Final Results
Summary by AI BETAClose X
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the ‘UK MAR’) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
28 September 2026
Redcentric plc
(‘Redcentric’, the ‘Company’ or the ‘Group’)
Final Results
Redcentric plc (AIM: RCN), a leading UK IT Managed Services Provider (MSP), is pleased to announce its final audited results for the year ended 31 March 2026 (‘FY26’ or the ‘year’). The 2026 Annual Report and Accounts will be made available on the Company's website https://www.redcentricplc.com/investors/financial-reports/ and will be posted to shareholders in due course.
Highlights
During the reporting period
- Business performed in line with market expectations:
Reported revenue of £132.0m (FY25: £135.1m);
Adjusted EBITDA of £17.4m (FY25: £18.8m);
Adjusted EBITDA margin slightly reduced at 13.2% (FY25: 13.9%); and
Reported operating profit of £8.1m (FY25: £8.4m).
- Annual Recurring Revenue (‘ARR’) robust at £116.2m (FY25: £118.7m); and
- Underlying ARR marginal increase of 0.6% to £113.2m (FY25: £112.5m).
After the reporting period
- Completed the sale of Redcentric Data Centres Limited (‘RDC’) on 30 April 2026 for total consideration of £124.9m;
- Tender Offer completed with £90m cash being returned to shareholders;
- On 28 August 2026, the Group agreed new banking facilities comprising a £30m RCF facility with a £10m Accordion facility with NatWest Bank and Barclays Bank on an initial three-year term;
- Adjusted net debt as at 25 September 2026 was £2.8m (31 March 2026: £36.8m);
- Share buy-back programme of up to £1.5m approved on 11 August 2026. At 25 September 2026, 1,140,937 Ordinary Shares have been purchased through this programme;
- Appointed Tim Sykes as CFO in June 2026 following the conclusion of Tony Ratcliffe’s fixed term contract; and
- Completed first deal with Syntura involving the provision of a fully managed service solution for Syntura’s Broadcom requirements that enables Syntura to continue to serve their customers utilising VMware technologies until 31 March 2033.
Outlook
- Enhanced go to market strategy established with the pipeline building across the Group’s core product areas;
- Further simplification of the Group's technology platforms to improve customer service and efficiency;
- AI roadmap developing, supporting both customer solutions and further operational efficiencies;
- The Board will maintain a continued focus on tangible shareholder returns, including a reinstated progressive dividend and opportunistic buy-backs where appropriate;
- Following the sale of RDC, Redcentric is a purely focused Managed Services Provider (‘MSP’) business and the Board believes the Group has the right focus and balance sheet to deliver on its strategy and to deliver compelling client service and tangible shareholder value; and
- Trading since the year end has been in line with internal plans. The business has an encouraging pipeline and adjusted EBITDA is expected to be in line with current market expectations.
Financial Highlights
Unless otherwise indicated, the following results are based on the continuing operations of the Group. Percentage changes are calculated on absolute values:
|
|
Year ended 31 March 2026 (‘FY26’) |
Year ended 31 March 2025 (‘FY25’) |
Change |
|
|
|
|
|
|
Total revenue |
£132.0m |
£135.1m |
-2.3% |
|
Recurring revenue1 |
£118.1m |
£120.7m |
-2.1% |
|
Recurring revenue percentage1 |
89.5% |
89.3% |
+0.2ppts |
|
|
|
|
|
|
Annual Recurring Revenue (“ARR”)2 |
£116.2m |
£118.7m |
-2.1% |
|
Underlying ARR2 |
£113.2m |
£112.5m |
+0.6% |
|
|
|
|
|
|
Gross profit |
£80.5m |
£83.3m |
-3.3% |
|
Gross margin |
61.0% |
61.6% |
-0.6ppts |
|
|
|
|
|
|
Adjusted EBITDA3 |
£17.4m |
£18.8m |
-7.4% |
|
Adjusted EBITDA3 margin |
13.2% |
13.9% |
-0.7ppts |
|
|
|
|
|
|
Reported operating profit |
£8.1m |
£8.4m |
-3.9% |
|
Reported profit before tax |
£4.8m |
£4.4m |
+10.5% |
|
|
|
|
|
|
Group Net debt |
(£71.7m) |
(£65.5m) |
-9.5% |
|
Group Adjusted net debt4 |
(£36.8m) |
(£41.9m) |
+12.2% |
|
|
|
|
|
|
Adjusted basic earnings per share5 |
3.30p |
3.82p |
-13.7% |
|
Reported basic earnings per share |
1.99p |
1.70 |
17.1% |
These results contain certain financial measures that are not defined or recognised under IFRS but are presented to provide readers with additional financial information that is evaluated by management and investors in assessing the performance of the Group.
This additional information presented is not uniformly defined by all companies and may not be comparable with similarly titled measures and disclosures from other companies. These measures are unaudited and should not be viewed in isolation or as an alternative to those measures that are derived in accordance with IFRS.
A full explanation of the alternative performance measures used is available in the Appendix and more fully in the Annual Report. In summary:
1 Recurring revenue comprises revenue recognised in each financial year from customers contracted or by predictable customer habit at the time of recognition;
2 ARR is the amount of recurring revenue that the business has contracted with customers or by predictable customer habit at the year end and Underlying ARR is ARR adjusted for certain items as described within the Chief Financial Officer’s Review;
3 Adjusted EBITDA comprises earnings before interest, tax, depreciation and amortisation (“EBITDA”) further adjusted for exceptional items and share-based payments, including National Insurance;
4 Adjusted net debt comprises reported net debt (borrowings net of cash) but excluding any supplier loans or lease liabilities that would have been classified as operating leases under IAS 17 and is a measure reviewed by the Group’s banking syndicate as part of covenant compliance; and
5 Adjusted basic earnings per share comprises earnings before interest, tax, depreciation and amortisation, exceptional items and share-based payments to which a notional tax charge of 25% is applied.
Financial Highlights – Total Operations
(Combined MSP business unit and the Data Centre (‘DC’) business unit that is recognised as discontinued under IFRS 5)
- Total revenue for the Group was £165.0m (FY25: £169.9m);
- Recurring revenue for FY26 was £150.6m (FY25: £155.0m);
- Recurring revenue percentage of 91.3% (FY25: 91.2%); and
- Adjusted EBITDA was £32.0m (FY25: £35.4m).
Commenting on the results, Michelle Senecal de Fonseca, CEO of Redcentric, said: “Following the disposal of RDC, Redcentric is fully focused on growing its MSP business. We have refined our go-to-market strategy and established a new business team to help realise our market opportunity.
“The factors weighing on reported revenue and historical ARR are easing. Underlying ARR increased marginally in FY26, and we expect this to build through FY27 to deliver stable reported revenue for the year against FY26. While complex solutions typically involve long lead times and sales cycles, our lead-generation efforts are beginning to build our pipeline of opportunities, and market dynamics are expected to support near-term demand.
“Our cost base is now right-sized to current revenue, and margins should improve in FY27 as the full-year impact of in-year savings comes through. Better use of our ERP system, continued solution-stack rationalisation and AI should drive further margin improvement, with adjusted EBITDA expected to be in line with current market expectations.
“Our financial position is strong, supported by our new banking facilities. As revenue stabilises, growth becomes sustainable, profitability improves and free cash flow becomes more predictable, the Board remains committed to further shareholder returns.
“Current FY27 trading in the continuing MSP business is in line with plan, with the balance sheet strengthened and the Group focused solely on growth and tangible investor returns. Despite a challenging MSP sector, we are confident in our product suite, our market position and our people, ensuring the foundations for growth and shareholder value creation are in place.”
For further information:
|
Redcentric plc Michelle Senecal de Fonseca, CEO Tim Sykes, CFO |
via Burson Buchanan |
|
Cavendish Capital Markets Limited - Nomad and Broker Marc Milmo / Callum Davidson (Corporate Finance) Andrew Burdis / Sunila de Silva (ECM) |
Tel: +44 (0) 20 7220 0500 |
For media enquiries:
|
Burson Buchanan – Financial Communications Henry Harrison-Topham / Jamie Hooper / Toto Berger |
Tel: +44 (0) 20 7466 5000 |
Notes to Editors:
Redcentric has a strong track record in delivering IT managed services provision that empowers businesses to scale, innovate and grow in a rapidly evolving digital landscape. As technology continues to advance the Company's goal is to be the go-to-all-in-one infrastructure and managed IT service provider for customers of all sizes offering an unmatched range of products and solutions.
Redcentric serves the private and public sectors with all their IT requirements acting as an outsourced IT department, handling day-to-day maintenance and security of customers' IT infrastructures. This allows customers to improve security and efficiency and focus on growing their core businesses.
From infrastructure management and cloud services to cybersecurity and data analytics, Redcentric has a comprehensive suite of solutions designed to meet the diverse needs of modern businesses.
For additional information please visit www.redcentricplc.com
Chairman’s Statement
I am pleased to introduce the Final Results for Redcentric plc (the ‘Company’) and its subsidiaries (the “Group”) for the financial year ended 31 March 2026 (‘FY26’).
Overview
FY26 was the year in which the strategic realignment outlined in last year’s Annual Report was substantially completed. The separation and post year end sale of the RDC has simplified our corporate structure, leaving the Group as a focused, pure play MSP, with a significantly strengthened balance sheet.
The sale to Stellanor Datacenters Group Limited (backed by DWS) completed in April 2026 with the final balancing payment of £9.5m received on 16 September 2026 following agreement of the completion accounts, meaning a total cash consideration of £124.9m was received. The transaction crystallised significant value from an asset the Board had built both organically and by acquisition while enabling the Board to honour last year’s commitment to deliver a material return of capital to shareholders.
As at 31 March 2026, the DC business was classified as held for sale and is presented as a discontinued operation under IFRS 5. Based on the net asset carrying value at year end of £53.5m, the Group expects to report a profit on disposal in FY27.
Capital returns and balance sheet
Our immediate priority following the disposal was returning surplus cash to shareholders while maintaining a resilient balance sheet to support our MSP growth strategy. After transaction costs, net proceeds were applied to reduce debt, fund Group working capital and execute a substantial capital return.
On 28 August 2026 the Group agreed new long-term bank facilities on terms the Board considers appropriate for our focused operating model. The new banking facilities comprise a £30m RCF facility with a £10m Accordian facility. Adjusted net debt at 31 March 2026 was £36.8m. Following the post-year end cash inflow from the sale of the DC business, the repayment of an element of the Group’s indebtedness and the funding of the tender offer, adjusted net debt has been substantially reduced to £2.8m at 25 September 2026. Detail is set out in the Chief Financial Officer’s Review.
In July 2026, the Company completed a tender offer at 160 pence per share, returning £90m and acquiring 56.25m shares, 35.3% of the issued share capital at that time. A concurrent share capital restructure simplified a fragmented shareholder register while an on-market share buy-back of up to £1.5m was approved.
The ordinary dividend was suspended in FY25 pending completion of the RDC disposal. Following completion of that transaction and the associated capital return, the Board’s has reviewed the Group’s capital allocation framework. Future decisions will balance shareholder returns with investment in core the business and the maintenance of appropriate net cash/debt position under the Group’s new facilities.
The Board intends to reinstate a progressive dividend policy. Subject to trading performance of the Group’s financial position at the time, the first interim dividend is expected to be declared with the announcement of the Interim results for the six months ending 30 September 2026.
In addition, the Board will continue to consider opportunistic buy-backs where it believes this to be an attractive use of capital, having regard to market conditions, available liquidity and the Group’s other capital requirements. The current buy-back programme of up to £1.5m, approved on 11 August 2026, will be reviewed on completion.
