based payment charges, acquisition costs and exceptional non-recurring costs. Throughout these financial statements acquisition costs are defined as acquisition related costs and non-recurring acquisition integration costs.
4 Throughout this statement adjusted (loss)/profit before tax is (loss)/profit before tax, amortisation charges on acquired intangible assets, share based payment charges, acquisition costs and exceptional non-recurring costs.
5Throughout this statement adjusted diluted earnings per share is earnings per share before amortisation charges on acquired intangible assets, share based payment charges, accelerated write off of arrangement fees on bank facilities, acquisition costs, exceptional non-recurring costs and the taxation effect of these.
6Net debt is the total of bank revolver loan, lease liabilities and cash and cash equivalents. Bank revolver loan less cash is Net Debt excluding lease liabilities.
7Gross order bookings represent the annualised value of contracted recurring revenue from new customer wins, renewals and in‑term expansions secured during the financial year. This metric reflects order intake measured as the annual recurring revenue value based on contracted commitments and does not represent recognised revenue, which is recorded over time as services are delivered.
8Customer churn represents the reduction in annualised recurring revenue from existing customers arising from cancellations, non‑renewals and contracted reductions in service scope or pricing. The annualised churn value, as metric, is reported in the period in which the associated decrease in monthly recurring revenue is first reflected in the reported revenue.
For further information:
|
Iomart Group plc Richard Last, Executive Chair Scott Cunningham, Chief Financial Officer |
Tel: 0141 931 6400 |
|
Investec Bank PLC (Nominated Adviser and Broker) Patrick Robb, Virginia Bull |
Tel: 020 7597 4000 |
|
Alma Strategic Communications Caroline Forde, Hilary Buchanan, Louisa El-Ahwal |
Tel: 020 3405 0205 |
About Iomart Group plc
Iomart Group plc (AIM: IOM) is one of the UK's leading providers of secure cloud managed services, simplifying the complexities of modern technology for businesses, with the majority of Group revenue derived from the UK. Our team of 600+ experts deliver cutting-edge solutions in cloud infrastructure, modern workplace management, and managed security services that enable our customers to innovate, protect, and scale their businesses.
We hold one of the UK's most extensive sets of Microsoft credentials, including Azure Expert MSP, Eight Solution Designations, 15 Advanced Specialisations including the new Copilot award and membership in Microsoft's Intelligent Security Association (MISA). As well as being a top-tier Broadcom Pinnacle Partner for VMware Cloud. Which means we can bring the latest technologies in hybrid cloud, data protection, and cyber resiliency to meet the evolving needs of our customers.
For further information about the Group, please visit www.Iomart.com
Strategic Report
Chairman's statement
The year ended 31 March 2026 was one of transition for Iomart. The Group underwent a period of leadership evolution, which is continuing, and took decisive steps to redefine its operating model. These actions have the clear objective of strengthening accountability, enhancing operational focus and positioning the business for sustainable, long-term growth. This work is ongoing and we are confident that we will achieve our goals.
Financial Performance
Overall, the results for the year are in line with the market expectations as revised in February 2026. The Group's FY26 trading performance, as previously communicated, was mixed. Financial performance in the first half of the year was broadly in line with expectations, reflecting early benefits from the changes made to the operating model. However, the anticipated acceleration in profitability in the second half did not materialise, primarily due to softer order pipeline and intake and disappointingly elevated levels of customer churn in the final months of the financial year, resulting in second half financial performance broadly in line with that of the first half.
The Group delivered revenue of £154.9m (2025: £143.5m). Excluding recent acquisitions, the existing businesses experienced a revenue decline of 8% year-on-year primarily driven by customer churn in Iomart private cloud managed services alongside the impact of lower opening run-rate.
The Group secured gross order bookings7 of £20.6m of ARR during the year, compared with £20.0m (excluding Atech contribution) in the prior year. However, this performance was offset by an increase in customer churn8 which in total amounted to £21.2 m in the year (2025: £19.5m). Notably in the final quarter renewal cycle, churn amounted to £8.4m, largely within lower margin Microsoft Modern Work offerings, where competition has intensified, and the last of the Group's legacy high margin back-up platform customers.
This outcome is consistent with the Group's transition away from legacy technologies towards more modern, longer term next-generation platforms and rebuilding growth within higher value cloud and managed service offerings including security and data protection.
The reduction in our legacy and private cloud revenues, and the evolution of the mix of revenue has had a noticeable negative impact on adjusted EBITDA which decreased to £25.6m (2025: £34.3m), flowing through to an adjusted EBIT of £5.2m (2025: £12.8m) and an adjusted loss before tax of £4.0m (2025: £6.5m profit).
Encouragingly, profitability improved in the second half of the year, with adjusted EBIT margin increasing to 3.9% compared with 2.8% in the first half.
The Board set a clear target at the outset of the year to deliver £4m of annualised cost savings, and I am pleased to report that this target has been achieved. This has resulted in a structurally leaner cost base and improved operating leverage, positioning the Group to benefit as revenue growth momentum builds. A second phase of cost optimisation is being undertaken reflecting the evolving revenue portfolio and the revised business unit structure. This will include the expansion of our Indian offshoring operations and the greater use of AI within the business.
Total net debt increased to £108.6m as of 31 March 2026 (31 March 2025: £101.9m), or £88.6m excluding IFRS 16 lease liability (2025: £83.9m). Following the year-end, on 5 June 2026, the Group's £115m revolving credit facility was extended to 30 June 2028 and covenants were amended to reflect current leverage levels and plans.
The Group's cash generation continued to be strong with an adjusted EBITDA to operating cash flow (before exceptional items) conversion ratio of 96% (2025: 85%). This is a strength of the business and is testament to the Group's largely recurring revenue business model. During the current year we invested £14.6m (2025: £13.8m) in fixed assets and intangible long-term license arrangements and spent £2.2m on non-recurring exceptional items (2025: nil).
Strategy
Our vision remains clear and consistent: to establish Iomart as the UK's leading provider of secure hybrid cloud services, trusted by Enterprise mid‑market and SME customers for deep technical expertise, strong security capability and consistently high‑quality managed service.
Over the past year, the Group has taken important steps to sharpen execution of this strategy. A key area of progress has been the introduction of enhanced clarity around business unit ownership and accountability with the decision to formally separate the Group's Data Centre Infrastructure operations from the wider services and solutions business units. A separate trading entity within the Iomart Group has been established during the first quarter of the new financial year. This change will improve operational focus within each business, enhance transparency in performance evaluation and capital allocation.
We benefit from deep expertise across private, public and hybrid cloud infrastructures, strengthened relationships with our three core technology partnerships and a comprehensive suite of managed services. In addition, our ongoing transition towards higher value, strategically aligned platforms further underpins our ability to support customers' increasingly complex digital transformation requirements while driving sustainable growth for the Group.
Our Broadcom Pinnacle Partner status, combined with our early investment in a VMware Cloud Foundation (VCF) platform, positions Iomart strongly to address a significant shift in the infrastructure market.
Board changes
Following the departure of Lucy Dimes, Group CEO, on 29 May 2025, I assumed the role of Executive Chair, supported by a strong executive leadership team and an experienced Board. We have appointed recruitment consultants to progress the search for a new CEO which will commence in earnest once we have completed our strategic reshaping of the business. To add depth to our senior management team, we have appointed Craig MacKay as Group Chief Operating Officer, who joined Iomart in October 2023 and, over the past year, has been serving as Managing Director of the Private Cloud and Datacentre businesses.
In February 2026, it was announced that Scott Cunningham, Chief Financial Officer, will step down from his role to take up a new opportunity outside the IT sector and will leave the business at the end of June 2026. On behalf of the Board and the wider Iomart team, I would like to thank Scott for his significant commitment and contribution over the past seven years and wish him every success in his future role. The process to appoint the successor CFO is progressing positively.
Outlook
The actions undertaken during the year have started the repositioning of Iomart both operationally and strategically. The Group enters the new financial year with a more efficient cost base, with work ongoing in this area, improved cash performance and a clearer framework for accountability and focus on growth.
As outlined earlier, the Group enters FY27 with a lower level of recurring revenue, reflecting elevated churn in the final months of the financial year. As a result, trading performance is expected to be weighted towards the second half, with a softer first half followed by a recovery as the year progresses, based on the Group's growing traction within its target markets, ongoing expansion conversations with existing customers and the full impact of cost saving initiatives undertaken. While this is expected to result in a modest decline in revenue for the full year, the Board expects the benefits of the actions taken on the cost base, together with an increased focus on higher value and strategically aligned services, will support an improved profit profile during the second half of the year, notwithstanding the ongoing macroeconomic backdrop.
Richard Last
Executive Chair
Operational Report
While not fully reflected in the financial results, FY26 has been a significant period of operational change and repositioning for the Group. During the year, we enhanced clarity around business unit ownership and accountability, including the decision to formally separate the Group's Data Centre Infrastructure operations from the wider services and solutions businesses.
Compared to twelve months ago, the Group enters the new financial year with a clearer organisational structure, more defined objectives and strengthened leadership. In April 2026, we appointed Craig MacKay as Group Chief Operating Officer, with responsibility for both sales and operations across Iomart Cloud Services and Atech. The Easyspace business will continue to operate independently, with its Managing Director reporting directly to the Board.
A positive feature of the year has been the stability of the well-established Easyspace and RapidSwitch brands (being the main brand within Iomart's Self-Managed Infrastructure) which performed in line with their respective plans. The restoration of operational stability in these businesses provides an important foundation for the Group's broader organic growth ambitions.
We have continued to invest in our core platforms and technology partnerships. Our investment in Broadcom's VMware Cloud Foundation, together with Pinnacle Partner status, positions Iomart strongly in a changing private cloud market. At the same time, the successful re-certification of Microsoft Expert Azure MSP status reinforces our capability to support customers across hybrid and multi-cloud environments.
Sales Momentum
The year represented a pivotal stage in the evolution of the Group's go-to-market model. Following the acquisition of Atech on 1 October 2024, we successfully integrated our marketing, sales, sales operations and pre-sales functions into a single, scaled organisation under the leadership of our Chief Revenue Officer. This unified structure supports the full breadth of our customer base and service portfolio, whilst retaining specialist expertise aligned to our core service practices.
Order bookings for recurring revenue across the Group totalled £20.6m in ARR (2025: £20.0m, excluding Atech). Over half of bookings this year were generated from Microsoft solution areas, reflecting the enhanced capability, credibility and customer demand associated with the Atech platform. Performance within our heritage private cloud and data protection portfolio was softer, influenced in part by customer caution arising from disruption in the VMware market following Broadcom's strategic repositioning. Encouragingly, pipeline activity in this area has strengthened in recent months ahead of the April 2027 market-wide deadline imposed for licensing transition, and we expect this to support improved momentum through FY27.
Order bookings performance was broadly offset by higher-than-expected customer revenue churn of £21.2m (2025: £19.5m). This reflects ongoing competitive pressure within Microsoft Modern Work licensing, where larger providers continued to exert pricing pressure, together with the loss of the last significant customer on the Group's legacy back-up platform. While this has affected near-term performance, it is consistent with the Group's transition away from legacy technologies and lower-value services. The focus remains on supporting customers' migration onto more modern platforms and rebuilding growth within higher-value cloud, security and data protection offerings.
Strategy
Our vision remains clear and consistent: to establish Iomart as the UK's leading provider of secure hybrid cloud services, trusted by Enterprise mid‑market and SME customers for deep technical expertise, strong security capability and consistently high‑quality managed services.
During FY26, we strengthened our operational focus by organising the Group around three clearly defined core business units, each led by dedicated leadership teams. This structure is supported by a group‑wide sales and marketing function serving both new and existing customers, alongside centralised finance, procurement, compliance and HR functions, ensuring strong governance, efficiency and consistency across the Group. After the year end, the Group further enhanced its operational leadership with the appointment of a Group Chief Operating Officer, providing additional focus and support in the execution of the Group's strategic objectives.
The markets in which we operate continue to demonstrate strong underlying demand for managed services, cloud, security, AI and data‑led solutions, although competition and pricing pressure remain intense. In response, we are sharpening our focus on those segments and solutions where Iomart has clear competitive differentiation, namely our secure hybrid cloud infrastructure, long‑standing customer relationships, and our growing Microsoft and cybersecurity capabilities, which we believe present the strongest long‑term demand and growth opportunities.
Enhancing our Microsoft and cybersecurity capabilities remains a key strategic priority, reflecting strong market demand and significant growth opportunity. At the same time, we are actively rationalising our legacy product portfolio, managing the associated cost base down in line with declining revenues in those areas, and redeploying resource towards higher-growth, higher-margin solutions. Given current balance sheet leverage, our near-term priority is disciplined operational execution and organic growth. We will continue to monitor the acquisition landscape selectively, but capital allocation in the short term is focused on strengthening the core business and reducing leverage.
To achieve this, our growth strategy is built on three core pillars:
· Protect and Expand Our Core
Our existing customer base represents our most valuable asset. We are focused on deepening those relationships by expanding the managed services and solutions we deliver, improving service quality and retention, and ensuring our hybrid cloud infrastructure continues to meet evolving customer requirements. With long average customer tenures and strong embedded relationships, our priority is to grow revenue per customer and reduce churn through proactive account management and a broadening solutions footprint.