Focus on the MSP business
The continuing business traded throughout FY26 in a competitive market characterised by cost-conscious customers and pressure at renewal particularly across the public sector. Reported revenue was £132.0m (FY25: £135.1m) with recurring revenue resilient at 89.5% of total revenue (FY25: 89.3%).
Underlying ARR closed at £113.2m (FY25: £112.5m), an increase of 0.6%. While the growth was modest, this ARR metric highlights the underlying stability relative to headline reported revenue. Adjusted EBITDA of £17.4m (FY25: £18.8m) was in line with market expectations, at a margin of 13.2% (FY25: 13.9%), reflecting a stronger second half and continued cost discipline following prior year platform rationalisations. Inflation in staff and bought-in costs limited margin progress in the year, but efficiency actions already completed are expected to deliver fuller benefits in FY27. Adjusted EBITDA is reported after the costs of the Company’s listing of approximately £0.7m (FY25: £0.6m). The Group’s statutory EBITDA was £16.2m (FY25: £16.6m).
Our market position remains compelling: The Group’s MSP offering occupies an attractive mid-market position with expertise and scale enough to serve complex, regulated and public-sector clients. The Group’s offering is focused enough to sit between the global operators and smaller independents. Management’s focus is now entirely on the MSP business with a strategy built on deepening customer relationships, protecting renewals, growing higher-quality recurring revenue across Cloud, Connectivity and Communications, and driving cash generation. Remaining duplicate platforms alongside stranded costs from the DC separation are being eliminated.
Board, governance and people
Michelle Senecal de Fonseca has completed a first full year as Chief Executive, having joined the Board as a Non-Executive Director in February 2024 and taken the executive role in May 2025. Tony Ratcliffe served as Chief Financial Officer on a fixed-term contract from August 2025, successfully helping to deliver the RDC disposal before Tim Sykes joined as CFO post period end in June 2026. Peter Brotherton remained an Executive Director until May 2025 to support the transition subsequently acting as a strategic adviser through the disposal process. I would like to thank Peter and Tony for their dedication and contribution in a demanding and transformational year.
Outlook
The Group is now a dedicated UK Managed Services company, with high recurring revenue, a strong balance sheet, low working capital requirements and a focused strategy with an encouraging pipeline. Near-term priorities are growth in the core product set, further improvement in the quality of earnings, cash conversion and consistent application of the capital allocation framework. The distraction of running two businesses is behind us and we look forward to executing the MSP opportunity.
Recurring profitability remains the core of the strategy, the cost base is aligned to current revenue, and the Group’s cash position after the disposal continues to support both business investment as well as the Board’s commitment to further shareholder returns.
Trading since the year end has been in line with internal plans. Reported revenue in FY27 is expected to be stable against FY26, however, with the savings and efficiencies made across the Group, Adjusted EBITDA for FY27 is expected to be in line with current market expectations.
Maintaining client service continuity throughout the separation was a top priority, and transfers completed smoothly. I thank our MSP team for delivering on this while executing a complex carve-out, and our DC colleagues who transferred to Stellanor. My thanks also go to our customers for their ongoing loyalty and to our shareholders for their continued support.
Richard McGuire
Non-Executive Chairman
Chief Executive Officer’s Review
Introduction
The strategic decision to divest RDC and establish the Group as a pure play MSP has been transformational for the Group.
Executing the divestment was highly complex, requiring substantial operational resources to prepare RDC for standalone operation and ensure a seamless handover to its new owners. We continue to provide contracted transitional services (running up to 30 April 2027) with both parties aligned to shortening this handover window wherever practical.
The separation has confirmed that the MSP business is well positioned to realise an exciting growth opportunity which can deliver significant shareholder value.
The IT Managed Services market
UK customer demand for managing IT infrastructure, cybersecurity and end-user systems is well established.
The market is highly fragmented, including global telecom operators, system integrators, hardware and software providers and local independent providers. Structurally it is divided into a handful of large global players, a lot of smaller operators and a select group of mid-tier providers including Redcentric.
With that market landscape, Redcentric has a market leading position in the UK public sector, notably in NHS trusts, as well as commercial sectors and enjoys a high-quality diverse customer base.
The Board believes that Redcentric’ s market position is a competitive advantage. Furthermore, it believes the Group has the requisite scale to provide an attractive offering that is also nimble enough to offer the high levels of service and engagement that differentiate it, particularly from larger players. The Group does not suffer from many of the challenges that its smaller competitors face, such as the lack of a delivery structure, reputation, reliability and financial strength.
The Group’s AIM listing is another competitive advantage providing clients with full financial transparency and governance assurance. Additionally following the sale of RDC, our deleveraged balance sheet and low gearing establish Redcentric as a secure, long-term counterparty for enterprise and public-sector procurement.
Strategy and business model
The Group provides a broad range of IT Managed Services across its three core specialist areas of Cloud, Connectivity and Communications. Each of these areas has a dedicated focus with technologically advanced infrastructure and appropriately skilled resources. Historically, the Group has built its offering both organically and through M&A and is now focused on optimising this offering and driving organic growth, without fully discounting opportunistic corporate activity.
The Group is well positioned in the market to combine the benefits of proprietary networks with a flexible and technically skilled workforce capable of delivering and supporting critical services and solutions in an exceptionally secure environment.
The Group seeks to differentiate itself in three distinct ways:
- Innovation - in the design and delivery of services;
- Reliability - the right technical skills, organised in the right way, to give predictable high-quality results; and
- Value - service offerings designed to offer value for money to mid-market customers.
The Group has a well-established account management team, complemented where appropriate by strategic partners, working to deepen and broaden the Group’s relationships with existing customers. Since taking the CEO role, I have reallocated expenditure toward greater investment in our go-to-market capability to drive new customer acquisition. That capability is now maturing and I expect to see the benefits come through in the latter part of FY27 and beyond, making customer acquisition KPIs increasingly important as we move forward.
Broadcom’s restructuring of its partnership and licence models has created a window of opportunity in the market which I believe the Group is well positioned to take advantage of. The Group’s renewed position as one of only seven Pinnacle Partners for Broadcom’s VCSP programme in the UK is testament to the depth of expertise and experience we hold in the business. Not just in the development and management of VMware environments, but also in navigating the shifting role of Private Cloud as part of organisation’s cloud strategies.
Coupled with many businesses taking a fresh view of sovereignty in their technology stack, and the role of AI within it, the Group is well positioned to provide solutions that address a rapidly evolving market. With momentum continuing to build in both the channel and with end users, we continue to see this as a significant growth driver.
The Group’s high proportion of recurring revenue, approximately 89.5% for FY26, consistent year-on-year, is a highly attractive facet of its business model. Our focus is to maintain this element of the model. Because recurring revenue relates to the classification of that revenue at the time of recognition during the year, we have also introduced ARR as a key indicator of the Group’s recurring revenue at the year end in this report, and I am pleased to report that our Underlying ARR increased 0.6% in FY26.
As we move into FY27 and beyond, the negative factors that have required adjustments between reported ARR to Underlying ARR for FY25 and FY26 will subside making the measure more transparent over time. I expect to see year-on-year Underlying ARR growth into FY27 and beyond, with momentum building in the second half. That said, it is essential that the Group continues to deepen its customer relationships through complementary non-recurring services which will remain a core feature of our offering.
Our core markets are the UK public sector along with commercial and large enterprise scale customers, with a significant amount of business secured through bid or tender processes. Contracts are typically multi-year. There is a natural cycle when contracts approach renewal and the Group generally seeks to renew on broadly similar terms. Despite customer loyalty, the Group typically faces pressure to reduce cost to the customer at renewal or to consider newer or more competitive offerings.
To address this, the Group remains committed to staying at the technological forefront of the market, continually refreshing its offering to meet the advancing needs of its customers. The Group has a strong and reliable infrastructure and has developed a delivery model that provides assurance and certainty for customers.
Given the complexities of carving out and selling RDC, our immediate focus is on an organic growth strategy. That being said, the Board retains its opportunistic approach to M&A where targets meet strict criteria including being strategically relevant, financially accretive, contributing to Group scale, expanding or enhancing infrastructure to deliver greater levels of security and service, bringing new technologies to benefit from innovation or offering cross-selling opportunities.
Customer successes
FY26 saw the Group continue to grow existing customer relationships while expanding its footprint in key verticals with new logo wins.
The Group continues to build new relationships and support vital work across the NHS and its partners. One notable win involved taking on the delivery and management of connectivity and voice solutions to support mental health and community services for an NHS Foundation Trust. This multi-year contract reflects the trust NHS organisations put in our experience and understanding of the unique dynamics and role that infrastructure plays in delivering patient care, whilst supporting the NHS strategy of shifting care provision into the community.
Another vital link in that shift to community focused care is with our community pharmacy customers. A long-standing customer, and one of the UK’s largest community pharmacy chains has committed to a five-year network renewal and upgrade programme across 640 locations. Part of a nationwide digital transformation programme, this will see sites benefit from best-in-class network security and resilience, supporting future ready services across the UK.
Our customers continue to evolve their technology strategies in a fast-paced landscape, and we remain focused on partnership models that adapt and evolve alongside them. This includes working with a growing SaaS organisation on their cloud transformation, migrating them from IaaS to a fully managed Azure environment designed to enable the organisation’s ambitious global expansion plans.
Operations
As the separation from RDC commenced, the Group also initiated a restructure of its own operations. The primary objectives were to enhance customer focus, strengthen functional specialism and eliminate duplicated activities. We achieved this by moving from Cloud, Connectivity and Communications lines of business to a single functional operating structure.
In the second half of FY26, we undertook a comprehensive review of the Group’s business processes, including its ERP system. This analysis focused on identifying opportunities to improve customer experience while achieving substantial efficiency and cost gains. This has yielded operational improvements that will be realised throughout FY27 and beyond, supporting margin expansion.
Product categories
Cloud
As a result of historic acquisitions, the Group accumulated numerous cloud platforms and services, which were complementary but contained elements of duplication. The Group continues to rationalise these platforms through its standard platform life cycle management process while managing customer requirements.
The Group’s capabilities, specifically within data storage/backup and recovery services have been optimised, simplifying go-to-market propositions while reducing operational complexity. As a result, the Group’s offering is strongly suited to current and growing market demands in these areas.
Investment in the year focused on the Group’s market leading Sovereign Private Cloud platform, which is designed to deliver a highly secure and compliant private cloud for government, public sector and wider regulated organisations, with platform enhancements, service improvements and operational oversight completed to provide a strong basis for continuing growth in platform usage, particularly at a time of growing sovereign platform dependency.
Connectivity
The Group successfully removed a significant amount of legacy network configuration from historic acquisitions and development work was completed to onboard the remainder of the Group’s key circuit supply chain.
Artificial Intelligence (‘AI’)
While customer adoption of AI is still at a relatively early stage, the Group is moving quickly. AI represents a key strategic opportunity, supporting both the evolution of customer-facing services and operational transformation.
During the year, investment focused on improving service quality, responsiveness and efficiency through the adoption of AI-enabled tools, automation and analytics across service operations, customer engagement and business processes. Programmes such as OCT, Aviator, OSS AI and a Bid Opportunity Viability Agent are building the foundations for improved service consistency and stronger customer outcomes with measurable productivity gains.