· Broaden Our Solutions Portfolio.
We are building differentiated capability in the two areas where customer demand is strongest and where Iomart has a clear right to win: Microsoft solutions and cybersecurity. Our Microsoft practice spans Azure management, Modern Work solutions and AI products enabling customers to maximise their Microsoft investment within a managed, secure environment. Our cybersecurity offering addresses the growing compliance and threat landscape facing SME and mid-market organisations, which are increasingly targeted but often lack in-house expertise. Together, these capabilities position Iomart as a trusted, end-to-end partner for secure hybrid cloud not simply an infrastructure provider.
Iomart has a well-established heritage in private cloud infrastructure solutions, underpinned by deep expertise in VMware-based virtualisation platforms and deployment. This capability has become increasingly relevant within our broader solutions portfolio, as recent changes to Broadcom's licensing and partner models drive disruption across the sector.
· Balance sheet strengthening
The revision to our business model, with clearer business unit segregation, will over time provide greater strategic optionality for the Group. This will support the acceleration of organic initiatives and enhance our ability to deleverage where appropriate.
Enhanced Portfolio & Technology Partnerships
Over the past 12 months, Atech has secured additional advanced Microsoft specialisations, including Copilot, positioning Iomart among a select group of UK partners. This strengthens our ability to support customers as they adopt new technologies and maximise value from their Microsoft environments.
The last year has seen a period of significant disruption within private cloud infrastructure. Broadcom, with VMware software, are the world's largest technology provider to private cloud virtualisation which underpins private clouds. They have driven hard their strategic focus on standardisation, enterprise-grade private cloud and deeper platform integration. This comes with a significant consolidation of partners. Our Broadcom Pinnacle Partner status, combined with our early investment in a VMware Cloud Foundation (VCF) platform, positions Iomart strongly to address this significant shift in the infrastructure market.
Collectively, these capabilities enable Iomart to support customers across the full spectrum of cloud services, public, private and hybrid, complemented by modern workplace, data protection and cyber security solutions and AI. This breadth of capability underpins our position as a leading UK secure cloud provider.
Operational Excellence & People
During the year, we continued to invest in improving the efficiency and scalability of our operations. This includes ongoing work in systems integration, automation and process standardisation to support a more modern and responsive service organisation.
With the acquisition of Atech we gained a significant asset in the form of an established, highly skilled and motivated team in India. In the last 12 months we have continued to expand the investment in India moving the headcount from 50 in October 2024, when we acquired Atech, to 89 at 31 March 2026. We are also investing in a new expanded office in India. This provides both 24/7 operational resilience and a platform for future scaling.
As previously outlined, we have implemented a series of strategic measures aimed at enhancing operational efficiency and reducing our ongoing cost base. These include workforce optimisation, data centre & network efficiency measures and improvements across the supply chain. Collectively, these initiatives have achieved the £4m established at the outset of the year.
Commitment to ESG and sustainability
The Group remains committed to embedding environmental, social and governance ("ESG") considerations across its operations, recognising their importance in driving long-term value for customers, employees, shareholders and wider stakeholders.
Our people are central to Iomart's long-term success, and we continue to invest in developing the skills needed to support our evolving business. During the year, we delivered a comprehensive programme of training through our learning management system, supporting both technical capability and professional development across the Group. We also strengthened communication and engagement through our company-wide intranet, "The Hive". This continues to improve the flow of information, supporting greater collaboration across teams, and providing a platform for both formal updates and more informal employee engagement. Together, these initiatives support the development of a skilled, engaged workforce, which remains critical to delivering high-quality customer outcomes and sustainable growth.
We are aligned with UK Government net zero ambitions and have committed to achieving Net Zero by 2050, or earlier where feasible. Since 2021, we have procured Renewable Energy Guarantees of Origin ("REGO") certified electricity across our UK data centre estate, significantly reducing our carbon footprint. During the year, we progressed further efficiency initiatives, including the completion of works on the cooling infrastructure at our Gosport data centre and commencement in the final 2 months of a similar replacement programme at our Glasgow data centre. At both sites these investments are expected to reduce energy consumption for cooling by at least 30%. The Glasgow data centre investment was supported by an environmental grant of £0.3m from the Scottish Government.
Our social agenda has been purpose-led, focussed on how we're giving back to local communities. We established our first-ever charity partnership with Fareshare, the UK's biggest charity fighting hunger and food waste, and we expanded the days allocated to volunteering to local charities which our regional offices have supported. Alongside this we've continued initiatives to broaden access to careers in technology and improve diversity within our workforce.
The Company continues to adopt the Quoted Companies Alliance (QCA) Corporate Governance Code and has aligned with the updated Code.
Our operational focus for FY27
The Group's operational priorities for FY27 remain consistent with those set out in the prior year and are centred on driving sustainable, higher-quality growth.
Product Portfolio
We continue to invest in advancing our professional and managed services to drive accelerated growth across our hybrid cloud, modern workplace, data protection, cyber security practices and AI. These collectively form our "Secure Cloud" managed services offering, delivered through Atech, Oriium and Iomart brands. A key area of focus will be strengthening our sales and consultancy capabilities in these higher-value service areas, supported by our strategic technology partnerships and accreditations with Microsoft, Commvault and Broadcom VMware.
Within our data centre operations, we have introduced a more structured and focused approach to our colocation offering, including expansion into High Performance Computing ("HPC") hosting. Early progress has been supported by targeted marketing activity, resulting in initial customer wins and an improved pipeline entering the new financial year.
Similarly, renewed investment in the RapidSwitch self-managed infrastructure ("bare metal") offering has led to a sharper focus on core products, supported by a new dedicated customer success and commercial team. A refreshed product set and updated website have been launched in the first quarter of FY27 to support future growth.
Operational Scalability
We will continue to enhance efficiency and scalability across the Group through greater integration of our operations and increased use of automation. This includes the ongoing standardisation of core systems, with the rollout of unified CRM, quoting, IT service management and billing platforms across the organisation.
In parallel, a cross-functional programme is underway to deploy AI-driven tools to improve responsiveness, enhance service delivery and support scalable growth.
Customer Retention & Growth
A Group-wide Service Delivery Excellence programme has been established under a single leadership structure to drive greater consistency and improved customer outcomes across the Iomart and Atech business units.
Working closely with account management teams, this programme is focused on increasing customer engagement, providing more proactive and value-led advisory services, and strengthening long-term relationships. It will also support the ongoing development of our service portfolio in response to evolving customer needs.
Financial review
The Group's financial performance for the year reflects a period of transition, as the business continues to reposition its operating model and revenue mix in response to changing market dynamics.
While reported revenue increased following a full year contribution from Atech, underlying performance was impacted by a lower opening recurring revenue position within Iomart Cloud Services and elevated customer churn during the second half. This, combined with softer order intake, weighed on short-term momentum.
Performance across the year was broadly stable between the first and second half, with revenue and adjusted EBITDA at similar levels in each period. While this stability is reassuring, the outcome is nonetheless disappointing as it did not deliver the improvement in performance that had been anticipated in the second half of the year.
Profitability reduced year-on-year, reflecting lower revenues across the legacy private cloud portfolio, reduced utilisation of our infrastructure, and the continued shift towards Microsoft-related services which, while strategically important, carry a lower margin profile as they scale.
Against this backdrop, the Group has maintained strong financial discipline. Targeted cost actions undertaken during the year have delivered a structurally leaner cost base, with further initiatives underway to better align operating costs with the evolving business mix and to enhance scalability through increased use of automation and offshore delivery capability.
These actions are expected to support a recovery in margins and a return to profit growth as revenue stabilises.
Financial highlights
We use a range of alternative performance measures to track how we are executing against our strategy.
|
Metric |
FY2026 |
FY2025 |
|
Recurring revenue % |
86% |
89% |
|
Adjusted EBITDA |
£25.6m |
£34.3m |
|
Gross profit Margin |
44.2% |
49.1% |
|
Adjusted EBIT margin % |
3.3% |
8.9% |
|
Adjusted EBIT |
£5.2m |
£12.8m |
|
Adjusted EBITDA margin % |
16.5% |
23.9% |
|
Loss before tax margin % |
(8.8)% |
(37)% |
|
Adjusted loss before tax margin % |
(2.6)% |
4.5% |
|
Adjusted loss before tax |
£(4.0)m |
£6.5m |
|
Net debt Ratio |
4.2x |
2.7x |
|
Cash flow from operations |
£21.9m |
£27.2m |
|
Adjusted diluted earnings per share |
(1.6)p |
3.4p |
Revenue
|
|
2026 |
Reclassified 2025 |
|
|
£'000 |
£'000 |
|
Iomart Cloud Services |
89,552 |
97,059 |
|
Atech |
50,123 |
30,188 |
|
Domain & Mass Hosting (Easyspace) |
15,210 |
16,213 |
|
Total revenue |
154,885 |
143,460 |
see Note 1 for reclassification of historic periods.
Overall Group revenue increased to £154.9m (2025: £143.5m), reflecting the inclusion of a full year of Atech revenue compared to six months in the prior year. The Group continues to benefit from a highly recurring revenue model, with 86% of revenues recurring in nature (2025: 89%), underpinned by multi-year customer contracts and recurring billing structures, providing good forward revenue visibility.
On an organic basis, adjusting for the annualised impact of the Atech acquisition, Group revenue declined by approximately £9.7m (8%). This reduction was driven primarily by lower recurring revenues within Iomart Cloud Services.
Adjusted EBITDA
|
|
2026 |
Reclassified 2025 |
|
|
£'000 |
£'000 |
|
Iomart Cloud Services |
17,086 |
27,460 |
|
Atech |
5,077 |
3,067 |
|
Domain & Mass Hosting (Easyspace) |
7,620 |
8,562 |
|
Group overheads |
(4,222) |
(4,777) |
|
Total adjusted EBITDA |
25,561 |
34,312 |
see Note 1 for reclassification of historic periods.
Adjusted EBITDA decreased to £25.6m (2025: £34.3m), reflecting the combined impact of lower recurring revenues within the Group's traditional private cloud and data centre services, together with reduced utilisation across a largely fixed infrastructure cost base. In addition, the evolving revenue mix, particularly the increased weighting towards Microsoft-related services has, in the short term, resulted in a lower overall margin profile.
The Group continues to take proactive steps to realign its cost base with this changing revenue mix. During the year, cost efficiency initiatives delivered £4m of annualised savings, primarily through optimisation of people-related costs, the Group's largest cost category.
A further phase of cost optimisation is now underway, aligned to the evolving business portfolio and operating structure. This includes the continued expansion of offshore delivery capabilities in India and increased use of automation and AI to improve efficiency and service scalability. These actions are intended to stabilise margin performance in the near term, while positioning the Group to benefit from improved operating leverage as revenue growth recovers.
Financial review by segment
Iomart Cloud Services
Iomart Cloud Services revenue was £89.6m, a decrease of £7.5m compared with the prior year. This reduction primarily reflects lower revenues across both cloud managed services (down 8%) and self-managed infrastructure (down 18%).
The principal driver of the year-on-year reduction was a lower recurring revenue run-rate at the start of the year, along with a softer than expected order bookings level. While self-managed infrastructure has been in structural decline for several years, the rate of reduction moderated during the year, with a stabilisation in performance in the second half as we increased focus on the RapidSwitch brand and core product set.
Non-recurring revenue activity strengthened during the second half, resulting in year-on-year growth of £1.2m and contributing to a modest increase in second half revenue of £0.5m compared with the first half.
The following table shows the disaggregation of Iomart Cloud Services revenue.
|
|
2026 |
Reclassified 2025 |
|
Iomart Cloud Services |
£'000 |
£'000 |
|
Cloud managed services |
65,976 |
71,869 |
|
Self-managed infrastructure (SMI) |
12,415 |
15,241 |
|
Non-recurring |
11,161 |
9,949 |
|
Total revenue |
89,552 |
97,059 |
see note 1 for reclassification of historic periods.
Iomart Cloud Services continues to utilise a shared data centre and fibre network infrastructure. As noted previously, the Group is progressing plans to more formally separate data centre infrastructure operations from the broader services and solutions activities.
Cloud managed services (recurring revenue)
Cloud managed services comprise fully managed, bespoke and resilient solutions delivered across private, public and hybrid cloud environments. Reported revenues include approximately £38.5m of Microsoft-related revenues which are now operationally delivered within Atech; these will be formally reassigned between business units during FY27, depending on customer structures.
Revenues in this area reduced by 8% to £66.0m (2025 reclassified: £71.9m). The underlying reduction from the prior period is a feature of a lower starting monthly recurring value due to churn weighted towards the final months of the FY26.
Self-managed infrastructure (recurring revenue)
Self-managed infrastructure services customers who prefer to procure and manage compute and connectivity directly. This remains a lower-growth segment of the market and is more exposed to migration towards public cloud.
Revenue reduced to £12.4m (a decrease of £2.8m year-on-year). However, performance stabilised in the second half, with broadly consistent revenues of £6.2m in both H1 and H2. This represents a positive development following a prolonged period of decline.