From a product perspective, we expect to deliver a growing portfolio of internally developed and partner facilitated AI-enabled solutions and managed services that enhance value for our customers. Investment is focused on Private AI-ready infrastructure, managed Microsoft Copilot services, AI governance and security capabilities, and intelligent automation services that help organisations improve productivity and accelerate decision-making. These capabilities are designed to help customers adopt AI securely and at scale, accelerate digital transformation, enhance employee and customer experiences, and realise measurable business outcomes from their technology investments.
Over the next 12 months, our focus will shift from targeted deployments to broader operational integration, embedding AI capabilities across service management, platform operations, security, sales and support functions. Alongside this, investment is being made in product management, architecture and engineering capabilities to ensure AI considerations are embedded into product strategy, platform design and service development from inception. The Group’s DevOps function is also being re-oriented towards AI-centric practices, leveraging automation, intelligent observability and AI-assisted development to accelerate delivery while improving reliability and scalability.
In addition, the Group is developing AI-driven data management and enrichment processes to enhance the granularity of its profitability and productivity performance, driving faster and better decision-making.
Summary financial results
More detailed financial data is summarised in the Chief Financial Officer’s Report with fuller detail in the Financial Statements.
Reported revenue for the Group was £132.0m (FY25: £135.1m) which included a £0.6m reduction in non-recurring revenue due to an expected reduction in services to our NHS customers following relatively high levels of spend in recent years. Recurring revenue fell by £2.5m.
The Board considers that this reduction was driven largely by customer churn inherited from the historic acquisitions of Sungard, Piksel and 4D. At the time that these businesses were acquired, the Board was aware that certain of the customers had already made irreversible arrangements to move to alternative providers, given the inherent uncertainty of continued supply from the acquired companies, specifically Sungard, which was in administration at the time of the acquisition. This feature of the historic M&A strategy creates a ‘drag’ on growth in reported revenue and ARR and this drag can continue for several years because new systems can take many years to build. The process of exit is still ongoing into FY27 but is not expected to continue beyond then.
In addition, there has been a short-term impact of the reaction in the market to the Broadcom acquisition of VMware where short-term ‘on-demand’ licences produced short-term growth in FY25 but this has reversed in FY26. Further, the Group has strategically exited a specific loss-making contract which has reduced revenue but is earnings enhancing.
The Group has introduced ARR as a key performance indicator. To reflect the Group's true operational trajectory, headline ARR has been adjusted for the legacy factors outlined above.
Underlying ARR at 31 March 2026 was approximately £113.2m which was marginally ahead of £112.5m at 31 March 2025. I am encouraged by this positive movement which demonstrates that the underlying business is turning towards growth as legacy headwinds subside and our go-to-market strategy gains momentum.
I am particularly pleased with the Group’s levels of profitability with adjusted EBITDA of £17.4m (FY25: £18.8m), with margin decreasing only slightly to 13.2% (FY25: 13.9%) as a result of inflationary cost increases in our cost of goods sold. The Group’s statutory EBITDA was £16.2m (FY25: £16.6m). We have controlled costs tightly against a backdrop of reducing revenue and also managed to adjust the focus of our spend toward our planned investments made during the second half of the year to support future growth initiatives, the benefits of which are expected to be realised from the second half of FY27 onwards.
Further, the full year effect of these cost savings will be experienced through FY27 where I expect to see enhanced margins come through.
Michelle Senecal de Fonseca
Chief Executive Officer
Chief Financial Officer’s Review
Overview
The results for the year are presented in a similar format to the prior year, with the separation of the continuing MSP business and the discontinued DC business. The sale of RDC completed on 30 April 2026 and thus the DC business unit was owned throughout FY26. Under IFRS 5, the financial reporting for this year primarily highlights the continuing operations, i.e. the continuing MSP business. The detail in the Statement of Comprehensive Income therefore shows the line-by-line results of the continuing MSP business, together with appropriate comparative data for the prior year to allow a meaningful comparison.
The financial results of the DC business have been summarised and included as a single line item in the Consolidated Statement of Comprehensive Income – ‘profit/loss after tax for the period from discontinued operations’.
At the balance sheet date only, the assets and liabilities of the DC business have been shown as two-line items on the Consolidated Statement of Financial Position – ‘assets held for sale’, shown within current assets, and ‘liabilities directly associated with the assets held for sale’, shown within current liabilities.
The financial review below covers the primary Financial Statements as presented and, unless otherwise stated, focuses on the continuing MSP business.
Revenue
Reported revenue for the continuing MSP business for the year was generated wholly from the UK and was £132.0m (FY25: £135.1m). Within reported revenue, recurring revenue comprises revenue recognised in each financial year from customers contracted or by predictable customer habit at the time of recognition but which may not be assessed in that way at the equivalent year end. The Board considers that this is a helpful measure as it highlights how much of the Group’s total revenue was earned through this source as compared to non-recurring revenue which is revenue recognised from the delivery of products or services in the period and is generally short-term. Reported revenue can be analysed below:
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
Change |
Change |
|
|
Continuing operations |
£’000 |
£’000 |
£’000 |
% |
|
|
Recurring revenue |
118,116 |
120,657 |
(2,541) |
-2.1% |
|
|
Non-recurring revenue |
13,869 |
14,481 |
(612) |
-4.2% |
|
|
Total revenue |
131,985 |
135,138 |
(3,153) |
-2.3% |
|
The recurring revenue represented 89.5% (FY25: 89.3%) of the total reported revenue for the year and recurring revenue reduced during the year due, principally, to the following key factors:
Loss of customers that were acquired with historic acquisitions, particularly Sungard;
The Group’s strategic shift away from low margin solutions;
Market dynamics associated with Broadcom’s acquisition of VMware and the short-term on-demand VMware licences emanating from that; and
Normal churn in the customer base driven by general usage, pricing negotiation and customer infrastructure factors which are beyond the control of the Group.
Non-recurring revenue dropped back to more normalised levels following the higher levels achieved through our services into the NHS during the previous two financial years.
Whilst the Board believes that recurring revenue is a relevant measure of performance, it also acknowledges that another supplementary measure can be more informative because recurring revenue is defined as such at the date that the revenue is recognised rather than by reference to the year end. Specifically, the Board considers that Annual Recurring Revenue (ARR), as defined below, is a key performance indicator.
Annual Recurring Revenue (Alternative Performance Measure)
A key indicator of the commercial performance, strength and progression of the business is the scale and trajectory of its ARR. ARR is the amount of (annualised) recurring revenue that the business has with customers at a point in time, specifically at the year end, and is reasonably expected to recur into future accounting periods. An analysis of the progression of the ARR of the Group from 31 March 2025 to 31 March 2026 is as follows:
|
|
As at 31 March 2026 |
As at 31 March 2025 |
Change |
|
|
Continuing operations |
£’000 |
£’000 |
£’000 |
|
|
Total ARR |
116,201 |
118,667 |
(2,466) |
|
|
ARR associated with: |
|
|
|
|
|
Customer losses from historic acquisitions |
(2,198) |
(3,001) |
803 |
|
|
Strategic shift away from low margin solutions |
(1) |
(1,302) |
1,301 |
|
|
On-demand VMware licences |
(802) |
(1,864) |
1,062 |
|
|
Underlying ARR |
113,200 |
112,500 |
700 |
|
The Board considers that the adjusting factors in the table above are unlikely to recur going forwards and, as a result, this analysis provides further insight into the current trajectory of the Group and its current momentum. It is encouraging that, when viewed from this perspective that the Group’s underlying ARR has grown, albeit modestly, over the period. The Group’s focus remains to drive further growth in ARR.
Gross profit
The MSP gross profit is summarised below:
|
Continuing operations |
Year ended 31 March 2026 £’000 |
Year ended 31 March 2025 £’000 |
Change £'000 |
Change
|
|
Gross profit |
80,526 |
83,281 |
(2,755) |
-3.3% |
|
Gross margin |
61.0% |
61.6% |
n/a |
-0.6ppts |
Whilst the Group has the benefit of index-linked annual price increases in many of its customer contracts, this has been more than offset by the inflationary cost price increases of staff costs and bought-in product and services directly associated with the delivery of its services that are included within the cost of goods sold.
Operating expenses
The MSP’s total operating costs were £72.5m, a decrease of 3.2% on the £74.9m in FY25. An analysis of the major components of the cost base is shown below:
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
Change |
|
Continuing operations |
£’000 |
£’000 |
£’000 |
|
Employment costs |
40,667 |
37,299 |
3,368 |
|
Office costs |
5,282 |
742 |
4,540 |
|
Network and equipment costs |
15,145 |
22,471 |
(7,326) |
|
Other administrative costs |
2,061 |
4,011 |
(1,950) |
|
Operating costs before depreciation, amortisation, share-based payment charges and National insurance and exceptional items |
63,155 |
64,523 |
(1,368) |
|
Operating costs before depreciation, amortisation, share-based payment charges and National insurance and exceptional items (expressed as a % of reported revenue |
47.9% |
47.7% |
n/a |
|
Depreciation of property, plant and equipment |
4,481 |
4,001 |
480 |
|
Amortisation of intangibles |
2,140 |
2,593 |
(453) |
|
Depreciation of right-of-use assets |
1,516 |
1,610 |
(94) |
|
Exceptional costs |
253 |
924 |
(671) |
|
Share-based payments and associated National Insurance |
916 |
1,235 |
(319) |
|
Total operating costs |
72,461 |
74,886 |
(2,425) |
|
Reported operating profit |
8,065 |
8,395 |
(330) |
|
Reported operating margin |
6.1% |
6.2% |
n/a |
* During the current year, the Group identified that £0.9m of employee benefit costs that should have been included in wages and salaries were not included in the prior year. As the impact on the comparative period was not material, comparative information has not been restated. The current year disclosure has been updated to include these costs and therefore is not directly comparable to the prior year presentation.
The Group has been successful in managing its operating expenditure down in line with the reducing revenue in order to preserve operating margins. In particular:
Employment costs have increased due to inflationary factors and a reclassification of certain employee benefit costs from administrative costs which has been partially offset by a reduction in headcount during the year;
Other administrative costs have reduced due to the above reclassification of certain employee benefit costs to employment costs;
Office costs have increased due to are-classification of costs that were previously classified within network and equipment costs and vice versa. The aggregate costs across these categories have reduced due to reducing volumes and cost savings made through the rationalisation of the Group’s product portfolio;
Depreciation of property plant and equipment has increased due to the high level of investment in the prior year;
Amortisation of intangibles has reduced due to certain customer relationship assets reaching the end of their useful economic lives;
Exceptional costs in the prior year included costs associated with an aborted acquisition and integration costs of a previous acquisition and there have been no similar costs incurred during the period; and
Share-based payment charges have reduced due to a senior employee leaving during the year which has resulted in the prior year charges in respect of options granted to them being credited to the income statement during the year.
EBITDA and Adjusted EBITDA (Alternative Performance Measures)
The Board’s key measure of underlying business profitability and assessing trends across periods is earnings before interest, tax, depreciation and amortisation (‘EBITDA’) further adjusted for exceptional items, share-based payments and associated National Insurance costs (‘Adjusted EBITDA’). Adjusted EBITDA for continuing operations for the year was £17.4m (FY25: £18.8m) whilst EBITDA for continuing operations was £14.6m (FY25: £16.6m).
The Board considers that this metric provides a useful measure of assessing the underlying trading performance of the continuing Group as it excludes items which may distort comparability between reporting periods, for example one-off exceptional costs, or amortisation of acquired intangibles arising from business combinations, which varies year-on-year dependent on the timing and size of any acquisitions, and obscure the visibility of the underlying trading performance of the business. Adjusted EBITDA also helps to more easily assess the business’ ability to generate cashflow and is a widely adopted metric.
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
Continuing operations |
£’000 |
£’000 |
|
Reported operating profit |
8,066 |
8,395 |
|
Amortisation of intangible assets arising on business combinations |
989 |
1,535 |
|
Amortisation of other intangible assets |
1,151 |
1,058 |
|
Depreciation of property, plant and equipment |
4,481 |
4,001 |
|
Depreciation of right-of-use assets |
1,516 |
1,610 |
|
EBITDA |
16,203 |
16,599 |
|
Exceptional costs (Note 5) |
253 |
924 |
|
Share-based payments and associated National Insurance |
916 |
1,235 |
|
Adjusted EBITDA |
17,372 |
18,758 |
|
Adjusted EBITDA margin (expressed as a percentage of reported revenue) |
13.2% |
13.9% |
The reduction in underlying EBITDA margin is largely attributable to the reduction in gross margin described above with overheads being maintained at a consistent level of revenue but with a shift toward growth-related commercial activities.
Finance costs
For continuing operations, net finance costs reduced by £0.8m to £3.2m (FY25: £4.0m) primarily as a result of a reduced level of borrowing and a lower interest on the Group’s borrowings.
Tax
For continuing operations, the tax charge for the year was £1.7m (FY25: £1.7m).
The total tax charge for the year was £1.5m (FY25: £2.5m) comprising an income tax charge of £1.6m (FY25: £0.4m), and a deferred tax credit of £0.2m (FY25: charge of £2.1m).
Discontinued operations
The net profit after tax for the discontinued operations was £9.0m (FY25: £0.8m), shown as a single line item in the Consolidated Statement of Comprehensive Income. A fuller analysis of the components of this amount is shown in Note 4 of this Report.
Revenue for the discontinued operation for the year was generated entirely in the UK and was £42.1m (FY25: £44.6m). The reduction in revenue is primarily due primarily to customer losses associated with the Sungard acquisition and one individually significant customer loss which was not part of the acquired customer base. With only a partial offset of a reduced level of direct cost of goods sold, this reduction in revenue has largely dropped through to Adjusted EBITDA which was £14.6m for the year (FY25: £16.6m).
Earnings per share
As detailed further in Note 10 to this Report, the basic and diluted earnings per share for continuing operations amounted to 1.99 pence per share and 1.93 pence per share in the year, compared to 1.70 pence per share and 1.64 pence per share in FY25.
Adjusted basic and diluted earnings per share on continuing operations, which is an Alternative Performance Measure and excludes tax, amortisation of acquired intangibles, share-based payments and associated National Insurance and exceptional items to which a notional tax charge of 25% is applied, amounted to 3.30 pence per share and 3.20 pence per share in the year, compared to 3.82 pence per share and 3.70 pence per share in FY25.
Cash Flow
The Group’s Consolidated Cash Flow Statement is presented below and can be summarised as follows:
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
£’000 |
£’000 |
|
Operating profit |
19,160 |
11,460 |
|
Non-cash items |
12,351 |
23,931 |
|
Operating cash flow before exceptional items and movements in working capital |
31,511 |
35,391 |
|
Cash cost of exceptional items and provisions |
(3,989) |
(1,353) |
|
Operating cash flow before changes in working capital |
27,522 |
34,038 |
|
Net working capital movements |
(1,698) |
(4,127) |
|
Cash generated from operations |
25,824 |
29,911 |
|
Tax paid |
(649) |
(145) |
|
Net cash generated from operating activities |
25,175 |
29,766 |
|
Net cash used in investing activities |
(7,102) |
(11,362) |
|
Net cash used in financing activities |
(16,321) |
(18,497) |
|
Net increase/(decrease) in cash and cash equivalents |
1,752 |
(93) |
The constituent elements of the cash flow can be summarised as follows:
Non-cash items includes depreciation and amortisation of the property, plant and equipment and the intangible assets of the DC business which have been classified as current assets and have not been either depreciated or amortised, respectively;
The nature of the exceptional items is described in detail at Note 5;
Working capital increased due to short-term timing differences associated with the collection of trade receivables;
The level of investment in leasehold improvements and computer equipment in the DC business that was incurred during the prior year was not required in the current period; and
The level of dividends paid reduced by approximately £3.8m but this was offset by increased costs associated with the Group’s asset finance obligations.
In order to provide greater insight into the Group's cash generation from continuing operations, the table below reconciles the operating profit of the MSP to adjusted cash generated from the MSP operations, highlighting the key non-cash items, working capital movements and other operating cash flows that influence the conversion of profit into cash.
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
Continuing operations |
£’000 |
£’000 |
|
Operating profit |
8,066 |
8,395 |
|
Depreciation and amortisation |
8,137 |
8,204 |
|
Exceptional costs |
253 |
924 |
|
Share-based payments |
916 |
1,235 |
|
Adjusted EBITDA |
17,372 |
18,758 |
|
Profit on disposal of fixed assets |
23 |
- |
|
Non-cash movement on provisions |
140 |
- |
|
Working capital movements |
(1,753) |
(3,871) |
|
Cash movement on provisions |
(397) |
(33) |
|
Adjusted cash generated from operations |
15,385 |
14,854 |
|
|
|
|
Adjusted cash generated from continuing operations was £15.4m (FY25: £14.9m), representing cash conversion of 88.6% of adjusted EBITDA (FY25: 79.2%). The Group benefited from continued strong underlying profitability from the MSP business.
The Group's focus remains on converting operating profit into sustainable cash flows while maintaining investment in the business. This measure provides management and investors with a clearer view of underlying cash generation before the impact of financing costs, taxation and investment expenditure.
Net debt
Net debt for the Group amounted to £71.7m at 31 March 2026, compared to £65.5m at 31 March 2025, an increase of £6.2m.
The table below summarises the Group’s total movements (continuing and discontinued operations) in the components of net debt, with the cash flow and non-cash flow elements separated out:
|
|
As at 31 March 2023 |
Net cash flow |
Net non- cash flow |
As at 31 March 2025 |
Net cash flow |
Net non- cash flow |
As at 31 March 2026 |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Cash |
3,130 |
(93) |
(19) |
3,018 |
1,752 |
(55) |
4,715 |
|
Revolving Credit Facility |
(39,885) |
4,515 |
(3,577) |
(38,947) |
1,918 |
(2,927) |
(39,956) |
|
Term Loan |
(21) |
18 |
- |
(3) |
3 |
- |
- |
|
Asset Financing Facility |
(3,609) |
(1,367) |
52 |
(4,924) |
3,805 |
101 |
(1,018) |
|
Lease Liabilities |
(31,980) |
10,013 |
(2,632) |
(24,599) |
9,083 |
(19,928) |
(35,444) |
|
|
(72,365) |
13,086 |
(6,176) |
(65,455) |
16,561 |
(22,809) |
(71,703) |
Included in lease liabilities at 31 March 2026 are £34.9m (FY25: £23.6m) of IFRS 16 lease liabilities that were previously classified as operating leases under IAS 17 Leases.
The analysis of net debt at 31 March 2026 between continuing operations and discontinued operations is shown below:
|
|
Continuing operations |
Discontinued operations |
Total Group Year ended 31 March 2026 |
|
|
£’000 |
£’000 |
£’000 |
|
Cash |
4,715 |
- |
4,715 |
|
Revolving Credit Facility |
(39,956) |
- |
(39,956) |
|
Term Loan |
- |
- |
- |
|
Asset Financing Facility |
(1,018) |
- |
(1,018) |
|
Lease Liabilities |
(2,422) |
(33,022) |
(35,444) |
|
Net Debt |
(38,681) |
(33,022) |
(71,703) |
Adjusted net debt (Alternative Performance Measure)
Adjusted net debt is reported net debt (i.e. total borrowings net of cash) less supplier term loans and lease liabilities that would have been classified as operating leases under IAS 17. The Board considers that the Adjusted net debt measure is useful because it is the measure used by the Group’s banking syndicate as part of its covenant compliance obligations. The table is based on the both the Group’s continuing and discontinued operations.
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
£’000 |
£’000 |
|
Borrowings - Revolving Credit Facility |
(39,956) |
(38,947) |
|
Borrowings - Lease liabilities |
(35,444) |
(24,599) |
|
Borrowings - Term loan |
- |
(3) |
|
Borrowings - Asset Financing Facility |
(1,018) |
(4,924) |
|
Total borrowings |
(76,418) |
(68,473) |
|
Cash |
4,715 |
3,018 |
|
Reported net debt |
(71,703) |
(65,455) |
|
Term loans |
- |
3 |
|
Lease liabilities defined by the banking syndicate |
34,914 |
23,562 |
|
Adjusted net debt |
(36,789) |
(41,890) |
|
|
|
|
|
Shown as: |
|
|
|
Continuing operations |
(36,789) |
(38,771) |
|
Discontinued operations |
- |
(3,119) |
|
Adjusted net debt |
(36,789) |
(41,890) |
Financing
Total facilities and amounts drawn at 31 March 2026, compared to the year end date FY25 are summarised below.
|
|
31 March 2026 |
31 March 2025 |
|||||
|
|
Available |
Drawn |
Undrawn |
Available |
Drawn |
Undrawn |
|
|
|
£’000s |
£’000s |
£’000s |
£’000s |
£’000s |
£’000s |
|
|
Committed |
|
|
|
|
|
|
|
|
Revolving Credit Facility |
60,000 |
40,000 |
20,000 |
80,000 |
39,000 |
41,000 |
|
|
Term Loan |
- |
- |
- |
3 |
3 |
- |
|
|
Asset Financing Facility |
10,000 |
1,018 |
8,982 |
10,000 |
4,924 |
5,076 |
|
|
Lease Liabilities |
35,444 |
35,444 |
- |
24,600 |
24,600 |
- |
|
|
|
105,444 |
76,462 |
28,982 |
114,603 |
68,527 |
46,076 |
|
|
|
|
|
|
|
|
|
||||
|
Uncommitted |
|
|
|
|
|
|
||||
|
- Accordion Facility |
20,000 |
- |
20,000 |
20,000 |
- |
20,000 |
||||
|
|
20,000 |
- |
20,000 |
20,000 |
- |
20,000 |
||||
|
|
|
|
|
|
|
|
||||
|
Total borrowing facilities |
125,444 |
76,462 |
48,982 |
134,603 |
68,527 |
66,076 |
||||
Subsequent events
During the current financial year and before the date of this report, the Group has been successful in delivering multiple strategic events which have impacted the Group’s operations and its financial position, as follows:
- The sale of RDC which completed on 30 April 2026;
- A tender offer, which delivered £90.0m of cash to shareholders during August 2026;
- A share capital restructure, which resulted in an efficient realisation of cash to approximately 7,000 shareholders at a cash cost of approximately £46,000 during August 2026;
- A re-negotiation of its bank facilities that was completed on 28 August 2026; and
- A structured share buy-back programme of up to £1.5m of shares that is due to conclude on 30 September 2026.
Sale of RDC
The sale of RDC completed on 30 April 2026, and total gross proceeds received were £124.9m. Costs directly attributable to the sale were approximately £5.0m.
The carrying value of the net assets of the DC business at 31 March 2026 were:
|
|
|
|
At 31 March 2026 |
|
|
|
|
£’000 |
|
Assets held for resale |
|
|
106,628 |
|
Liabilities directly associated with the assets held for resale |
|
|
(53,163) |
|
Net assets held for resale |
|
|
53,465 |
The summary above indicates to the Board that the Group will report a substantial profit on sale of RDC within its results for the year ended 31 March 2027.