Non-recurring revenue
Non-recurring revenue increased to £11.2m (2025: £10.0m), driven by higher activity levels in the second half of the year.
This revenue, predominantly hardware and software reselling, typically carries lower margins and therefore has a more limited impact on EBITDA. However, it continues to serve an important strategic role as an entry point for new customer relationships and a pathway to higher-value recurring services.
Iomart Cloud Services segmental EBITDA (before share-based payments, acquisition costs and central overheads) was £17.1m, a decrease of £10.4m. This reflects both the reduction in recurring revenues and the impact of lower utilisation across a largely fixed-cost infrastructure base. Revenue mix remains a feature in the period, with lower margin revenue associated with complex managed cloud services (including greater use of Azure public cloud) increasing, while higher margin self-managed infrastructure revenue decreases alongside lower utilisation of our fixed cost infrastructure. The cost efficiencies already undertaken and our rolling efficiency programme is focussed on this area of the business.
Atech
Atech delivered revenue of £50.1m for the year. During the period, the Group completed the integration of Extrinsica into Atech, consolidating all Microsoft solution delivery under a single management structure. Extrinsica contributed £8.7m of revenue in the prior year. Some customer attrition was experienced prior to the transfer including a large contract that was not renewed due to credit risk considerations (£0.6m annual value).
Atech has a higher proportion of non-recurring revenue relative to the Group, reflecting a mix of consultancy activity alongside hardware and software reselling, primarily to existing customers. During FY26, reselling activity was lower, representing an approximate £0.8m reduction in annualised revenue, which moderated overall growth in the period alongside softer than expected recurring sales momentum.
Atech's segmental EBITDA (before share-based payments, acquisition costs and central overheads) was £5.1m, representing a margin of 10%, consistent with the prior year (2025: £3.1m, 10%). While cost optimisation efforts in the year were primarily focused on Iomart Cloud Services, the Group sees significant potential to enhance scalability within Atech through increased use of automation and AI over the next 12 months.
The table below shows Atech's revenue split between recurring and non-recurring activities:
|
Atech |
2026 |
Reclassified 2025 |
|
£'000 |
£'000 |
|
|
Recurring |
39,045 |
23,739 |
|
Non-recurring |
11,078 |
6,449 |
|
Total revenue |
50,123 |
30,188 |
see Note 1 for reclassification of historic periods.
Atech (recurring revenue)
Recurring revenue within Atech continued to grow, although performance weakened in the second half due to customer reductions, including M365 renewals and the previously noted non-renewal of a significant Extrinsica contract. Total recurring revenue for the year was £39.0m.
Over half of the Group's total order bookings were generated from Microsoft solution areas, consistent with expectations at the start of the year. The phasing of these wins impacts revenue recognition, while the impact of customer losses, principally in lower-margin activities, had a more immediate effect on reported revenue growth.
The Group continues to take a disciplined approach to contract renewals, particularly in M365 licensing, where pricing pressure has reduced margins to levels that in some situations no longer meet return thresholds. Focus has therefore shifted towards higher-value, differentiated services, including expansion of Security Operations Centre (SOC) capabilities.
Atech (non-recurring revenue)
Non-recurring revenue represented 22% of total Atech revenue and totalled £11.1m (2025: £6.4m). This includes consultancy services, as well as hardware and software reselling activity. The reduction in reselling activity mainly during the first half of the year resulted in an approximate £2m reduction in annualised revenue compared with the prior period.
The largest component of non-recurring activity relates to cyber security consultancy, including a significant engagement with a long-standing financial services customer, which contributed £5.5m of revenue during the year. This engagement has generated repeat business over multiple years, and we expect continued engagement, albeit at a potentially lower level over time.
Domain & Mass Hosting (Easyspace)
The Domain & Mass Hosting segment, which now includes the Sonassi brand alongside Easyspace and Hosting UK, recorded revenue of £15.2m for the year, compared to £16.2m in the prior year (as reclassified), representing a modest decline of 6%. As noted at the half year, this reduction was primarily driven by increased churn within the Sonassi brand, while Easyspace and Hosting UK delivered relatively stable performance.
Segmental EBITDA (before share-based payments, acquisition costs and central overheads) was £7.6m, equivalent to 50.1% of revenue (2025: £8.6m, 52.8%). The inclusion of Sonassi and certain higher-value customer cohorts continues to support a strong margin profile for the segment, notwithstanding the impact of revenue decline during the period.
The global domain name and mass-market hosting sector continues to demonstrate underlying growth. While the market remains highly competitive and concentrated among a small number of large global providers, the Group remains focused on reinvigorating this segment. Our objective is to stabilise performance and return the business to modest growth over time, supported by strong renewal rates across all three brands. Targeted investment is being directed towards Sonassi to improve customer retention and enhance the overall customer experience, with early actions already underway.
Group overheads
Group overheads, which are not allocated to segments, include the cost of the Board, certain professional fees, all the running costs of the headquarters in Glasgow, and Group led functions such as human resources, marketing, finance and development teams. Group overheads saw a decrease of £0.6m to £4.2m (2025: £4.8m) with no material individual variances on the prior year.
Adjusted EBIT
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Adjusted EBITDA |
25,561 |
34,312 |
|
Depreciation |
(13,409) |
(14,730) |
|
Amortisation (non M&A) |
(6,986) |
(6,757) |
|
Adjusted EBIT |
5,166 |
12,825 |
The Group's depreciation charge reduced by £1.3m to £13.4m (2025: £14.7m). As a proportion of recurring revenue, depreciation decreased to 10.1% (2025: 11.5%), continuing a multi-year trend of declining capital intensity as the Group evolves its service mix.
Amortisation of non-acquired intangible assets remained broadly stable at £7.0m (2025: £6.8m). This charge continues to be largely driven by amortisation relating to Broadcom VMware software licence arrangements (£3.7m in the current year; 2025: £3.2m), reflecting the predominantly fixed-cost nature of this expense.
Adjusted EBIT decreased by £7.7m to £5.2m (2025: £12.8m), equating to an adjusted EBIT margin of 3.3% (2025: 8.9%). This reduction reflects the lower EBITDA performance outlined above, together with the relatively more fixed nature of depreciation and amortisation charges.
Encouragingly, profitability improved in the second half of the year, with adjusted EBIT margin increasing to 3.9% compared with 2.8% in the first half. The Group remains focused on improving margins through ongoing cost efficiency programmes and by increasing the proportion of higher value-added services within the revenue mix as growth recovers.
Adjusted (loss)/profit before tax
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Adjusted EBIT |
5,166 |
12,825 |
|
Net bank & other interest |
(7,752) |
(5,442) |
|
Finance lease interest |
(1,429) |
(928) |
|
Adjusted (loss)/profit before tax |
(4,015) |
6,455 |
Total finance costs increased by £2.8m to £9.2m (2025: £6.4m). This reflects the additional funding associated with the Atech acquisition completed on 1 October 2024, as well as increased interest arising from lease liabilities recognised under IFRS 16.
After depreciation, amortisation (excluding amortisation of acquired intangible assets) and finance costs, the Group reported an adjusted loss before tax of £4.0m, compared with an adjusted profit of £6.5m in the prior year. This movement is primarily driven by the reduction in EBITDA and the increase in finance costs during the year. As noted earlier, there has been cost savings secured and these cost optimisations initiatives continue, all designed to support a recovery in margins and a return to profit growth as revenue stabilises.
Statutory IFRS loss before tax
The measure of adjusted loss before tax is a non-statutory measure, which is commonly used to analyse the performance of companies where M&A activity forms a significant part of their activities.
A reconciliation of adjusted loss before tax to Statutory IFRS profit before tax is shown below:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Total adjusted loss before tax |
(4,015) |
6,455 |
|
Amortisation of acquired intangible assets |
(6,950) |
(4,902) |
|
Acquisition costs |
(480) |
(1,674) |
|
Share based payments |
(36) |
(198) |
|
Administrative expenses-exceptional non-recurring costs |
(2,229) |
- |
|
Goodwill impairment |
- |
(52,900) |
|
IFRS loss before tax |
(13,638) |
(53,219) |
The larger adjusting items in the current year are:
· non-cash charges for the amortisation of acquired intangible assets of £7.0m (2025: £4.9m); and
· £2.2m of exceptional administrative expenses relating to costs related to the cost efficiency, integration and change of Chief Executive Officer.
After deducting the charges for share based payments, the amortisation of acquired intangible assets, acquisition costs and exceptional non-recurring costs, the reported loss before tax is £13.6m (2025: £53.2m loss).
Taxation
There is a tax credit in the year of £4.5m (2025: £1.9m charge), represented by a combination of a credit for deferred taxation in the year of £3.9m (2025: £1.3m charge) and a corporation tax credit in the year of £0.5m (2025: £0.6m charge). The adjusted effective tax rate, after adjusting for share based payments and acquisition costs, is 32.8% (2025: 0.04%).
Loss for the year
After deducting the tax charge from the loss before taxation, the Group has recorded a loss for the year from total operations of £9.2m (2025: £55.1m loss).
Earnings per share
Adjusted diluted earnings per share, which is based on loss for the year attributed to ordinary shareholders before share based payment charges, amortisation of acquired intangible assets, acquisition costs, non-recurring exceptional administrative expenses and the tax effect of these items, was 1.6p loss per share (2025: 3.4p profit per share).
The measure of adjusted diluted earnings per share as described above is a non-statutory measure that is commonly used to analyse the performance of companies where M&A activity forms a significant part of their activities. Basic earnings per share from continuing operations was 8.1p loss per share (2025: 49.0p loss per share). The calculation of both adjusted diluted earnings per share and basic earnings per share is included at note 5.
Cash flow
The Group generated cash from operations (before exceptional items) of £24.1m in the year (2025: £29.3m), representing an adjusted EBITDA to cash conversion ratio of 96% (2025: 85%). This level of conversion is consistent with the Group's long-term average and remains a strength of the business model. Cash payments for corporation tax were £0.3m (2025: £1.9m), and cash outflows relating to exceptional items were £2.2m (2025: £2.1m), resulting in net cash inflow from operating activities of £21.6m (2025: £25.3m).
Net cash outflow from investing activities was £9.8m (2025: £62.2m). The prior year included £51.0 m of acquisition related expenditure, which did not recur in the current year. On a like-for-like basis, underlying investment decreased to £9.4m compared with £11.2m in the prior year. Investment in the current year was primarily in property, plant and equipment to support customer service delivery, together with targeted investment across the Group's data centre estate. This included the replacement of the cooling system at the Glasgow data centre, which attracted an environmental grant of £0.3m from the Scottish Government's Scottish Industrial Energy Transformation Fund.
Cash flows from financing activities were less significant than in the prior year, reflecting the absence of acquisition related funding. In prior year, the cash flow from financing activities was heavily impacted by the Atech acquisition funding items including a £57.0m bank loan drawdown and a £6.2m repayment of debt acquired on acquisition. In the current year there was only £0.5m bank loan drawn to fund the refinancing costs of £0.4m and a final £0.4m of repayment on debt acquired on acquisition. Net cash used in financing activities, excluding any acquisition related items or bank loan related items was £16.1m (2025: £16.6m). All shares issued in the current year under share options were issued at nominal value. In the current year we repaid £4.2m of lease liabilities (2025: £4.4m) and paid £6.7m (2025: £4.8m) of finance charges. A total of £5.2m (2025: £2.6m) was paid in relation to software license arrangements, principally annual instalments on the Broadcom VMware partnership commitments during the year. No dividend payment was made in the year (2025: £4.8m).
Net Debt
The analysis of the net debt is shown below:
|
|
2026 |
2025 |
|
£'000 |
£'000 |
|
|
Bank revolver loan |
97,500 |
97,000 |
|
Less: cash and cash equivalents |
(8,921) |
(13,088) |
|
Bank revolver loan less cash and cash equivalents |
88,579 |
83,912 |
|
Lease liabilities |
20,042 |
18,006 |
|
Net Debt |
108,621 |
101,918 |
Total net debt was £108.6m as of 31 March 2026 (2025: £101.9m) which includes £20.0m of IFRS 16 lease liability (2025: £18.0m). Excluding IFRS 16 lease liability, net debt levels are £88.6m (2025: £83.9m), representing an increase of £4.7m in the year. The net debt position represents a multiple of 4.2 times our adjusted EBITDA (2025: 2.7 times) or 2.3 times, excluding IFRS 16 lease liabilities.
The Board recognises that, notwithstanding the Group's recurring revenue model and strong operating cash flow conversion, these leverage levels are elevated relative to typical listed company benchmarks. Accordingly, the Group remains focused on a programme of deleveraging, underpinned by disciplined cash management and ongoing operational improvements. In addition, the Board continues to evaluate a range of strategic and operational options to support balance sheet optimisation over time.
Following the year-end, on 5 June 2026, Iomart extended its £115m revolving credit facility to 30 June 2028 and ensured covenants were amended to reflect current leverage levels and plans. At current leverage levels, the bank margin under the RCF is 3.5% (2025: 3.0%) above SONIA, with a margin ratchet mechanism that reduces interest costs as the Group deleverages.