Tender Offer and Share Capital Restructure
On 19 June 2026, the Company published a circular to shareholders (the “Circular”) whereby it offered to purchase up to a maximum of 56,250,000 shares at a price of £1.60 per share (the “Tender Offer”) and also to undertake a share capital restructure (the “Share Capital restructure”) designed to provide a large number of minority shareholders with an efficient exit and to enable the company to reduce the associated administrative costs.
On 22 July 2026, the Company reported a full take-up of the Tender Offer and, accordingly, the Company purchased and cancelled 56,250,000 ordinary shares which represented 35.3% of the issued share capital at that time, with settlement made on or around 5 August 2026.
Immediately following the Tender Offer, the Company undertook the Share Capital Restructure which resulted in the Company purchasing a further 26,660 ordinary shares into treasury for a total consideration of approximately £46,000 (with the total number of shares held in treasury being 27,140).
Share buy-back programme
On 11 August 2026, the Company announced that it had approved a share buy-back programme of up to £1.5m in the period to 30 September 2026, in accordance with the authority given by shareholders at the General Meeting held on 7 July 2026. At 25 September 2026, the total number of shares purchased was 1,140,937 with an aggregate purchase price of approximately £1.2m.
Current net debt and bank facilities
As a result of the combination of these corporate actions and strong first half weighted operating cash generation, the Group’s net debt position as at 25 September 2026 (before normal month end payments) is materially different to that presented within this Consolidated Statement of Financial position as at the year end and can be summarised as set out below.
|
|
|
|
At 25 September 2026 |
|
|
|
|
£’000 |
|
Cash |
|
|
17,430 |
|
Revolving Credit Facility |
|
|
(19,269) |
|
Asset Financing Facility |
|
|
(673) |
|
Lease Liabilities1 |
|
|
(1,717) |
|
Net debt |
|
|
(4,229) |
|
Lease Liabilities that would have been classified as operating leases under IAS17 |
|
|
1,394 |
|
Adjusted net debt |
|
|
(2,835)
|
Note 1: Lease Liabilities and Lease Liabilities that would have been classified as Operating leases under IAS17 are calculated as at 31 August 2026, being the most recent internal reporting date of the Group. The Board considers that the amounts at 25 September are not significantly different.
Further, Adjusted net debt, ie. total borrowings net of cash less lease liabilities that would have been classified as operating leases under IAS 17 is £2.8m.
Furthermore, on 28 August 2026, the Group reached agreement for new bank facilities, and these are summarised below along with the associated utilisation at 25 September 2026.
|
|
|
Available |
Drawn |
Undrawn |
|
|
|
|
£’000 |
£’000 |
£’000 |
|
|
Committed |
|
|
|
|
|
|
Revolving Credit Facility |
|
30,000 |
19,269 |
10,731 |
|
|
Asset Financing Facility |
|
4,500 |
673 |
3,827 |
|
|
Lease Liabilities |
|
1,717 |
1,717 |
- |
|
|
|
|
36,217 |
21,659 |
14,558 |
|
|
|
|
|
|
|
|
|
Uncommitted |
|
|
|
|
|
|
Accordion Facility |
|
10,000 |
- |
10,000 |
|
|
|
|
10,000 |
- |
10,000 |
|
|
|
|
|
|
|
|
|
Total borrowing facilities |
|
46,217 |
21,659 |
24,558 |
|
Uncommitted facilities represent facilities available to the Group, but which may be withdrawn by the lender subject to agreement by the lenders and hence are not within the Group’s control.
These new facilities are provided by two banks and have an initial period of 3 years with an option for a further year, to be exercised at the Group’s discretion subject to the Group not being in breach at the time.
The borrowing cost of the RCF is determined by the Group’s leverage and has a variable borrowing cost based on a margin over SONIA at the Group’s current leverage levels with a current margin of 165 basis points at this leverage. A commitment fee is payable on the undrawn portion of the RCF at 40 basis points.
Closing
FY26 was a year of transition. The MSP business delivered high-quality recurring revenue and cash conversion with a reduction in adjusted net debt. The Group completed the sale of RDC and the final elements of the separation are coming to completion.
Post period end, the receipt of £124.9m of proceeds from the sale of the DC business, the £90m tender offer, the share capital restructure and the refinancing of the Group’s facilities have reset the balance sheet around a simpler, cash-generative MSP model.
The Board’s priorities for FY27 are unchanged: protect and grow underlying ARR, drive further efficiencies to optimise operating margins and convert earnings into cash. Utilisation of the Group’s cash will continue to be determined with a disciplined approach toward capital allocation between organic investment and further returns to shareholders.
Tim Sykes
Chief Financial Officer
Consolidated Statement of Comprehensive Income for the year ended 31 March 2026
|
|
|
|
Year ended 31 March 2026
|
Year ended 31 March 2025 |
|
|
Note |
|
£’000 |
£’000 |
|
Continuing operations |
|
|
|
|
|
Revenue |
|
|
131,985 |
135,138 |
|
Cost of sales |
|
|
(51,459) |
(51,857) |
|
Gross profit |
|
|
80,526 |
83,281 |
|
Operating costs |
|
|
(72,460) |
(74,886) |
|
Adjusted EBITDA1 |
|
|
17,372 |
18,758 |
|
Depreciation of property, plant and equipment |
7 |
|
(4,481) |
(4,001) |
|
Amortisation of intangibles |
6 |
|
(2,140) |
(2,593) |
|
Depreciation of right-of-use assets |
8 |
|
(1,516) |
(1,610) |
|
Exceptional costs |
5 |
|
(253) |
(924) |
|
Share-based payments and associated National Insurance |
|
|
(916) |
(1,235) |
|
Operating profit |
|
|
8,066 |
8,395
|
|
Finance income |
|
|
6 |
- |
|
Finance costs |
|
|
(3,228) |
(4,011) |
|
Profit before taxation on continuing operations |
|
|
4,844 |
4,384 |
|
Income tax expense |
|
|
(1,677) |
(1,691) |
|
Profit for the period from continuing operations |
|
|
3,167 |
2,693 |
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
|
|
Profit after tax for the period from discontinued operations |
|
|
8,951 |
795 |
|
Profit for the period attributable to owners of the parent |
|
|
12,118 |
3,488 |
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
|
Currency translation differences |
|
|
(183) |
(105) |
|
Net loss on cash flow hedges |
|
|
(94) |
(245) |
|
Deferred tax in relation to prior years |
|
|
(24) |
14 |
|
Total comprehensive profit for the period |
|
|
11,817 |
3,152 |
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic earnings per share |
10 |
|
7.61p |
2.20p |
|
Diluted earnings per share |
10 |
|
7.38p |
2.13p |
|
|
|
|
|
|
|
Earnings per share from continuing operations |
|
|
|
|
|
Basic earnings per share |
10 |
|
1.99p |
1.70p |
|
Diluted earnings per share |
10 |
|
1.93p |
1.64p |
Consolidated Statement of Financial Position as at 31 March 2026
|
|
|
|
31 March 2026 |
31 March 2025 |
|
|
Note |
|
£’000 |
£’000 |
|
Non-Current Assets |
|
|
|
|
|
Intangible assets |
6 |
|
34,671 |
36,428 |
|
Property, plant and equipment |
7 |
|
9,328 |
10,208 |
|
Right-of-use assets |
8 |
|
2,482 |
4,689 |
|
Trade and other receivables |
|
|
2,216 |
3,508 |
|
Deferred tax asset |
|
|
1,881 |
2,109 |
|
|
|
|
50,578 |
56,942 |
|
Current Assets |
|
|
|
|
|
Inventories |
|
|
2,391 |
2,509 |
|
Trade and other receivables |
|
|
32,370 |
28,809 |
|
Cash and cash equivalents |
|
|
4,715 |
3,018 |
|
Assets held for sale |
9 |
|
106,628 |
82,169 |
|
|
|
|
146,104 |
116,505 |
|
Total Assets |
|
|
196,682 |
173,447 |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Trade and other payables |
|
|
31,362 |
30,436 |
|
Bank loans and asset financing |
|
|
653 |
822 |
|
Lease liabilities |
|
|
1,402 |
1,526 |
|
Financial liabilities |
|
|
307 |
153 |
|
Provisions |
|
|
- |
507 |
|
Corporation tax payable |
|
|
1,160 |
329 |
|
Liabilities directly associated with the assets held for sale |
9 |
|
53,163 |
40,320 |
|
|
|
|
88,047 |
74,093 |
|
Non-Current Liabilities |
|
|
|
|
|
Trade and other payables |
|
|
2,324 |
2,461 |
|
Bank loans and asset financing |
|
|
40,321 |
39,933 |
|
Lease liabilities |
|
|
1,020 |
3,181 |
|
Financial liabilities |
|
|
32 |
92 |
|
Provisions |
|
|
162 |
233 |
|
|
|
|
43,859 |
45,900 |
|
Total Liabilities |
|
|
131,906 |
119,993 |
|
|
|
|
|
|
|
Net Assets |
|
|
64,776 |
53,454 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Called up share capital |
11 |
|
159 |
159 |
|
Share premium account |
|
|
75,803 |
75,649 |
|
Common control reserve |
|
|
(9,454) |
(9,454) |
|
Own shares held in treasury |
|
|
(1) |
(298) |
|
Cash flow hedge reserve |
|
|
(339) |
(245) |
|
Translation reserve |
|
|
(1,320) |
(1,137) |
|
Retained earnings |
|
|
(72) |
(11,220) |
|
Total Equity |
|
|
64,776 |
53,454 |
|
|
|
|
|
|
Consolidated Cash Flow Statement for the year ended 31 March 2026
|
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
Note |
|
£’000 |
£’000 |
|
Profit before taxation |
|
|
13,573 |
5,988 |
|
Finance income |
|
|
(6) |
- |
|
Finance costs |
|
|
5,593 |
5,472 |
|
Operating profit |
|
|
19,160 |
11,460 |
|
Adjustment for non-cash items |
|
|
|
|
|
Depreciation and amortisation |
6,7,8 |
|
8,137 |
20,961 |
|
Profit on disposal of property, plant and equipment |
|
|
23 |
- |
|
Exceptional costs |
5 |
|
3,719 |
1,703 |
|
Share-based payments |
|
|
976 |
1,267 |
|
Movement on provisions |
|
|
(504) |
- |
|
Operating cash flow before exceptional items and movements in working capital |
|
|
31,511 |
|
|
Cash costs of exceptional items |
|
|
(3,592) |
(1,320) |
|
Cash costs of provisions |
|
|
(397) |
(33) |
|
Operating cash flow before changes in working capital |
|
|
27,522 |
34,038 |
|
Changes in working capital |
|
|
|
|
|
Decrease in inventories |
|
|
117 |
1,678 |
|
Increase in trade and other receivables |
|
|
(5,874) |
(846) |
|
Increase/(decrease) in trade and other payables |
|
|
4,059 |
(4,959) |
|
Cash generated from operations |
|
|
25,824 |
29,911 |
|
Tax paid |
|
|
(649) |
(145) |
|
Net cash generated from operating activities |
|
|
25,175 |
29,766 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Interest received |
|
|
6 |
- |
|
Purchase of property, plant and equipment |
|
|
(6,658) |
(9,664) |
|
Purchase of intangible assets |
|
|
(450) |
(1,698) |
|
Net cash used in investing activities |
|
|
(7,102) |
(11,362) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Dividends paid |
|
|
(1,907) |
(5,705) |
|
Disposal of treasury shares on exercise of share options |
|
|
241 |
387 |
|
Financing of property, plant and equipment |
|
|
- |
1,714 |
|
Financing of unsecured loans |
|
|
- |
966 |
|
Interest paid on bank loans, term loans and asset financing |
|
|
(3,074) |
(3,597) |
|
Interest paid on leases |
|
|
(1,927) |
(1,251) |
|
Repayment of leases |
|
|
(7,156) |
(8,762) |
|
Repayment of asset financing liabilities |
|
|
(3,529) |
(1,031) |
|
Repayment of term loans |
|
|
(3) |
(18) |
|
Drawdown of bank loans |
|
|
10,500 |
8,500 |
|
Repayment of bank loans |
|
|
(9,500) |
(9,500) |
|
Issue of shares |
|
|
154 |
- |
|
Payment of loan arrangement fees |
|
|
(120) |
(200) |
|
Net cash used in financing activities |
|
|
(16,321) |
(18,497) |
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
|
1,752 |
(93) |
|
Cash and cash equivalents at beginning of period |
|
|
3,018 |
3,130 |
|
Effect of exchange rates |
|
|
(55) |
(19) |
|
Cash and cash equivalents at end of the period |
|
|
4,715 |
3,018 |
*In the current year, the non-cash movement on provisions has been separately presented within the cash flow. In the prior year, this movement was included within working capital movements and has not been separately disclosed.
Consolidated Statement of Changes in Equity for the year ended 31 March 2026
|
|
Share capital |
Share premium |
Common control reserve |
Own shares held in treasury |
Cash flow hedge reserve |
Translation reserve |
Retainer earnings |
Total equity |
||||||
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
||||||
|
At 1 April 2024 |
159 |
75,649 |
(9,454) |
(779) |
- |
(1,032) |
(10,060) |
54,483 |
||||||
|
Profit for the period |
- |
- |
- |
- |
- |
- |
3,488 |
3,488 |
||||||
|
Transactions with owners |
|
|
|
|
|
|
|
|
||||||
|
Share-based payments |
- |
- |
- |
- |
- |
- |
1,137 |
1,137 |
||||||
|
Dividends paid |
- |
- |
- |
- |
- |
- |
(5,705) |
(5,705) |
||||||
|
Share option exercises |
- |
- |
- |
481 |
- |
- |
(94) |
387 |
||||||
|
Other comprehensive income |
|
|
|
|
|
|
|
|
||||||
|
Currency forward contracts |
- |
- |
- |
- |
(245) |
- |
- |
(245) |
||||||
|
Currency translation differences |
- |
- |
- |
- |
- |
(105) |
- |
(105) |
||||||
|
Deferred tax relating to prior periods |
- |
- |
- |
- |
- |
- |
14 |
14 |
||||||
|
At 31 March 2025 |
159 |
75,649 |
(9,454) |
(298) |
(245) |
(1,137) |
(11,220) |
53,454 |
||||||
|
Profit for the period |
- |
- |
- |
- |
- |
- |
12,118 |
12,118 |
||||||
|
Transactions with owners |
|
|
|
|
|
|
|
|
||||||
|
Share-based payments |
- |
- |
- |
- |
- |
- |
876 |
876 |
||||||
|
Issue of new shares |
- |
154 |
- |
- |
- |
- |
- |
154 |
||||||
|
Dividends paid |
- |
- |
- |
- |
- |
- |
(1,907) |
(1,907) |
||||||
|
Share option exercises |
- |
- |
- |
297 |
- |
- |
(56) |
241 |
||||||
|
Deferred tax re share-based payments |
- |
- |
- |
- |
- |
- |
146 |
146 |
||||||
|
Deferred tax re share-based payments prior year |
- |
- |
- |
- |
- |
- |
(5) |
(5) |
||||||
|
Other comprehensive income |
|
|
|
|
|
|
|
|
||||||
|
Currency forward contracts |
- |
- |
- |
- |
(94) |
- |
- |
(94) |
||||||
|
Currency translation differences |
- |
- |
- |
- |
- |
(183) |
- |
(183) |
||||||
|
Deferred tax relating to prior periods |
- |
- |
- |
- |
- |
- |
(24) |
(24) |
||||||
|
At 31 March 2026 |
159 |
75,803 |
(9,454) |
(1) |
(339) |
(1,320) |
(72) |
64,776 |
||||||
Notes to the Financial information for the year ended 31 March 2026
- Corporate information
Redcentric plc is a public limited company incorporated and domiciled in England and Wales, whose shares are publicly traded on the AIM market of the London Stock Exchange. Redcentric plc was incorporated on 11 February 2013 and admitted to AIM on 24 April 2013. The registered office is located at Central House, Beckwith Knowle, Harrogate, HG3 1UG.
The Group Financial Statements have been prepared and approved by the Directors in accordance UK-adopted international accounting standards (“UK adopted IFRS”).
The principal accounting policies applied in the preparation of these Financial Statements are set out more fully in the Annual Report and Accounts. These policies have been applied consistently in the current and prior period.
This Financial Information is presented in pound sterling, being the currency of the primary economic environment in which the Group operates. All amounts have been rounded to the nearest thousand (£’000), unless otherwise indicated. The Financial information is prepared on the historical cost basis except that derivative financial instruments are measured at fair value.
- Basis of preparation
While the financial information included in this results announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not in itself contain sufficient information to comply with IFRSs.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2026 or 2025 but is derived from those accounts. Statutory accounts for the year ended 31 March 2025 have been delivered to the registrar of companies, and those for 2026 will be delivered in due course. The Auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The Financial Statements are prepared on a going concern basis which the Directors believe to be appropriate for the following reasons:
The Company meets its day-to-day working capital requirements from the Company’s operational cash flows, a Revolving Credit Facility, Asset Financing Facility and leasing arrangements. As at the year end date, the Revolving Credit Facility is a £60.0m facility (net £40.0m utilised at 31 March 2026); the Revolving Credit Facility and Asset Financing Facility were extended a further year to 26 April 2027. The Asset Financing Facility is a £10.0m facility and a total of £1.0m of the Asset Financing Facility was utilised at 31 March 2026.
Subsequent to the year end, on 28 August 2026, the Group successfully refinanced its banking facilities and entered into a new syndicated facility agreement with National Westminster Bank Plc and Barclays Bank PLC. The new facilities comprise a £30.0m Revolving Credit Facility together with a £10.0m Accordion facility available subject to lender approval. The facilities have an initial term of three years through to August 2029, with an option to extend for a further year subject to lender consent. Borrowings under the facility bear interest at a SONIA-based floating rate plus a leverage-linked margin ranging from 1.65% to 2.75% per annum.
The Directors have prepared detailed line-by-line financial forecasts, including cash flow forecasts, on a monthly basis for a period of at least 12 months from the date of approval of these Financial Statements (the “going concern assessment period”) which indicate that, taking account of reasonably possible downsides on the operations and its financial resources, the Group and the Company will have sufficient funds to meet their liabilities as they fall due for that period, and will comply with debt covenants over that period.
The Group is required to comply with financial debt covenants for adjusted leverage (net debt to adjusted EBITDA), cash flow cover (adjusted cash flow to debt service, where adjusted cash flow is defined as adjusted EBITDA less tax paid, dividend payments, IFRS 16 lease repayments and cash capital expenditure) and provisions relating to guarantor coverage such that guarantors must exceed a prescribed threshold of the Group’s gross assets, revenue and adjusted EBITDA. The guarantors are the Group plc, Redcentric Solutions Limited and Redcentric Data Centres Limited. Covenants are tested quarterly each year.
As at 31 March 2026, the DC business unit was classified as a disposal group held for sale in accordance with IFRS 5. Subsequent to the reporting date, the disposal of the DC business unit was completed on 30 April 2026. Following receipt of the consideration from the transaction, the Group repaid in full all outstanding borrowings under its Revolving Credit Facility ("RCF"). Accordingly, no amounts were drawn under the facility subsequent to completion of the disposal.
The Directors' going concern assessment incorporates the impact of the disposal, the resulting strengthening of the Group's liquidity position and the successful refinancing of the Group's banking facilities completed after the reporting date. The Group's forecasts and cash flow projections indicate utilisation of approximately £10.0m under the new facilities as at 31 August 2026. Following completion of the disposal, the guarantors to the Group's financing arrangements remain the Group plc and Redcentric Solutions Limited.
The Directors’ forecasts in respect of the going concern assessment period have been built from the detailed budget for the year ending 31 March 2027 as presented to the Board in May 2026, and associated financial forecast for the year ending 31 March 2028, and the going concern assessment takes account of the debt covenant requirements.
The forecasts include a number of assumptions in relation to order intake, renewal, churn rates and EBITDA margin improvements. From 1st April 2026 a new strategic growth plan has been assumed to target a significant market opportunity on VMware licensing due to Broadcom’s strategic shift pushing smaller customers to pinnacle partners of which the Group is one, alongside a target operating model change to enable cost base reductions with benefits to revenue, cost of sales and operating costs which have been stress tested in the downside scenario.
Whilst the Company’s trading and cash flow forecasts have been prepared using current trading assumptions, the operating environment continues to present several challenges which could negatively impact the actual performance achieved. These risks include, but are not limited to, achieving forecast levels of new order intake, the impact on customer confidence as a result of general economic conditions and inflationary cost pressures including unexpected one-off cost impacts. In making their going concern assessment, in light of these risks, the Directors have also modelled a combined severe but plausible downside scenario when preparing the forecasts.
The downside scenario assumes significant economic downturn over FY27 and into FY28, primarily impacting the ability to grow recurring revenue year-on-year, improve gross margin and limit operating expenditure growth to below inflationary levels as the Directors Note the uncertainties surrounding the delivery of new strategy. In this scenario, recurring revenue assumes only 50% of the cloud evergreen deals will continue into FY28, cost of sales inflation at 5% that is not recovered through price increases to customers, salary costs increasing by 3.5% over base levels and operating expenditure costs increasing by 2% over base levels.
An additional factor that can impact on the revenue and gross margin assumptions in the going concern assessment period is the level of customer cancellations (of an individual service or product). Whilst known, near-term customer cancellations have been modelled, coupled with an underlying level of customer cancellations based on historic trends, there remains a risk that unexpected, medium to large customer cancellations could occur in the near-term. The Company is protected contractually to a large extent with notice periods and cancellation clauses; however, a residual risk remains. An additional level of customer cancellations has therefore been modelled each quarter in the downside scenario to reflect this risk.
Other assumptions incorporated within the downside scenario include the achievement of only 80% of the non-recurring revenue forecast in the base case. In addition, lower IFRS 16 lease payments have been assumed as a result of a reduction in cloud evergreen contracts, with the related leased capital expenditure no longer required.
In preparing the cash flow forecasts and analysis relating to debt covenant compliance through the going concern assessment period, the Directors have considered the nature of exceptional items and are satisfied that such items meet the Company’s accounting policy and borrowings facility agreement definition of exceptional items.
A SONIA rate of 4.73% has been assumed, representing a 1.0 percentage point increase over the official published rate as at 26 July 2026. In light of external market expectations that interest rates have broadly stabilised, no additional sensitivity analysis in respect of interest rate movements has been incorporated within the severe but plausible downside scenario.
Both the base case and severe but plausible downside scenarios include the planned return of a significant proportion of the proceeds from the disposal of the DC business unit to shareholders, which completed on 5 August 2026.
Under the downside scenario modelled, and including the new customer contract overlay, the forecasts demonstrate that the Group is expected to maintain sufficient liquidity and will continue to comply with the relevant debt covenants without management taking mitigating actions. While not modelled, mitigating actions which are within the Group’s control would also be available in the event of a severe downside. Such actions include, but are not limited to, the rephasing of discretionary capital expenditure, and further management of discretionary cost areas such as marketing, training and travel.