Consolidated Statement of Comprehensive Income
|
For the year ended 31 March |
|
2026 £'000 |
2025 |
|
Revenue |
|
154,885 |
143,460 |
|
Cost of sales |
|
(86,355) |
(72,997) |
|
Gross profit |
|
68,530 |
70,463 |
|
Administrative & other expenses |
|
(72,987) |
(117,312) |
|
Operating loss |
|
(4,457) |
(46,849) |
|
|
|
|
|
|
Analysed as: |
|
|
|
|
Adjusted EBITDA |
|
25,561 |
34,312 |
|
Share-based payments |
|
36 |
(198) |
|
Acquisition costs |
|
(480) |
(1,674) |
|
Non-Recurring administrative expenses |
|
(2,229) |
- |
|
Depreciation |
|
(13,409) |
(14,730) |
|
Amortisation-acquired intangible assets |
|
(6,950) |
(4,902) |
|
Amortisation-other intangible assets |
|
(6,986) |
(6,757) |
|
Goodwill impairment charge |
|
- |
(52,900) |
|
|
|
|
|
|
Net Finance costs |
|
(9,181) |
(6,370) |
|
Loss before taxation |
|
(13,638) |
(53,219) |
|
Taxation credit/(charge) |
|
4,470 |
(1,898) |
|
Loss for the year from continuing operations |
|
(9,168) |
(55,117) |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Exchange differences on translating foreign operations |
|
(24) |
(31) |
|
Fair value gains on cashflow hedges |
|
(101) |
(84) |
|
Other comprehensive expense for the year |
|
(125) |
(115) |
|
|
|
|
|
|
Total comprehensive loss for the year attributable to equity holders of the parent |
|
(9,293) |
(55,232) |
|
Basic and diluted earnings per share |
|
|
|
|
Basic loss per share (p) |
|
(8.1)p |
(49.0)p |
|
Diluted loss per share (p) |
|
(8.1)p |
(49.0)p |
All of the activities of the Group are classed as continuing.
Consolidated Statement of Financial Position
|
|
|
2026 |
2025 |
|
As at 31 March |
|
£'000 |
£'000 |
|
ASSETS |
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill and intangible assets |
|
132,232 |
144,305 |
|
Trade and other receivables |
|
111 |
111 |
|
Property, plant and equipment |
|
58,243 |
59,515 |
|
|
|
190,586 |
203,931 |
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
8,921 |
13,088 |
|
Trade and other receivables |
|
38,730 |
36,833 |
|
Current tax asset |
|
2,150 |
842 |
|
|
|
49,801 |
50,763 |
|
Total assets |
|
240,387 |
254,694 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Non-current liabilities |
|
|
|
|
Trade and other payables |
|
(10,220) |
(15,210) |
|
Lease liabilities |
|
(16,182) |
(15,132) |
|
Non-current borrowings |
|
(97,500) |
(97,000) |
|
Provisions |
|
(2,219) |
(2,486) |
|
Deferred tax liability |
|
(6,146) |
(10,084) |
|
|
|
(132,267) |
(139,912) |
|
Current liabilities |
|
|
|
|
Contingent consideration |
|
- |
(364) |
|
Trade and other payables |
|
(50,048) |
(48,012) |
|
Lease liabilities |
|
(3,860) |
(2,874) |
|
|
|
(53,908) |
(51,250) |
|
Total liabilities |
|
(186,175) |
(191,162) |
|
Net assets |
|
54,212 |
63,532 |
|
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
|
1,137 |
1,128 |
|
Own shares |
|
(70) |
(70) |
|
Capital redemption reserve |
|
1,200 |
1,200 |
|
Share premium |
|
22,500 |
22,500 |
|
Other reserves |
|
6,729 |
6,900 |
|
Retained earnings |
|
22,716 |
31,874 |
|
Total equity |
|
54,212 |
63,532 |
Consolidated Statement of Changes in Equity
|
|
Share capital |
Own shares EBT |
Capital redemption reserve |
Share premium account |
Other Reserves1 |
Retained earnings |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 April 2025 |
1,128 |
(70) |
1,200 |
22,500 |
6,900 |
31,874 |
63,532 |
|
Loss for the period |
- |
- |
- |
- |
- |
(9,168) |
(9,168) |
|
Exchange differences |
- |
- |
- |
- |
(24) |
- |
(24) |
|
Fair value (gains)/losses on cashflow hedges |
- |
- |
- |
- |
(101) |
- |
(101) |
|
Total comprehensive income |
- |
- |
- |
- |
(125) |
(9,168) |
(9,293) |
|
Share based payments |
- |
- |
- |
- |
(36) |
- |
(36) |
|
Exercised employee share based payments |
- |
- |
- |
- |
(10) |
10 |
- |
|
Issue of share capital |
9 |
- |
- |
- |
- |
- |
9 |
|
Total transactions with owners |
9 |
- |
- |
- |
(46) |
10 |
(27) |
|
|
|
|
|
|
|
|
|
|
Balance at 31 March 2026 |
1,137 |
(70) |
1,200 |
22,500 |
6,729 |
22,716 |
54,212 |
.
|
|
Share capital |
Own shares EBT |
Capital redemption reserve |
Share premium account |
Other Reserves1 |
Retained earnings |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 April 2024 |
1,124 |
(70) |
1,200 |
22,500 |
6,821 |
91,822 |
123,397 |
|
Loss for the period |
- |
- |
- |
- |
- |
(55,117) |
(55,117) |
|
Exchange differences |
- |
- |
- |
- |
(31) |
- |
(31) |
|
Fair value (gains)/losses on cashflow hedges |
- |
- |
- |
- |
(84) |
- |
(84) |
|
Total comprehensive income |
- |
- |
- |
- |
(115) |
(55,117) |
(55,232) |
|
Dividends paid |
- |
- |
- |
- |
- |
(4,835) |
(4,835) |
|
Share based payments |
- |
- |
- |
- |
198 |
- |
198 |
|
Exercised employee share based payments |
- |
- |
- |
- |
(4) |
4 |
- |
|
Issue of share capital |
4 |
- |
- |
- |
- |
- |
4 |
|
Total transactions with owners |
4 |
- |
- |
- |
194 |
(4,831) |
(4,633) |
|
Balance at 31 March 2025 |
1,128 |
(70) |
1,200 |
22,500 |
6,900 |
31,874 |
63,532 |
Consolidated statement of Cash Flows
|
For the year ended 3l March |
|
2026 |
2025 |
||
|
|
£000 |
£000 |
|||
|
Cashflows from operating activities: |
|
|
|
||
|
Loss before tax |
|
(13,638) |
(53,219) |
||
|
Non-cash and other movements in operating assets and liabilities included in profit before tax: |
|
|
|
||
|
Net finance costs |
|
9,181 |
6,370 |
||
|
Depreciation costs |
|
13,409 |
14,792 |
||
|
Amortisation of intangible assets |
|
13,936 |
11,659 |
||
|
Goodwill Impairment1 |
|
- |
52,900 |
||
|
Share based payments |
|
(36) |
198 |
||
|
Research and development tax credit |
|
(390) |
(532) |
||
|
Unrealised Foreign exchange (gain)/loss |
|
(12) |
(76) |
||
|
Non-cash Exceptional costs |
|
- |
(39) |
||
|
Exceptional items - operating cash flow impact |
|
671 |
(361) |
||
|
Movement in trade receivables |
|
(2,106) |
419 |
||
|
Movement in trade payables |
|
871 |
(4,899) |
||
|
Cash flow from operating activities |
|
21,886 |
27,212 |
||
|
Taxation paid |
|
(275) |
(1,866) |
||
|
Net cash flow from operating activities |
|
21,611 |
25,346 |
||
|
Cash flow from investing activities |
|
|
|
||
|
Purchase of property, plant and equipment |
|
(6,971) |
(8,252) |
||
|
Capitalisation of development costs |
|
(2,442) |
(2,907) |
||
|
Purchase of intangible assets |
|
- |
(87) |
||
|
Payment for subsidiary acquisitions, net of cash acquired |
|
- |
(48,465) |
||
|
Payment of contingent consideration |
|
(364) |
(2,500) |
||
|
Net cash used in investing activities |
|
(9,777) |
(62,211) |
||
|
Cash flow from financing activities |
|
|
|
||
|
Issue of shares |
|
9 |
4 |
||
|
Drawdown of bank loans |
|
500 |
57,000 |
||
|
Refinancing costs |
|
(405) |
- |
||
|
Lease interest payments |
|
(1,429) |
(928) |
||
|
Lease capital repayments |
|
(2,772) |
(3,424) |
||
|
Payments for long-term licence agreements |
|
(5,171) |
(2,559) |
||
|
Repayment of debt acquired on acquisition |
|
- |
(6,244) |
||
|
Finance costs paid |
|
(6,733) |
(4,816) |
||
|
Dividends paid |
|
- |
(4,835) |
||
|
Net cash (used in)/From financing activities |
|
(16,001) |
34,198 |
||
|
Net decrease in cash and cash equivalents |
|
(4,167) |
(2,667) |
||
|
Cash and cash equivalents at the beginning of the period |
|
13,088 |
15,755 |
||
|
Cash and cash equivalents at the end of the year |
|
8,921 |
13,088 |
||
1. General Information
Iomart Group plc is a public listed company, limited by shares, listed on the Alternative Investment Market ("AIM"), incorporated and domiciled in the United Kingdom and registered in Scotland under the Companies Act 2006. The address of the registered office is 6 Atlantic Quay, 55 Robertson Street, Glasgow, G2 8JD.
The financial statements are presented in UK Pounds Sterling because that is the currency of the primary economic environment in which the Group operates
2. Basis of preparation and accounting policies
The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 March 2026 and 31 March 2025 within the meaning of section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2025 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The financial information for the year ended 31 March 2026 is derived from the statutory accounts for that year which were approved by the Directors on 22 June 2026. The statutory accounts for the year ended 31 March 2026 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
The financial statements have been prepared on a historical cost basis, except where otherwise stated in the accounting policies set out below.
2.1 Reclassification of prior period information
Following the changes to business units as outlined in Note 2 the tables below show the reclassifications applied to each business unit to arrive at the revised segmentation disclosures for the historic periods.
|
For the year ended 31 March 2025 |
Original presentation |
Reclassification |
Revised presentation |
|
|||
|
|
£'000 |
£'000 |
£'000 |
|
|||
|
Iomart Cloud Services |
109,998 |
(12,939) |
97,059 |
||||
|
Atech |
21,463 |
8,725 |
30,188 |
||||
|
Domain & Mass Hosting (Easyspace) |
11,999 |
4,214 |
16,213 |
||||
|
Total Revenue |
143,460 |
- |
143,460 |
||||
|
Iomart disaggregated Revenue: |
|
|
|
||||
|
Cloud managed services |
76,363 |
(4,494) |
71,869 |
||||
|
Self-managed infrastructure |
23,686 |
(8,445) |
15,241 |
||||
|
Non-recurring |
9,949 |
- |
9,949 |
||||
|
Total Iomart revenue |
109,998 |
(12,939) |
97,059 |
||||
Adjusted EBITDA- historic periods reclassification
|
For the year ended 31 March 2025 |
Original presentation |
Reclassification |
Revised presentation |
|
|
£'000 |
£'000 |
£'000 |
|
Iomart Cloud Services |
30,207 |
(2,747) |
27,460 |
|
Atech |
3,211 |
(144) |
3,067 |
|
Domain & Mass Hosting (Easyspace) |
5,671 |
2,891 |
8,562 |
|
Adjusted EBITDA |
39,089 |
- |
39,089 |
In the current year, the Group has separately presented lease liabilities on the face of the consolidated statement of financial position. In the prior year, lease liabilities were presented as a component of borrowings. The prior year comparatives have been restated to reflect this change in presentation. This reclassification has no impact on the Group's previously reported net assets, profit or loss, or cash flows.
The effect of the restatement on the prior year balance sheet is as follows:
|
For the year ended 31 March 2025 |
Original presentation |
Reclassification |
Revised presentation |
|
|
£'000 |
£'000 |
£'000 |
|
Borrowings- non-current |
(112,132) |
15,132 |
(97,000) |
|
Borrowings- current |
(2,874) |
2,874 |
- |
|
Lease liabilities -non-current |
- |
(15,132) |
(15,132) |
|
Lease Liabilities - Current |
- |
(2,874) |
(2,874) |
|
Total Borrowings |
(115,006) |
- |
(115,006) |
2.2 Going concern
The Directors have assessed the Group's ability to continue as a going concern for a period of at least 12 months from the date of approval of these financial statements, being 22 June 2026. This assessment has been conducted in accordance with the Financial Reporting Council's guidance on the Going Concern Basis of Accounting and Related Reporting (February 2025).
Banking Facility
Subsequent to the year end, on 5 June 2026, the Group successfully amended and extended its £115 m revolving credit facility to 30 June 2028 with its existing banking syndicate of The Royal Bank of Scotland plc, HSBC UK Bank plc and Nationwide Building Society (trading as Virgin Money). At 31 March 2026, the facility was drawn £97.5 m, leaving £17.5 m undrawn. The facility is subject to two financial covenants tested quarterly: a leverage ratio (net debt to adjusted EBITDA, on a last-twelve-months basis) and an interest cover ratio (adjusted EBITDA to net interest, on a last-twelve-months basis). The covenant ratios have been set to reflect the Group's current leverage position and financial plans, with covenant ratios being flexed to recognise the expected quarterly forecast variability and trends but at all times retain a constant level of headroom against the base case forecasts.
Base Case Forecasts
The Directors have prepared detailed forecasts for the going concern period based on the Board-approved FY27 budget and relevant quarters of the five-year plan. Key assumptions underpinning the base case forecast include:
· a reduction in overall customer churn levels, as a percentage of the opening recurring revenue, from 18% in FY26 to 16% in FY27, supported by specific account-level review of the renewal profile and stabilisation within the Group's Self-Managed Infrastructure brands;
· revenue growth in strategically prioritised areas including Cloud managed services, Microsoft solutions, Cyber Security and Data Management, partially offset by some decline in legacy self-managed infrastructure;
· given the lower level of recurring revenue as the Group enters FY27, a modest decline in total revenue, recovering to growth in FY28, consistent with the Board's view of the current trading trajectory; and
· power costs fully hedged until 31 March 2027.
The base case demonstrates covenant compliance across all quarterly test dates and a stable liquidity position throughout the going concern period.
Stress Testing
The Directors have subjected the base case to a series of downside stress scenarios, which have been quantified and applied simultaneously without any management mitigation and intervention, other than the automatic reduction in bonus costs that would follow a material budget shortfall. The scenarios tested include:
· lower recurring revenue, reflecting an increase in customer churn or lower new order bookings;
· margin compression, reflecting pricing pressure or higher cost of delivery;
· higher interest costs, reflecting the risk of an increase in SONIA interest rates; and
· higher capital expenditure outflows and adverse working capital movements.
Under the accumulated downside scenario, the Group's covenant headroom reduces but the Group remains covenant compliant throughout the going concern assessment period.
Mitigation Actions
The Directors have identified a range of mitigation actions that are within management's control and have been assessed as having a high likelihood of delivery. These include:
· targeted headcount reductions;
· reduction in discretionary spend areas such as marketing expenditure, (internal travel and other flexible operating expenditure;
· deferral or rescheduling of non-committed capital expenditure; and
· finance leasing of eligible capital assets.
When these mitigation actions are applied to the stress scenario, covenant headroom and liquidity are strengthened materially throughout the going concern period.
Reverse Stress Test
The Directors have also performed a reverse stress test to identify the level of downside required to result in a breach of the leverage covenant. The analysis demonstrates that revenue would need to fall by more than 25% relative to the base case forecast (assuming base case EBITDA margins are maintained), or EBITDA margins would need to deteriorate by approximately 5 percentage points of revenue from the base case forecast, for a covenant breach to occur.
The Directors consider either scenario to be remote, given the recurring nature of the Group's revenue, the granularity of the customer base, and the relatively predictable and partially variable cost base.
Conclusion
Having considered the base case forecasts, the results of the stress test and reverse stress test, the availability of mitigation actions, and the principal risks and uncertainties facing the Group, the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future and for a period of at least 12 months from the date of approval of these financial statements. In performing their analysis, the Directors have not identified any material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. Accordingly, the Directors consider it appropriate to continue to adopt the going concern basis of accounting in preparing these financial statements.
2.3 New accounting pronouncements
2.3.1 New accounting pronouncements adopted by the Group
The Group has adopted the following amendments to standards which became effective from 1 January 2025:
· Lack of Exchangeability (Amendments to IAS 21 ) issued in August 2023.
· Classification of Liabilities (IAS 1)
· Non‑current Liabilities with Covenants (IAS 1)
· Supplier Finance Arrangements (IAS 7 & IFRS 7)
· Sale or Contribution of Assets (IFRS 10 & IAS 28)
· Lease Liability in a Sale & Leaseback (IFRS 16)
The above amendment does not have a material effect on these consolidated financial statements.
2.4 Judgements in applying accounting policies and sources of estimation uncertainty
The application of IFRS 15 requires management to exercise judgement in areas that have a material effect on the timing and amount of revenue recognised. The most significant judgements relate to principal versus agent assessments in relation to revenue recognition.
Principal versus agent: Microsoft CSP arrangements
A key area of judgement is whether the Group acts as principal or agent in its Microsoft Cloud Solution Provider ("CSP") arrangements, which generate significant revenue across the Group of £36m. This assessment is inherently subjective and has a material impact on whether revenue is reported on a gross or net basis.
In making this judgement, management evaluates whether the Group controls the specified good or service before it is transferred to the customer, considering indicators such as primary responsibility for fulfilment, exposure to cost risk and discretion in pricing. As these indicators could indicate both a principal or agency arrangement, they require careful interpretation, with the conclusion based on the overall balance of indicators, the substance of the arrangement and represent a significant judgement under IFRS 15.
Microsoft Azure (consumption-based)
The Group acts as principal in its Azure CSP arrangements. Customers contract directly with the Group, which is responsible for onboarding, provisioning, billing and ongoing service delivery, including substantive support. The Group provides a combined service of access to Microsoft Azure and ongoing support, which is not distinct within the contract and is delivered as a single stand‑ready service. In assessing principal versus agent, the Group has determined that it controls the overall service prior to transfer, supported by its responsibility for the customer relationship and service delivery, pricing discretion and its role in managing the underlying hosting solution. Accordingly, revenue is recognised on a gross basis over time over the life of the contract, with amounts payable to Microsoft recognised within cost of sales.
Microsoft 365 (seat-based licences)
The Group also acts as principal in Microsoft 365 CSP arrangements. It is responsible for provisioning, billing and ongoing support, and sets customer pricing. The Group provides an integrated licence and support service that is not distinct within the contract and is delivered as a single stand‑ready service. Based on its responsibility for service delivery, customer relationship and pricing, the Group controls the service prior to transfer and therefore recognises revenue on a gross basis over time over the life of the contract, with amounts payable to Microsoft recognised within cost of sales.
Managed Microsoft services
Where Microsoft services are integrated into a broader managed service offering, the Group acts as principal. This is supported by the significant integration of third-party services with the Group's own capabilities to deliver a combined service outcome to the customer. Revenue is recognised over time over the service period.
Identification of performance obligations
The Group's contracts often bundle multiple goods and services, particularly within managed cloud and hybrid cloud offerings. Management assesses whether these represent a single integrated performance obligation or separate distinct obligations.
Where services are highly interdependent and delivered as a combined solution, they are treated as a single stand-ready obligation satisfied over time. Where distinct goods or services are identifiable (for example, consultancy or migration services), they are accounted for separately, with the transaction price allocated based on stand-alone selling prices.
Principal versus agent: third-party resale
The Group also resells third‑party hardware and software, with principal versus agent classification requiring judgement on a contract‑by‑contract basis. Where the Group controls the goods or services before transfer, sets pricing and is responsible for fulfilment, it acts as principal and recognises revenue on a gross basis at the point of delivery.
Timing of revenue recognition: set-up and onboarding fees
Contracts may include non-recurring fees for set-up, onboarding or migration services. Judgement is required to determine whether these activities transfer a distinct good or service. Where they do not, the fees are treated as advance consideration for the ongoing service and recognised over the contract term.
Domain registration and hosting contracts
Domain registration and hosting services are typically billed in advance on annual or multi-year terms. Revenue is recognised over the service period as the Group satisfies its stand-ready obligation. Management exercises judgement in determining the appropriate recognition period where contract length differs from expected customer behaviour.
2.4.2 Sources of estimation uncertainty
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities.
A key source of estimation uncertainty relates to the impairment assessment of goodwill. The Group performs an annual impairment review, or more frequently where indicators of impairment exist, which requires an estimate of the recoverable amount of the cash‑generating units ("CGUs") to which goodwill has been allocated.
The recoverable amount is determined using value‑in‑use calculations, which are based on estimated future cash flows. These calculations involve significant estimation uncertainty, particularly in respect of assumptions such as forecast revenue growth, operating margins and the discount rate applied.
Based on the assessment performed during the year, the recoverable amount of each CGU or group of CGUs exceeded its carrying value and no impairment charge has been recognised. Further details of the key assumptions applied are provided in Note 10.
The carrying value of goodwill at 31 March 2026 is £103.5m. Sensitivities in respect of the key assumptions applied in the impairment assessment, including the discount rate and forecast cash flows, are disclosed in Note 10, which forms an integral part of this disclosure.
3. Segmental analysis
3.1 Operating segments
The Group's operating segments are defined and presented in accordance with IFRS 8: Operating Segments, based on the internal management reporting structure and financial information reviewed by the Chief Operating Decision Maker (CODM), identified as the Chief Executive Officer or equivalent senior officer.
The Group's primary reporting format is by business unit. Reporting of assets and liabilities by reportable segment has not been included below, as this is not information that is provided to key decision makers on a regular basis.
The CEO assesses the performance of the operating segments based on revenue and adjusted EBITDA.
The Group's reportable segments are as follows:
Iomart Cloud Services
Provider of managed cloud hosting, colocation, and connectivity services through owned UK data centres. Delivers private and hybrid cloud solutions, backup and disaster recovery, and managed IT services primarily to the larger SME and corporate market. The segment includes the Oriium and RapidSwitch brands.
Atech
Leading Microsoft Solution Partner, delivering complex public cloud deployments, modern workplace solutions, digital transformation and specialised managed services to mid-sized enterprises. Atech is the Group's centre of excellence for Microsoft (Azure, Modern Work and AI) and managed security services.
Domain & Mass Hosting (Easyspace)
Delivers domain name registration and mass hosting services primarily to small and micro businesses, operating under the Easyspace, Hosting UK and Sonassi brands.
Corporate Centre
Includes central corporate costs and debt costs which are not allocated to the three operating segments.
During the year the Group revised its operating segments to align with an updated business unit structure. The prior year comparatives have been restated to reflect two reclassifications:
· Sonassi transferred from Iomart Cloud Services to Domain & Mass Hosting (Easyspace)
The Sonassi brand, which specialises in eCommerce hosting, was integrated with Easyspace and Hosting UK to form a unified domain and hosting business. Certain additional customer cohorts from legacy Iomart self-managed infrastructure brands were also migrated to Hosting UK as part of this consolidation.
· Extrinsica transferred from Iomart Cloud Services to Atech
Extrinsica's operations were consolidated into Atech to bring all Microsoft solution delivery under a single management structure, reflecting Atech's role as the Group's dedicated Microsoft and security practice.
The reclassifications are detailed in Note 1. The net effect of these reclassifications on Iomart Cloud Services revenue for the year ended 31 March 2025 was a reduction of £12.9m, with corresponding increases of £4.2m in Domain & Mass Hosting and £8.7m in Atech. There is no impact on total Group revenue or profit.
3.2 Adjusted EBITDA
Adjusted EBITDA is a non-GAAP alternative performance measure used by management to assess operating performance and allocate resources. It is defined as earnings before interest, tax, depreciation and amortisation, adjusted to exclude share-based payment charges, acquisition-related costs, gains or losses on the revaluation of contingent consideration, foreign exchange gains and losses on FX forward contracts and the associated foreign exchange movements on related liabilities, and other material non-recurring items. A full definition and reconciliation to the most directly reconcilable IFRS measure is provided in the supplementary information S.1.
All segments are continuing operations. No customer accounts for 10% or more of external revenues. Inter-segment transactions are accounted for using an arm's-length commercial basis. Such inter-segment transactions are not material to the reported segment results and no amounts have been separately presented.
3.3 Revenue by operating segment
|
|
2026 |
2025* |
|
Revenue by operating segment |
£'000 |
£'000 |
|
Iomart Cloud Services |
89,552 |
97,059 |
|
Atech |
50,123 |
30,188 |
|
Domain & Mass Hosting (Easyspace) |
15,210 |
16,213 |
|
Total revenue |
154,885 |
143,460 |
*Reclassification of historic periods is detailed in note 1.
Iomart Cloud Services revenue can be further disaggregated as follows:
|
|
2026 |
2025 |
|
Iomart Cloud Services |
£'000 |
£'000 |
|
Cloud managed services |
65,976 |
71,869 |
|
Self-managed infrastructure (SMI) |
12,415 |
15,241 |
|
Non-recurring |
11,161 |
9,949 |
|
Total revenue |
89,552 |
97,059 |
*Reclassification of historic periods is detailed in note 1.
3.4 Recurring and Non-Recurring Revenue
Revenue is disaggregated between recurring and non‑recurring revenue, reflecting the nature and timing of revenue streams. Recurring revenue represents contracted or repeat service revenues, while non‑recurring revenue includes hardware sales and project-based services. The Group considers this to be the most meaningful disaggregation of its revenue for users of the financial statements, reflecting the different economic characteristics, cash flow uncertainty profiles and demand drivers associated with each category.
The classification of revenue as recurring or non-recurring requires judgement. Recurring revenue includes contracted monthly and annual service fees, domain renewals and managed service retainers where there is a reasonable expectation of continuation. Non-recurring revenue includes hardware resale, one-off project and implementation fees, and professional services engagements that are not expected to repeat on a regular basis. Where contracts contain both recurring and non-recurring elements, revenue is allocated between categories based on the nature of each performance obligation.