The Directors therefore remain confident that the Group and Company have adequate resources to continue to meet their liabilities as and when they fall due within the period of at least 12 months from the date of this Report.
Changes in accounting policy and disclosure
The following amendments became effective as at 1 January 2025:
- Lack of exchangeability (amendments to IAS 21)
The amendment has however not had any impact on the Group for the year ended 31 March 2026 as the Group operates in jurisdictions where foreign currencies are readily exchangeable and did not encounter any circumstances in which exchangeability between currencies was lacking during the reporting period.
Adopted IFRS not yet applied
IFRS 18 Presentation and Disclosure in Financial Statements, which is effective for annual reporting periods beginning on or after 1 January 2027, will replace IAS 1 Presentation of Financial Statements. The standard introduces new requirements relating to the presentation of the statement of profit or loss, including specified categories, totals and subtotals, enhanced guidance on the aggregation and disaggregation of information, and additional disclosures relating to management-defined performance measures. The standard also includes consequential amendments to other accounting standards, including IAS 7 Statement of Cash Flows. The Group is currently assessing the impact of adopting IFRS 18. Whilst the standard is not expected to affect the recognition or measurement of the Group's assets, liabilities, income or expenses, it is expected to result in changes to the presentation and disclosure of information within the Group's Financial Statements.
Other than IFRS 18 there are no new standards, amendments to existing standards or interpretations that are not yet effective that are expected to have a material impact on the Group. Such developments are routinely reviewed by the Group and its financial reporting systems are adapted as appropriate.
Basis of consolidation
The Group Financial Statements consolidate those of the Company and of its subsidiary undertakings drawn up to 31 March 2026.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation.
Critical accounting judgements, key sources of estimation uncertainty and other areas of estimation
In the application of the Group’s accounting policies, the Board is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities, without clear direction from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Group’s risk management and climate-related commitments where appropriate. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Judgements
The Group has identified the following items as a critical accounting judgement which could have a significant impact on the amounts recognised in the Financial Statements for the year ended 31 March 2026.
Exceptional items
The Group presents separately, on the face of the Consolidated Statement of Comprehensive Income, material items of income and expenses, which, because of their nature and expected infrequency of events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of the Company’s underlying financial performance. An element of management judgment is required in identifying these exceptional items. Additional information is included in Note 5.
Estimates
There are no major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amount of the assets and liabilities in the next financial year.
Other estimates
Goodwill impairment
The Group is required to assess goodwill for impairment at least annually, or more frequently where indicators of impairment exist. Determining whether goodwill is impaired requires management to exercise significant judgement in estimating the recoverable amount of the relevant cash-generating units ("CGUs"), which is based on value-in-use calculations supported by independent valuation analysis.
The impairment assessment incorporates significant estimates and assumptions relating to future cash flow projections, expected trading performance, long-term growth rates and discount rates applied to each CGU. These assumptions are derived from Board-approved budgets and strategic plans and reflect management's assessment of current market conditions and future business prospects. Changes in these assumptions could have a material impact on the recoverable amounts calculated and, consequently, on the level of any impairment recognised.
Management engaged an independent valuation specialist to support the annual impairment assessment. The assumptions and methodologies applied, including forecast financial performance, terminal growth rates and weighted average cost of capital, were critically reviewed and challenged by management and the Audit Committee. Based on the results of the impairment testing performed, the recoverable amounts of the Group's CGUs exceeded their carrying values, resulting in no impairment charge being recognised during the year. Management therefore concluded that the carrying value of goodwill was appropriate at the reporting date. Additional information is included in Note 6.
- Segmental reporting
IFRS 8 requires operating segments to be identified based on internal financial information reported to the chief operating decision-maker (CODM) for decision-making purposes. The Group considers the role of the chief operating decision-maker (CODM) for decision-making purposes as being performed by the main Board.
During the year, the Group operated through two reportable segments: Managed Services ("MSP") and Data Centre Services ("DC"). Segment performance is evaluated primarily using adjusted EBITDA, which is the key measure reviewed by the CODM. A reconciliation of adjusted EBITDA to the relevant IFRS measure is provided in the CFO Report.
Whilst revenue is monitored across the Group's recurring, product and services revenue streams, these do not meet the definition of separate operating segments under IFRS 8. The associated operating costs and assets are managed collectively and are reported to the CODM on an aggregated basis. Consequently, segment assets, liabilities and cash flows are not separately reported, as these are reviewed and managed at a Group level.
As further described in Note 4, the DC segment has been classified as a discontinued operation in both the current and prior year.
Segmental results
The segment results for the year ended 31 March 2026 are as follows:
|
|
MSP – continuing operations |
DC – discontinued operations |
Total segments |
Adjustments and eliminations |
Consolidated |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Revenue |
|
|
|
|
|
|
Recurring revenue |
116,569 |
34,001 |
150,570 |
- |
150,570 |
|
Product revenue |
5,660 |
- |
5,660 |
- |
5,660 |
|
Services revenue |
8,209 |
531 |
8,740 |
- |
8,740 |
|
External customers |
130,438 |
34,532 |
164,970 |
- |
164,970 |
|
Inter-segment |
1,547 |
7,606 |
9,153 |
(9,153) |
- |
|
Total revenue |
131,985 |
42,138 |
174,123 |
(9,153) |
164,970 |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
External customers |
(51,313) |
(14,664) |
(65,977) |
- |
(65,977) |
|
Inter-segment |
(146) |
(1,547) |
(1,693) |
1,693 |
- |
|
Total cost of sales |
(51,459) |
(16,211) |
(67,670) |
1,693 |
(65,977) |
|
|
|
|
|
|
|
|
Gross profit |
80,526 |
25,927 |
106,453 |
(7,460)* |
98,993 |
|
|
|
|
|
|
|
|
Adjusted EBITDA Depreication of property, |
17,372 |
14,620 |
31,992 |
- |
31,992 |
|
Depreciation of property, plant and equipment |
(4,481) |
- |
(4,481) |
- |
(4,481) |
|
Amortisation of intangibles |
(2,140) |
- |
(2,140) |
- |
(2,140) |
|
Depreciation of right-of-use assets |
(1,516) |
- |
(1,516) |
- |
(1,516) |
|
Exceptional costs |
(253) |
(3,466) |
(3,719) |
- |
(3,719) |
|
Share-based payments and associated National Insurance |
(916) |
(60) |
(976) |
- |
(976) |
|
Operating profit |
8,066 |
11,094 |
19,160 |
- |
19,160 |
|
Finance income |
6 |
- |
6 |
- |
6 |
|
Finance costs |
(1,644) |
(3,949) |
(5,593) |
- |
(5,593) |
|
Profit before tax** |
6,428 |
7,145 |
13,573 |
- |
13,573 |
*This is eliminated out in operating costs therefore the effect is £nil at adjusted EBITDA.
**The profit before tax disclosed above does not reconcile directly to the reported discontinued operations profit before tax in Note 4, as certain finance costs are excluded from the reported discontinued operations. For segmental reporting purposes finance costs in respect of the Group’s RCF have been allocated based on an estimation of the original drawdown requirement, adjusted for the estimated segmental cash flows subsequent to initial drawdown. This has required a degree of judgement in respect of the drawdown allocation and the subsequent judgements over cash flows, however, represents managements best estimation of the segments use of the RCF during this period.
The segment results for the year ended 31 March 2025 are as follows:
|
|
MSP – continuing operations |
DC – discontinued operations |
Total segments |
Adjustments and eliminations |
Consolidated |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Revenue |
|
|
|
|
|
|
Recurring revenue |
119,070 |
35,928 |
154,998 |
- |
154,998 |
|
Product revenue |
4,888 |
- |
4,888 |
- |
4,888 |
|
Services revenue |
9,593 |
412 |
10,005 |
- |
10,005 |
|
External customers |
133,551 |
36,340 |
169,891 |
- |
169,891 |
|
Inter-segment |
1,587 |
8,231 |
9,818 |
(9,818) |
- |
|
Total revenue |
135,138 |
44,571 |
179,709 |
(9,818) |
169,891 |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
External customers |
(51,681) |
(16,828) |
(68,509) |
- |
(68,509) |
|
Inter-segment |
(176) |
(1,587) |
(1,763) |
1,763 |
- |
|
Total cost of sales |
(51,857) |
(18,415) |
(70,272) |
1,763 |
(68,509) |
|
|
|
|
|
|
|
|
Gross profit |
83,281 |
26,156 |
109,437 |
(8,055)* |
101,382 |
|
|
|
|
|
|
|
|
Adjusted EBITDA Depreication of property, |
18,758 |
16,633 |
35,391 |
- |
35,391 |
|
Depreciation of property, plant and equipment |
(4,001) |
(3,617) |
(7,618) |
- |
(7,618) |
|
Amortisation of intangibles |
(2,593) |
(832) |
(3,425) |
- |
(3,425) |
|
Depreciation of right-of-use assets |
(1,610) |
(8,308) |
(9,918) |
- |
(9,918) |
|
Exceptional costs |
(924) |
(779) |
(1,703) |
- |
(1,703) |
|
Share-based payments and associated National Insurance |
(1,235) |
(32) |
(1,267) |
- |
(1,267) |
|
Operating profit |
8,395 |
3,065 |
11,460 |
- |
11,460 |
|
Finance costs |
(2,352) |
(3,120) |
(5,472) |
- |
(5,472) |
|
Profit before tax |
6,043 |
(55) |
5,988 |
- |
5,988 |
*This is eliminated out in operating costs therefore the effect is £nil at adjusted EBITDA.
- Discontinued Operations
In the prior year, the Board committed to a plan to dispose of the DC business unit to focus on the Group's core MSP activities. As at the reporting date, the disposal process remained ongoing, and the DC business unit continued to satisfy the requirements for classification as a discontinued operation.
Although the DC business had been classified as held for sale and the Group remained fully committed to its disposal, the sale was not completed within the 12-month period generally contemplated by IFRS 5. The delay was attributable to the complexity of the negotiations and to certain key commercial and structural matters that were not identified, or could not reasonably be resolved, at the outset of the process. These factors were outside the Group's control.
Management continued to actively progress the transaction throughout the period and remained committed to the disposal plan. Accordingly, the held-for-sale classification has been retained in accordance with IFRS 5. As a result, the assets, liabilities and results of the DC business unit continue to be presented as a discontinued operation in these Financial Statements.
The profit of the discontinued operation is as follows:
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
|
£’000 |
£’000 |
|
Revenue |
|
42,138 |
44,571 |
|
Cost of sales |
|
(16,211) |
(18,415) |
|
Gross profit |
|
25,927
|
26,156 |
|
Operating expenditure |
|
(14,833)
|
(23,091) |
|
Adjusted EBITDA |
|
14,620 |
16,633 |
|
Depreciation of property, plant and equipment |
|
- |
(3,617) |
|
Amortisation of intangibles |
|
- |
(832) |
|
Depreciation of right-of-use assets |
|
- |
(8,308) |
|
Exceptional costs |
|
(3,466) |
(779) |
|
Share-based payments and associated National Insurance |
|
(60) |
(32) |
|
Operating profit from discontinued operations |
|
11,094 |
3,065 |
|
Finance costs |
|
(2,365) |
(1,461) |
|
Profit before tax from discontinued operations |
|
8,729 |
1,604 |
|
Income tax expense |
|
222 |
(809) |
|
Profit for the period from discontinued operations |
|
8,951 |
795 |
|
|
|
|
|
|
Earnings per share from discontinuing operations |
|
|
|
|
Basic loss per share |
|
5.26p |
0.50p |
|
Diluted loss per share |
|
5.45p |
0.49p |
Finance costs for the discontinued operation do not include finance costs which relate to the DC business unit but will remain within the continuing business. These finance costs will, however, be shown in the DC segment finance costs in Note 4.