The amount of recurring and non-recurring revenue recognised by the group during the year can be summarised as follows:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Recurring |
133,648 |
127,569 |
|
Non-recurring |
21,237 |
15,891 |
|
Total revenue |
154,885 |
143,460 |
3.5 Geographical Information
In presenting the consolidated information on a geographical basis, revenue is based on the geographical location of customers. The United Kingdom is the place of domicile of the parent company, Iomart Group plc. No individual country other than the United Kingdom contributes a material amount of revenue; therefore, revenue from outside the United Kingdom has been shown as from Rest of the World.
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
United Kingdom |
140,917 |
126,272 |
|
Rest of world |
13,968 |
17,188 |
|
|
154,885 |
143,460 |
3.6 Profit by operating segments
Segment performance is measured based on adjusted EBITDA, as this metric is used by the Chief Operating Decision Maker ("CODM") to assess performance and allocate resources across the Group.
|
For the year ended 31 March 2026 |
|
|
|
|
|
|||||||
|
£'000 |
Iomart Cloud Services |
Atech |
Domain & Mass hosting (Easyspace) |
Corporate centre |
Total |
|
||||||
|
Recurring revenue |
80,559 |
41,145 |
14,976 |
(3,032) |
133,648 |
|
||||||
|
Non-recurring |
11,161 |
11,077 |
235 |
(1,236) |
21,237 |
|
||||||
|
Total revenue |
91,720 |
52,222 |
15,211 |
(4,268) |
154,885 |
|
||||||
|
Cost of sales |
(49,467) |
(35,365) |
(5,790) |
4,267 |
(86,355) |
|
||||||
|
Administrative expenses |
(25,166) |
(11,781) |
(1,800) |
- |
(38,747) |
|
||||||
|
Group overheads |
|
|
|
(4,222) |
(4,222) |
|
||||||
|
Adjusted EBITDA |
17,087 |
5,076 |
7,621 |
(4,223) |
25,561 |
|
||||||
|
Depreciation |
(13,059) |
(249) |
(101) |
- |
(13,409) |
|
||||||
|
Amortisation other intangibles |
(6,283) |
(313) |
(313) |
(77) |
(6,986) |
|
||||||
|
Total adjusted EBIT |
(2,255) |
4,514 |
7,207 |
(4,299) |
5,166 |
|
||||||
|
Finance costs |
|
|
|
(9,181) |
(9,181) |
|
||||||
|
Share based payments |
|
|
|
36 |
36 |
|
||||||
|
Acquisition costs |
|
|
|
(480) |
(480) |
|
||||||
|
Non-recurring administrative expenses |
|
|
|
(2,229) |
(2,229) |
|
||||||
|
Amortisation-acquired intangible assets |
|
|
|
(6,950) |
(6,950) |
|
||||||
|
IFRS loss before tax |
|
|
|
|
(13,638) |
|
||||||
|
For the year ended 31 March 2025 |
|
|
|
|
||||||||
|
£'000 |
Iomart Cloud Services |
Atech |
Domain & Mass hosting (Easyspace) |
Corporate centre |
Total |
|||||||
|
Recurring revenue |
88,967 |
23,739 |
16,103 |
(1,240) |
127,569 |
|||||||
|
Non-recurring |
10,051 |
6,449 |
110 |
(718) |
15,891 |
|||||||
|
Total revenue |
99,018 |
30,188 |
16,213 |
(1,958) |
143,460 |
|||||||
|
Cost of sales |
(50,114) |
(19,590) |
(5,251) |
1,958 |
(72,997) |
|||||||
|
Administrative expenses |
(21,444) |
(7,530) |
(2,400) |
- |
(31,374) |
|||||||
|
Group overheads |
|
- |
|
(4,777) |
(4,777) |
|||||||
|
Adjusted EBITDA |
27,460 |
3,067 |
8,562 |
(4,777) |
34,312 |
|||||||
|
Depreciation |
(14,522) |
(132) |
(76) |
|
(14,730) |
|||||||
|
Amortisation other intangibles |
(5,945) |
(288) |
(350) |
(174) |
(6,757) |
|||||||
|
Total adjusted EBIT |
6,993 |
2,647 |
8,136 |
(4,951) |
12,825 |
|||||||
|
Finance costs |
|
|
|
(6,370) |
(6,370) |
|||||||
|
Share based payments |
|
|
|
(198) |
(198) |
|||||||
|
Acquisition costs |
|
|
|
(1,674) |
(1,674) |
|||||||
|
Goodwill impairment charges |
|
|
|
(52,900) |
(52,900) |
|||||||
|
Amortisation-acquired intangible assets |
|
|
|
(4,902) |
(4,902) |
|||||||
|
IFRS loss before tax |
|
|
|
|
(53,219) |
|||||||
4. Taxation
4.1 Tax credit/(charge) to the consolidated income statement
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Corporation Tax: |
|
|
|
Tax credit for the year |
(75) |
(1,024) |
|
Adjustment relating to prior years |
607 |
414 |
|
Total current taxation charge |
532 |
(610) |
|
Deferred Tax: |
|
|
|
Origination and reversal of temporary differences |
2,814 |
24 |
|
Adjustment relating to prior years |
1,124 |
(1,312) |
|
Total deferred taxation (credit)/charge |
3,938 |
(1,288) |
|
|
|
|
|
Total taxation credit/(charge) for the year |
4,470 |
(1,898) |
The adjustment relating to prior years are amendments recognised on the finalisation of annual taxation computations.
4.2 Tax reconciliation
The differences between the total taxation charge shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax are as follows:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Loss before tax |
(13,638) |
(53,219) |
|
|
|
|
|
Tax credit @ 25% (2025: 25%) |
(3,410) |
(13,305) |
|
|
|
|
|
Expenses disallowed for tax purposes |
226 |
13,505 |
|
R&D expenditure credits |
- |
6 |
|
Adjustments in current tax relating to prior years |
(607) |
(414) |
|
Tax effect of different statutory tax rates of overseas jurisdictions |
1 |
42 |
|
Tax effect of share-based remuneration |
120 |
574 |
|
Fixed asset differences disallowed for tax purposes |
249 |
203 |
|
Income not taxable for tax purposes |
3 |
(90) |
|
Movement in deferred tax not recognised |
72 |
65 |
|
Movement in deferred tax relating to prior years |
(1,124) |
1,312 |
|
Total taxation (credit)/charge for the year |
(4,470) |
1,898 |
The weighted average applicable tax rate for the year ended 31 March 2026 was 25% (2025: 25%). The effective rate of tax for the year, based on the taxation charge for the year as a percentage of the loss before tax is 32.8% (2025: (0.04)%).
The effective tax rate in the prior year was significantly distorted by a large number of non-taxable charges, most notably the non-cash goodwill impairment, together with prior year adjustments. While the current year effective rate continues to be influenced by non-taxable items and movements in deferred tax not recognised, the overall distortion is less pronounced than in the prior year. As a predominantly UK-based business, the underlying tax rate broadly aligns with the headline UK corporation tax rate.
Deferred tax assets and liabilities at 31 March 2026 have been calculated based on the 25% rate enacted at the reporting date (2025: 25%).
4.3 Deferred tax
The Group recognised deferred tax assets/(liabilities) as follows:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Share-based remuneration |
30 |
197 |
|
Capital allowances temporary differences |
(3,728) |
(3,177) |
|
Deferred tax on development costs |
(887) |
(1,224) |
|
Deferred tax on customer relationships |
(3,444) |
(5,955) |
|
Deferred tax on intangible software |
(16) |
(35) |
|
Brought forward tax losses |
1,085 |
107 |
|
Other short-term timing differences |
814 |
3 |
|
Deferred tax liability |
(6,146) |
(10,084) |
At the year end, the Group had £4.3m (2025: £2.9m) of brought forward tax losses. Of this amount £4.3m has recognised as having a deferred tax value (2025: £0.4m). The Group considers this amount recoverable against future taxable profits.
The movement in the deferred tax account during the year was:
|
|
Share-based remuneration |
Capital allowances temporary differences |
Development costs |
Other short term timing differences |
Acquired customer relationships & brands |
Intangible software |
Brought forward tax losses |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 March 2024 |
891 |
(1,687) |
(720) |
- |
(3,286) |
(82) |
- |
(4,884) |
|
Acquired on acquisition of subsidiary |
- |
(21) |
|
- |
(3,891) |
|
|
(3,912) |
|
Movement relating to prior year |
- |
(963) |
(349) |
- |
- |
|
|
(1,312) |
|
Credited/(charged) to statement of comprehensive income |
(694) |
(506) |
(155) |
3 |
1,222 |
47 |
107 |
24 |
|
Balance at 1 April 2025 |
197 |
(3,177) |
(1,224) |
3 |
(5,955) |
(35) |
107 |
(10,084) |
|
|
|
|
|
|
|
|
|
|
|
Movement relating to prior year |
- |
111 |
339 |
7 |
774 |
- |
(107) |
1,124 |
|
Credited/(charged) to statement of comprehensive income |
(167) |
(662) |
(2) |
804 |
1,737 |
19 |
1,085 |
2,814 |
|
Balance at 31 March 2026 |
30 |
(3,728) |
(887) |
814 |
(3,444) |
(16) |
1,085 |
(6,146) |
5. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year, after deducting shares held by the Employee Benefit Trust. Diluted earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the total of the weighted average number of ordinary shares in issue during the year after adjusting for the dilutive potential ordinary shares relating to share options. The calculations of earnings per share are based on the following results:
|
|
2026 |
2025 |
|
£'000 |
£'000 |
|
|
Loss for the year and basic earnings attributed to ordinary shareholders |
(9,168) |
(55,117) |
|
Weighted average number of ordinary shares: |
|
|
|
Called up, allotted and fully paid at start of period |
112,764 |
112,342 |
|
1.6pShares held by Employee Benefit Trust |
(141) |
(141) |
|
Issued share capital in the period |
504 |
244 |
|
Weighted average number of ordinary shares - basic |
113,127 |
112,445 |
|
Dilutive impact of share options |
2,694 |
1,128 |
|
Weighted average number of ordinary shares - diluted |
115,821 |
113,573 |
|
|
|
|
|
Basic loss per share (p) |
(8.1) |
(49.0) |
|
Diluted loss per share (p) |
(8.1) |
(49.0) |
As the Group reported a loss for the year, the share options outstanding are anti-dilutive and have therefore been excluded from the diluted loss per share calculation. Accordingly, diluted loss per share equals basic loss per share.
Iomart Group plc assesses the performance of the Group by adjusting earnings per share, calculated in accordance with IAS 33, to exclude certain non-trading items. The calculation of the earnings per ordinary share on a basis which excludes such items is based on the following adjusted earnings:
|
|
2026 |
2025 |
|
£'000 |
£'000 |
|
|
Loss for the financial period and basic earnings attributed to ordinary shareholders |
(9,168) |
(55,117) |
|
Amortisation of acquired intangible assets |
6,950 |
4,902 |
|
Acquisition costs |
480 |
1,674 |
|
Exceptional administrative expenses |
2,229 |
- |
|
Share based payments |
(36) |
198 |
|
Exceptional goodwill impairment charge |
|
52,900 |
|
Tax impact of adjusting items |
(2,286) |
(734) |
|
Adjusted loss for the financial year and adjusted basic earnings attributed to ordinary shareholders |
(1,831) |
3,823 |
|
Adjusted basic earnings per share (p) |
(1.6) |
3.4 |
|
Adjusted diluted earnings per share (p) |
(1.6) |
3.4 |
6 Intangible assets
|
|
Goodwill |
Development |
Acquired customer |
Acquired Brand |
Software |
Acquired beneficial contract |
Domain names & IP addresses |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Cost: |
|
|
|
|
|
|
|
|
|
At 1 April 2024 |
109,821 |
18,423 |
67,596 |
- |
11,226 |
86 |
336 |
207,488 |
|
Arising on acquisitions |
46,615 |
- |
13,770 |
1,794 |
24 |
- |
- |
62,203 |
|
Additions |
- |
2,907 |
- |
- |
18,711 |
- |
- |
21,618 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Foreign exchange differences |
- |
- |
(20) |
- |
(15) |
- |
2 |
(33) |
|
At 31 March 2025 |
156,436 |
21,330 |
81,346 |
1,794 |
29,946 |
86 |
338 |
291,276 |
|
Additions |
- |
2,442 |
- |
- |
- |
- |
- |
2,442 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Foreign exchange differences |
- |
- |
(13) |
- |
(10) |
- |
- |
(23) |
|
At 31 March 2026 |
156,436 |
23,772 |
81,333 |
1,794 |
29,936 |
86 |
338 |
293,695 |
|
Accumulated amortisation: |
|
|
|
|
|
|
|
|
|
At 1 April 2024 |
- |
(14,380) |
(57,537) |
- |
(10,124) |
(83) |
(312) |
(82,436) |
|
Amortisation Charge |
- |
(2,219) |
(4,828) |
(74) |
(4,527) |
(3) |
(8) |
(11,659) |
|
Foreign exchange differences |
- |
- |
21 |
- |
3 |
- |
- |
24 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Impairment charge |
(52,900) |
- |
- |
- |
- |
- |
- |
(52,900) |
|
At 31 March 2025 |
(52,900) |
(16,599) |
(62,344) |
(74) |
(14,648) |
(86) |
(320) |
(146,971) |
|
Amortisation Charge |
- |
(2,675) |
(6,839) |
(111) |
(4,301) |
- |
(10) |
(13,936) |
|
Foreign exchange differences |
- |
- |
12 |
- |
11 |
- |
- |
23 |
|
Disposals |
- |
- |
- |
- |
- |
- |
- |
- |
|
Acquisition- related adjustment |
- |
(579) |
- |
- |
- |
- |
- |
(579) |
|
At 31 March 2026 |
(52,900) |
(19,853) |
(69,171) |
(185) |
(18,937) |
(86) |
(330) |
(161,462) |
|
|
|
|
|
|
|
|
|
|
|
Carrying amount: |
|
|
|
|
|
|
|
|
|
At 31 March 2026 |
103,536 |
3,919 |
12,162 |
1,609 |
10,999 |
- |
8 |
132,232 |
|
At 31 March 2025 |
103,536 |
4,731 |
19,002 |
1,720 |
15,298 |
- |
18 |
144,305 |
Total additions in the year were £2.4m (2025: £21.6m). In the current year, all additions related to development costs (2025: £2.9m). The Group continues to drive innovation by developing and delivering projects across its teams. A summary of the key project types and their characteristics is set out below:
· Automation and deployment;
· Identity access management initiatives;
· Continuous development of existing and acquired software; and
· General security improvements.
In 2025, software additions of £18,711,000 consisted of internally generated software as well as the recognition of the 5-year Broadcom commitment. None of the additions arose from arrangements classified as leases under IFRS 16 (2025: £nil).
Acquisition related adjustments are related to adjustments to development costs recognised in the current year, primarily in respect of discontinued projects following in-group integrations, including amounts relating to prior periods.
Included within acquired customer relationships are the following significant net book values: £9.7m in respect of Atech Group Limited with a remaining useful life of 14 years; £1.3m in respect of Concepta Capital Limited with a remaining useful life of 4 years; £0.8m in respect of Accesspoint Group Holdings Limited with a remaining useful life of 6 years; £0.1m in respect of Memset Limited with a remaining useful life of 2 years; and £0.1m in respect of LDEX Group Limited and £0.03m in respect of Bytemark Limited, both with a remaining useful life of 1 year. During the year, the Group accelerated the amortisation of the Extrinsica Global Holdings Limited customer relationship intangible, resulting in a charge of £2.1m, with the asset fully written down at 31 March 2026.
Goodwill is allocated to Cash Generating Units ("CGUs") or groups of CGUs and reviewed annually for impairment in accordance with IAS 36 Impairment of Assets. No impairment was identified in the year ended 31 March 2026. In the prior year, an impairment charge of £52.9m was recognised against the Iomart Cloud Services group of CGUs, reflecting a strategic shift away from low-growth, heritage product areas and accelerated customer churn experienced within that group of CGUs.
The carrying value of goodwill by each CGU or group of CGUs is as follows:
|
|
2026 |
Reclassified 2025* |
|
|
£'000 |
£'000 |
|
|
|
|
|
Iomart Cloud Services |
27,237 |
27,237 |
|
Atech |
46,615 |
46,615 |
|
Domain & Mass Hosting (Easyspace) |
29,684 |
29,684 |
|
Total |
103,536 |
103,536 |
Following the changes to the Group's operating segments described in note 1, prior year goodwill carrying values have been reclassified between cash-generating units to reflect the current period's basis of segmentation. This reclassification has no impact on the total carrying value of goodwill or on the results of the impairment assessment performed in the prior year.
The recoverable amount of each CGU or group of CGUs has been determined on a value-in-use basis using post-tax discounted cash flows derived from Board-approved budgets covering a five-year period, extrapolated beyond that period using a terminal growth rate. The key assumptions applied are set out in the table below:
|
|
|
|
Iomart Cloud Services |
Atech |
Domain & Mass Hosting (Easyspace) |
|
||||
|
|
||||||||||
|
|
|
|
2026 |
2025 |
2026 |
2025 |
2026 |
2025 |
|
|
|
Discount rate (pre-tax) |
14.4% |
14.8% |
14.4% |
14.8% |
14.4% |
14.8% |
|
|||
|
Discount rate (post-tax) |
10.8% |
11.1% |
10.8% |
11.1% |
10.8% |
11.1% |
|
|||
|
5 year average EBITDA growth |
14% |
0% |
29% |
29% |
-3% |
-2% |
|
|||
|
Future perpetuity rate |
2.5% |
2.5% |
2.5% |
2.5% |
0% |
0% |
|
|||
|
Initial period for which cash flows are estimated (years) |
5 |
5 |
5 |
5 |
5 |
5 |
|
|||
The post-tax discount rate of 10.8% (2025: 11.1%) has been applied consistently across all three CGUs or groups of CGUs and reflects current market assessments of the time value of money and the risks specific to each CGU or group of CGUs. A terminal growth rate of 2.5% has been applied to Iomart Cloud Services and Atech, reflecting long-term UK growth expectations for the markets in which these CGUs or groups of CGUs operate. No terminal growth has been assumed for Easyspace, reflecting the mature and commoditised nature of the domain registration and mass-hosting market, where competitive pricing pressure limits structural volume growth, and management's strategic focus on cash generation rather than investment-led expansion. These perpetuity rates are unchanged from the prior year.
The five-year average EBITDA growth rates reflect the Board-approved budget for each CGU and represent the compound annual growth rate from the FY26 actual EBITDA base to the FY31 terminal year of the forecast period. For Iomart Cloud Services, which comprises a group of cash-generating units tested in aggregate, the rate applied is 14% (2025: 0%), reflecting early-stage recovery in managed cloud services following strategic repositioning undertaken during FY2026 and the significant shift in the private cloud infrastructure market caused by Broadcom's disruptive changes to VMWare business model and global partnership programmes. For Atech the rate applied is 29% (2025: 29%), reflecting a normalisation of growth expectations from the high initial rate assumed at the time of acquisition in October 2024 to a rate more consistent with the CGU's longer-term strategic profile. For Easyspace the rate applied is -3% (2025: -2%), reflecting a reduction from the FY26 EBITDA base driven by continued pricing pressure and customer mix changes in the mature domain and mass-hosting market; a terminal growth rate of 0% has been applied, consistent with management's view that the CGU will stabilise at a sustainable level of cash generation in perpetuity.
These rates are calculated on a consistent basis across all three CGUs and are derived directly from the Board-approved five-year budget.
Management has considered the indicators of potential impairment present elsewhere in the annual report and financial statements, including declining organic revenue, customer churn of £21.2m, lower adjusted EBITDA and increased net leverage, and has concluded that no impairment charge arises in the year ended 31 March 2026. In the prior year, an impairment charge of £52.9m was recognised against the Iomart Cloud Services group of CGUs, reflecting a strategic shift away from low-growth, heritage product areas and accelerated customer churn experienced within that group of CGUs.
The Group's aggregate headroom across all CGUs and groups of CGUs is £83.9m (2025: £12.7m). The primary driver of the increase is the prior year impairment of £52.9m, which substantially reduced the carrying value of the Iomart Cloud Services group of CGUs, historically the principal source of impairment risk. The recoverable amount of the Iomart Cloud Services group of CGUs exceeds its carrying value by £45.6m at 31 March 2026. Additional contributing factors include the reclassification of Extrinsica to the Atech CGU and Sonassi to the Easyspace CGU, a reduction in the post-tax discount rate from 11.09% to 10.78%, and higher projected EBITDA in the Atech forecast period.
The five-year cash flow forecasts are derived from the Board-approved budget and reflect management's assessment of the recovery trajectory, underpinned by the Group's strategic partnerships with Microsoft, Broadcom and Commvault and by ongoing cost efficiencies.
Reasonably possible downside sensitivities have been applied to the key assumptions across all three CGUs and groups of CGUs. These comprise, individually and in combination: an increase in the post-tax discount rate of +0.5% (to 11.3%) and +1.0% (to 11.8%); and a reduction in forecast free cash flows of 5% and 10% against the Board-approved budget.
In relation to Iomart Cloud Services, as noted earlier, the Directors recognise headroom has increased significantly from the prior year. Under downside scenario, applied to Iomart Cloud Services, incorporating a 10% reduction in forecast free cash flows and an increase in the discount rate to 11.8%, positive headroom of £7.4m is retained. The key assumption to which the recoverable amount of this group of CGUs is most sensitive is the rate of recovery in EBITDA over the forecast period, driven by new order bookings and the management of customer churn. The Board-approved budget applies a growth rate in EBITDA of 13.0% from the FY26 actual base to the FY31 terminal year, reflecting the expected benefit of the Group's strategic partnerships with Microsoft, Broadcom and Commvault and the ongoing cost efficiency programme. The Directors consider this rate to be supportable based on current trading, pipeline and the broader market context.
Atech CGU recoverable amount exceeds the carrying value by £28.6m under the base case. Under the most severe combined downside scenario, headroom reduces to £9.7m. No impairment is indicated under any sensitivity scenario applied.
The recoverable amounts of all CGUs or groups of CGUs exceed their respective carrying values under both the base case assumptions and all reasonably possible downside scenarios considered. Consequently, the Directors have concluded that no impairment charge is required for the year ended 31 March 2026.
All amortisation and impairment charges are included within depreciation, amortisation and impairment of non-financial assets and are presented within administrative expenses in the statement of comprehensive income.
7 Property, plant and equipment
|
|
Freehold property |
Right of use assets* |
Property improvements |
Datacentre equipment |
Computer equipment |
Office equipment |
Motor vehicles |
Total |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Cost: |
|
|
|
|
|
|
|
|
|
Re-presented cost at 31 March 2024* |
8,236 |
32,588 |
18,140 |
29,409 |
127,292 |
3,094 |
89 |
218,848 |
|
Acquisition of subsidiary |
- |
256 |
101 |
- |
12 |
78 |
- |
447 |
|
Additions in the period |
- |
2,913 |
2,584 |
- |
4,814 |
78 |
- |
10,389 |
|
Disposals in the period |
- |
- |
(312) |
(1,630) |
(72) |
(217) |
(4) |
(2,235) |
|
Currency translation differences |
- |
(3) |
(69) |
- |
(181) |
- |
- |
(253) |
|
At 31 March 2025 |
8,236 |
35,754 |
20,444 |
27,779 |
131,865 |
3,033 |
85 |
227,196 |
|
Additions in the period |
19 |
5,262 |
276 |
3,104 |
3,782 |
46 |
- |
12,489 |
|
Disposals in the period |
- |
(2,643) |
(180) |
- |
- |
- |
- |
(2,823) |
|
Currency translation differences |
- |
(257) |
- |
- |
51 |
- |
- |
(206) |
|
Onerous lease impairment |
- |
(31) |
- |
- |
- |
- |
- |
(31) |
|
At 31 March 2026 |
8,255 |
38,085 |
20,540 |
30,883 |
135,698 |
3,079 |
85 |
236,625 |
|
Accumulated depreciation: |
|
|
|
|
|
|
|
|
|
At 31 March 2024 |
(1,533) |
(15,251) |
(10,131) |
(19,697) |
(106,006) |
(2,704) |
(34) |
(155,356) |
|
Disposals in the period |
- |
- |
312 |
1,630 |
72 |
215 |
4 |
2,233 |
|
Currency translation differences |
- |
- |
58 |
- |
176 |
- |
- |
234 |
|
Charge for the period |
(237) |
(3,894) |
(1,066) |
(1,585) |
(7,808) |
(187) |
(15) |
(14,792) |
|
At 31 March 2025 |
(1,770) |
(19,145) |
(10,827) |
(19,652) |
(113,566) |
(2,676) |
(45) |
(167,681) |
|
Disposals in the period |
- |
2,475 |
180 |
- |
- |
- |
- |
2,655 |
|
Currency translation differences |
- |
106 |
6 |
- |
(59) |
- |
- |
53 |
|
Charge for the period |
(290) |
(3,675) |
(982) |
(1,932) |
(6,385) |
(130) |
(15) |
(13,409) |
|
At 31 March 2026 |
(2,060) |
(20,239) |
(11,623) |
(21,584) |
(120,010) |
(2,806) |
(60) |
(178,382) |
|
Carrying amount: |
|
|
|
|
|
|
|
|
|
At 31 March 2026 |
6,195 |
17,846* |
8,917 |
9,299 |
15,688 |
273 |
25 |
58,243 |
|
At 31 March 2025 |
6,466 |
16,609 |
9,617 |
8,127 |
18,299 |
357 |
40 |
59,515 |
* The net book value of Right of use assets primarily consists of Property improvements £15.6m (2025: £14.6m) and £2.2m of Datacentre equipment (2025: £2.0m). Depreciation charges associated with these assets were £2.4m (2025: £2.1m) and £1.1m (2025: £1.7m) respectively. The remaining net book value relates to leased motor vehicles purchased during the year.
There were no additions in respect of reinstatement provisions during the current or prior year.
Of the total remaining additions, excluding right out use assets, in the year of £7.2m (2025: £7.3m), £0.3m (2025: £0.6m) was included in trade payables as unpaid invoices at the year-end resulting in a net decrease of £256,000 (2025: net increase of £943,000) in trade payables in comparison to the prior year. Consequently, the consolidated statement of cash flows discloses a figure of £7.0m (2025: £8.3m) as the cash outflow in respect of property, plant and equipment additions in the year.
8. Borrowings
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Non-current: |
|
|
|
Bank loans- Capital |
(97,500) |
(97,000) |
|
Total borrowings |
(97,500) |
(97,000) |
The carrying amount of borrowings approximates to their fair value.
At the start of the year there was £97m (2025: £40m) outstanding on the revolving credit facility and drawdowns of £0.5m (2025: £57.0m) were made from the facility during the year. Repayments totalling £nil (2025: £nil) were made in the year resulting in a balance outstanding at the end of the year of £97.5m (2025: £97m).
At the year end, the Group had access to a £115m revolving credit facility that matures on 30 June 2027. The revolving credit facility had a borrowing cost at the Group's current leverage levels of 3.0% (2025: 2.5%) margin over SONIA. The revolving credit facility incurs a non-utilisation fee of 35% of the bank margin. The effective interest rate for the revolving credit facility in the current year was 7.14% (2025: 7.29%).
Given the terms of the revolving credit facility and the ability for any drawdowns made to be extended beyond 31 March 2027 at the discretion of the Group, the total amount outstanding has been classified as non-current.
The future obligations under the revolving credit facility are repayable as follows:
|
|
2026 |
2025 |
||||
|
|
Capital |
Interest |
Total |
Capital |
Interest* |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Due within one year |
- |
(6,094) |
(6,094) |
- |
(6,693) |
(6,693) |
|
Due within two to five years |
(97,500) |
(1,519) |
(99,019) |
(97,000) |
(1,669) |
(98,669) |
|
|
(97,500) |
(7,613) |
(105,113) |
(97,000) |
(8,362) |
(105,362) |
*Prior year interest has been re-presented to reflect interest payable over the remaining term of the RCF to 30 June 2026, the facility's maturity date prior to the refinancing which completed after the year end, to better reflect the position as at 31 March 2025.
As noted within Note 24 the revolving credit facility ('RCF') was amended and extended on 5 June 2026 taking the revised expiry date to 30 June 2028. The RCF provides the Group with additional liquidity which will be used for general business purposes and to fund investments, in accordance with the Group's three-year strategic plan. The Directors are of the opinion that the Group can operate within the facility and comply with its bank covenants.
|
|
Cash and |
Bank |
IFRS 16 |
Total Net Cash/(Debt) |
|
|
Analysis of change in net debt |
£000 |
£000 |
£000 |
£000 |
|
|
At 1 April 2024 |
15,755 |
(40,000) |
(18,091) |
(42,336) |
|
|
Acquired on acquisition of subsidiary |
3,403 |
(6,244) |
- |
(2,841) |
|
|
Repayment of debt acquired on acquisition |
- |
6,244 |
- |
6,244 |
|
|
Additions to lease liabilities |
- |
- |
(3,336) |
(3,336) |
|
|
New bank loans |
- |
(57,000) |
- |
(57,000) |
|
|
Bank loan interest charged |
- |
(4,968) |
- |
(4,968) |
|
|
Bank loan interest paid |
- |
4,968 |
- |
4,968 |
|
|
Lease interest accretion |
- |
- |
(928) |
(928) |
|
|
Lease interest paid |
- |
- |
928 |
928 |
|
|
Currency translation |
- |
- |
(3) |
(3) |
|
|
Cash and cash equivalents cash outflow |
(6,070) |
- |
- |
(6,070) |
|
|
Lease payments capital payments |
- |
- |
3,424 |
4,352 |
|
|
At 1 April 2025 |
13,088 |
(97,000) |
(18,006) |
(101,918) |
|
|
Drawdown of bank loan |
- |
(500) |
- |
(500) |
|
|
Cash and cash equivalents cash outflow |
(4,167) |
- |
- |
(4,167) |
|
|
Additions to lease liabilities |
- |
- |
(5,262) |
(5,262) |
|
|
Disposal to lease liabilities |
- |
- |
446 |
446 |
|
|
Bank loan interest charged |
- |
(6,733) |
- |
(6,733) |
|
|
Bank loan interest paid |
- |
6,733 |
- |
6,733 |
|
|
Lease interest accretion |
- |
- |
(1,429) |
(1,429) |
|
|
Lease interest paid |
- |
- |
1,429 |
1,429 |
|
|
Currency translation |
- |
- |
8 |
8 |
|
|
Lease payments |
- |
- |
2,772 |
2,772 |
|
|
At 31 March 2026 |
8,921 |
(97,500) |
(20,042) |
(108,621) |
|
9. Lease liabilities
The Group leases a range of assets, including buildings, colocation arrangements, datacentre equipment, fibre and vehicles. Details of leases where the Group is the lessee are presented below:
Lease liabilities
The maturity analysis of undiscounted lease liabilities is shown in the table below:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Lease liabilities (current) |
(3,860) |
(2,874) |
|
Lease liabilities (non-current) |
(16,182) |
(15,132) |
|
Total lease liabilities |
(20,042) |
(18,006) |
The maturity analysis of undiscounted lease liabilities is shown in the table below:
|
|
2026 |
2025 |
|
Amounts payable under leases: |
£'000 |
£'000 |
|
Within one year |
(4,848) |
(3,699) |
|
Between two to five years |
(11,125) |
(10,416) |
|
After more than five years |
(8,214) |
(7,389) |
|
|
|
|
|
Less: effect of discounting |
4,145 |
3,498 |
|
Total lease liabilities |
(20,042) |
(18,006) |
Amounts recognised in the Income statement and statement of comprehensive income in relation to leases is shown below:
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Interest on lease liabilities |
(1,429) |
(928) |
|
Depreciation and amortisation |
(3,675) |
(3,894) |
|
Short-term and low value lease expenses |
(2,226) |
(1,830) |
|
|
(7,330) |
(6,652) |
Amounts recognised in the consolidated statement of cash flows:
|
|
2026 |
2025 |
|
Amounts payable under Leases: |
£'000 |
£'000 |
|
Payments under lease liabilities |
(4,208) |
(4,352) |
|
Short-term and low value lease expenses |
(2,226) |
(1,830) |
|
|
(6,434) |
(6,182) |
10. Post balance sheet events
10.1 Refinancing
On 5 June 2026, the Revolving Credit Facility ("RCF"), totaling £115 m, was amended and extended to an expiry date of 30 June 2028. This remains with the existing bank syndicate comprising The Royal Bank of Scotland plc, HSBC UK Bank plc, and Nationwide Building Society (trading as Virgin Money). The facility includes financial covenants, limited to debt cover and interest cover, which are aligned with the Group's current leverage position and strategic objectives.
At current leverage levels, the bank margin under the new RCF is 3.5% above SONIA. The RCF includes a margin ratchet mechanism under which the applicable margin will decrease as the Group's leverage ratio improves, and increase should leverage deteriorate, within the ranges specified in the facility agreement.
Supplementary information
S.1 Alternative performance measures
Alternative performance measures
The Group uses the following alternative performance measures (APMs) to supplement the IFRS financial statements. These measures are not defined under IFRS and are therefore non-GAAP measures. They should not be read in isolation from, or as a substitute for, the Group's IFRS financial information, and may not be directly comparable with similarly labelled measures used by other companies.
The Board and management use these APMs to assess the underlying performance of the business, set targets, and make resource allocation decisions. The APMs are also used in external communications to shareholders and analysts. Each APM is defined below.
Adjusted EBITDA
Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortisation (EBITDA), adjusted to exclude share-based payment charges, acquisition-related costs, gains or losses on the revaluation of contingent consideration, foreign exchange gains and losses on FX forward contracts and the associated foreign exchange movements on related liabilities, and other material non-recurring items.
The Group considers adjusted EBITDA to be a useful measure of operating performance because it approximates the underlying operating cash flow by eliminating the charges mentioned above. It is not a direct measure of liquidity, which is shown in the consolidated statement of cash flows and needs to be considered in the context of the Group's financial commitments.
Adjusted EBIT
Adjusted EBIT is defined as Adjusted EBITDA less depreciation of property, plant and equipment and amortisation of internally generated and other non-acquired intangible assets. It excludes amortisation of acquired intangible assets, which management considers to be a non-cash charge arising from acquisition accounting rather than reflective of underlying trading performance.
Adjusted EBITDA margin %
Adjusted EBITDA margin % is defined as Adjusted EBITDA divided by total revenue, expressed as a percentage. The Group considers this measure useful in assessing the efficiency of the business in converting revenue to underlying operating earnings, and in comparing performance across periods and against peers.
Adjusted EBIT margin %
Adjusted EBIT margin % is defined as Adjusted EBIT divided by total revenue, expressed as a percentage.
Net debt / Adjusted EBITDA
Net debt / Adjusted EBITDA is defined as net debt (being total borrowings including lease liabilities, less cash and cash equivalents) divided by Adjusted EBITDA for the last twelve months. The Group uses this ratio to monitor financial leverage and assess compliance headroom against banking covenant thresholds. A reconciliation of net debt is provided in Note 16.
Cash flow from operations / Adjusted EBITDA conversion ratio
Cash flow from operations / Adjusted EBITDA conversion ratio is defined as cash generated from operations (before exceptional items) divided by Adjusted EBITDA, expressed as a percentage. The Group considers this measure useful in assessing the quality of earnings and the efficiency with which Adjusted EBITDA is converted into cash.
Recurring revenue
Recurring revenue represents contracted or repeat service revenues where there is a reasonable expectation of continuation, including contracted monthly and annual service fees, domain renewals and managed service retainers. Non-recurring revenue includes hardware resale, one-off project and implementation fees, and professional services engagements not expected to repeat on a regular basis. Where contracts contain both recurring and non-recurring elements, revenue is allocated between categories based on the nature of each performance obligation. The Group considers this disaggregation meaningful as recurring revenue provides greater visibility of future cash flows and is a key indicator of the quality and sustainability of the revenue base.
Recurring revenue %
Recurring revenue % is defined as recurring revenue divided by total revenue, expressed as a percentage.
Adjusted profit/(Loss) before tax
Adjusted profit before tax is presented by the Group as an alternative performance measure to provide additional insight into underlying trading performance. It excludes items that management considers to be non-recurring, acquisition-related or non-operational in nature.
Adjustments comprise:
· amortisation of acquired intangible assets;
· share-based payment charges;
· accelerated write-off of arrangement fees arising from refinancing activities;
· acquisition and integration-related costs, including professional fees and non-recurring integration expenses;
· gains or losses on the revaluation of contingent consideration;
· interest on contingent consideration;
· foreign exchange gains and losses on FX forward contracts and the associated foreign exchange movements on related liabilities; and
· other material non-recurring items where exclusion is considered necessary to aid understanding of the underlying performance.
The Group considers adjusted profit before tax to be a useful measure as it removes the impact of non-recurring and acquisition-related items, which are typically excluded by investors and analysts when assessing underlying performance.
Adjusted diluted earnings per share
Adjusted diluted earnings per share is calculated by adjusting profit before tax as described above, applying an appropriate tax charge, and dividing by the weighted average number of ordinary shares in issue during the year, adjusted for the dilutive effect of share options.
The Group considers this measure to be useful for the same reasons as adjusted profit before tax. It is also used as a reference point when considering dividend distributions.
S1.1 Reconciliation of Adjusted EBITDA to IFRS loss before tax
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
Adjusted EBITDA |
25,561 |
34,312 |
|
Depreciation |
(13,409) |
(14,730) |
|
Amortisation other intangibles |
(6,986) |
(6,757) |
|
Total adjusted EBIT |
5,166 |
12,825 |
|
Net bank & Other interest |
(7,752) |
(5,442) |
|
Finance lease interest |
(1,429) |
(928) |
|
Adjusted (loss)/profit before tax |
(4,015) |
6,455 |
|
Amortisation of acquired intangible assets |
(6,950) |
(4,902) |
|
Acquisition costs |
(480) |
(1,674) |
|
Share based payments |
36 |
(198) |
|
Administrative expenses - exceptional non-recurring costs |
(2,229) |
- |
|
Goodwill impairment |
- |
(52,900) |
|
IFRS (loss)/profit before tax |
(13,638) |
(53,219) |
S1.2 Reconciliation of net debt
|
|
|
2026 |
2025 |
|
|
£'000 |
£'000 |
|
|
Bank revolver loan |
|
97,500 |
97,000 |
|
Lease liabilities |
|
20,042 |
18,006 |
|
Less: cash and cash equivalents |
(8,921) |
(13,088) |
|
|
Net debt |
|
108,621 |
101,918 |
|
Net debt / Adjusted EBITDA |
4.3x |
2.7x |
|
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