Cash flows for the DC business unit have been derived on a direct basis using available financial information supporting the preparation of the Group Financial Statements. In the prior year, certain operating cash flows were estimated using adjusted EBITDA less exceptional costs as management’s best estimate, with no adjustment for working capital as comparative balance sheet information was not available to determine the associated movements. In the current year, following a full period of trading and the availability of opening balance sheet information, cash flows have been derived using a full cash flow reconciliation, including movements in working capital.
Cash flows from Investing and Financing activities represent those directly attributable to the business unit, with no significant allocation activity due to the discrete nature of these cash flows. In deriving cash flows from financial activities no apportionment has been made for the Group's equity or bank debt financing arrangements.
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
||
|
|
|
£’000 |
£’000 |
||
|
Net cash flow from operating activities |
|
11,093 |
16,029 |
||
|
Net cash flow from investing activities |
|
(3,224) |
(3,887) |
||
|
Net cash flow from financing activities |
|
(10,513) |
(6,295) |
||
Cash generated by the discontinued operations has been swept into the continuing Group as part of the Group's central treasury arrangements. Accordingly, the disposal proceeds are presented net of cash and no cash balance attributable to the discontinued operations was disposed of.
- Exceptional items
|
|
|
Year ended |
Year ended |
|
|
|
|
31 March |
31 March |
|
|
|
|
2026 |
2025 |
|
|
|
|
£’000 |
£’000 |
|
|
Included within operating costs: |
|
|
||
|
Acquisition related professional and legal fees |
|
- |
484 |
|
|
Restructuring costs |
|
253 |
440 |
|
|
Total exceptional costs from continuing operations |
|
253 |
924 |
|
|
Total exceptional costs from discontinued operations |
|
3,466 |
779 |
|
|
Total exceptional costs |
|
3,719 |
1,703 |
|
Current year
Restructuring costs of £0.2m relates to consulting fees incurred during the scoping phase of a business transformation and systems automation project. Additional costs are expected to be incurred in FY27. The remaining £0.1m relates to the facilities rationalisation project undertaken during the year. Cash costs in relation to restructuring costs were £0.3m.
Integration costs of £0.9m relating to discontinued operations were incurred during the year following the termination of the Working lease and the strategic consolidation of operations from two data halls into a single facility. These costs primarily comprise of consultancy fees, dilapidation provisions and temporary dual-running costs incurred during the transition period. A further £0.1m of integration costs relating to discontinued operations were incurred in respect of residual activities associated with prior-year projects undertaken to exit the Harrogate data centre. Of the total integration costs recognised, £0.7m represented cash expenditure during the year.
A total of £2.6m of costs relating to discontinued operations was incurred during the year, comprising residual costs associated with the DC carve-out, as described in the prior year, and costs incurred in connection with the agreed sale of the DC business. These costs primarily related to due diligence activities, separation and transaction support, regulatory and legal compliance requirements, and other preparatory work undertaken prior to completion of the sale process. An agreement for the sale of the DC business to Stellanor Datacentres Group Limited was reached on 22 October 2025, subject to customary regulatory and property-related conditions. The transaction subsequently completed on 30 April 2026, after the reporting date. No costs relating to post-completion activities have been recognised within these amounts. Total cash costs incurred during the year amounted to £2.2m.
Prior year
From time to time the Group explores potential M&A activity to further enhance shareholder value. During the year acquisition related professional and legal fees of £0.5m were incurred on acquisition related projects that did not come to fruition. Cash costs of acquisition related professional and legal fees were £0.5m.
Integration costs of £0.2m relating to discontinued operations relate to residual costs from the prior year projects to exit the Harrogate data centre and the decommissioning of two third party data centres inherited from historic acquisitions (see prior year narrative for further details). Cash costs were £0.1m.
Restructuring costs of £0.4m were incurred as a result of a one-off restructuring activity instigated by the Board to streamline operations and enhance long-term profitability of the Group. This project was undertaken as a direct consequence of the integration of prior year acquisitions and due to the nature and size of the initiative was deemed exceptional by management. Annualised savings from this restructure are estimated at approximately £1.0m per annum. Cash costs were £0.4m.
On 1 February 2025 the DC business was transferred from Redcentric Solutions Limited to Redcentric Data Centres Limited, a newly incorporated subsidiary to better reflect the segmental reporting of the DC business unit, and the contemplation of a potential disposal of the DC business unit. Both legal and professional fees of £0.4m and consultancy fees and staff costs of £0.2m were incurred relating to discontinued operations. Cash costs were £0.3m.
- Intangible assets
|
|
Goodwill |
Customer contracts and related relationships |
Trademarks and brands |
Software and licences |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Cost |
|
|
|
|
|
|
At 1 April 2024 |
60,640 |
80,130 |
649 |
7,650 |
149,069 |
|
Additions |
- |
- |
- |
1,698 |
1,698 |
|
Transfers from right-of-use assets |
- |
- |
- |
123 |
123 |
|
Reclassification to assets held for sale |
(33,399) |
(9,604) |
- |
- |
(43,003) |
|
At 31 March 2025 |
27,241 |
70,526 |
649 |
9,471 |
107,887 |
|
Additions |
- |
- |
- |
383 |
383 |
|
Disposals |
- |
- |
- |
(1,901) |
(1,901) |
|
At 31 March 2026 |
27,241 |
70,526 |
649 |
7,953 |
106,369 |
|
Accumulated amortisation and impairment |
|
|
|
|
|
|
At 1 April 2024 |
- |
64,105 |
649 |
5,432 |
70,186 |
|
Charged in year |
- |
2,367 |
- |
1,058 |
3,425 |
|
Transfers from right-of-use assets |
- |
- |
- |
105 |
105 |
|
Reclassification to assets held for sale |
- |
(2,257) |
- |
- |
(2,257) |
|
At 31 March 2025 |
- |
64,215 |
649 |
6,595 |
71,459 |
|
Charged in year |
- |
989 |
- |
1,151 |
2,140 |
|
Disposals |
- |
- |
- |
(1,901) |
(1,901) |
|
At 31 March 2026 |
- |
65,204 |
649 |
5,845 |
71,698 |
|
|
|
|
|
|
|
|
At 31 March 2026 |
27,241 |
5,322 |
- |
2,108 |
34,671 |
|
At 31 March 2025 |
27,241 |
6,311 |
- |
2,876 |
36,428 |
|
|
|
|
|
|
|
Amortisation of customer contracts has decreased by £1.3m to £1.0m in FY26 as the customer relationship assets held for sale have not been amortised in accordance with IFRS 5.
Customer contracts have a weighted average remaining amortisation period of 7 years and 2 months (FY25: 8 years and 2 months). There are no indicators of impairment at 31 March 2026.
Goodwill impairment testing
Under IAS 36 goodwill is tested annually for impairment, or more often when indicators of impairment exist. To confirm whether an impairment of the goodwill is necessary, management compares the carrying value to the recoverable amount. Other intangible assets are tested for impairment whenever events or a change in circumstances indicate carrying values may no longer be recoverable.
Goodwill is allocated to the Group's cash-generating units ("CGUs") in accordance with IAS 36. Following the identification of separate MSP and DC CGUs on 1 February 2025, the Group allocated the existing goodwill balance between the two CGUs using a relative value methodology. This allocation, which was determined based on the relative recoverable amounts of the CGUs at the date of reorganisation, continues to form the basis for goodwill allocation at 31 March 2026.
The carrying amount of goodwill allocated to the two CGUs following this relative value split on 1 February 2025 (which still stands true on 31 March 2026) was as follows:
|
|
|
|
1 February 2026 |
|
|
|
|
£’000 |
|
MSP |
|
|
27,241 |
|
DC |
|
|
33,399 |
|
|
|
|
60,640 |
The carrying amount of goodwill attributable to the DC has been classified as an asset held for sale in accordance with IFRS 5 and is therefore not subject to the requirements of IAS 36. Further details are provided in Note 9.
In line with IAS 36, impairment testing of the MSP goodwill was conducted at 31 March 2026. This was performed by calculating the VIU of the MSP business unit using a Board approved three-year forecast cash flow projection to the period of 31 March 2029.
The key assumptions used in the impairment testing of the Group were as follows:
New order intake increased steadily compared to the prior year, supported by sales team stability and improved market opportunities in public sector spend;
Price increases averaged 1.0% of total revenue;
Overall gross margin percentage of c.60%, broadly in line with historic trends for the MSP business;
Net new business, measured as in-year revenue generated from new order intake less customer cancellations, increases steadily. Growth is supported by a stable sales team and improving market conditions, together with additional cloud customer demand resulting from changes in the competitive landscape following Broadcom's licensing strategy developments.
Pre-tax discount rate of 14.67% at 31 March 2026 (FY25: 12.87%); and
Terminal growth rate percentage of 2.0% is consistent with the market the entity operates in for real growth.
The assumptions are based on historical performance, management's expectation of future market conditions and external sources of information where appropriate.
In performing the impairment assessment, the Group considered the potential impacts of climate-related risks and the costs associated with achieving net zero commitments. Management concluded that these factors would not have a material impact on the cash flow forecasts or the impairment assessment over the period considered.
At 31 March 2026, the recoverable amount of the MSP CGU exceeded its carrying value by a substantial margin. Management performed sensitivity analyses over the key assumptions, including revenue/EBITDA growth rates and discount rates. No reasonably possible change in any of these assumptions would result in the carrying amount exceeding the recoverable amount and, accordingly, no sensitivity disclosures are required under IAS 36.
- Property, plant and equipment
|
|
Leasehold improvements |
Office fixtures and fittings |
Vehicles and computer equipment |
Assets under construction |
Total |
|
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
|
Cost |
|
|
|
|
|
|
At 1 April 2024 |
16,294 |
9,085 |
24,384 |
- |
49,763 |
|
Additions |
3,893 |
453 |
5,124 |
194 |
9,664 |
|
Disposals |
(300) |
(65) |
(108) |
- |
(473) |
|
Transfer from right-of-use assets |
156 |
- |
650 |
- |
806 |
|
Reclassification to assets held for sale |
(17,877) |
(7,558) |
(96) |
(194) |
(25,725) |
|
Exchange differences |
- |
(4) |
- |
- |
(4) |
|
At 31 March 2025 |
2,166 |
1,911 |
29,954 |
- |
34,031 |
|
Additions |
- |
135 |
3,391 |
- |
3,526 |
|
Disposals |
(1,301) |
(478) |
(6,146) |
- |
(7,925) |
|
Other PPE adjustments |
188 |
59 |
(449) |
- |
(202) |
|
Exchange differences |
- |
(11) |
- |
- |
(11) |
|
At 31 March 2026 |
1,053 |
1,616 |
26,750 |
- |
29,419 |
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
At 1 April 2024 |
6,615 |
4,418 |
17,308 |
- |
28,341 |
|
Charged in year |
2,352 |
1,694 |
3,572 |
- |
7,618 |
|
On disposals |
(155) |
(50) |
4 |
- |
(201) |
|
Reclassification |
- |
- |
(57) |
- |
(57) |
|
Transfer from right-of-use assets |
485 |
- |
125 |
- |
610 |
|
Reclassification to assets held for sale |
(7,976) |
(4,442) |
(65) |
- |
(12,483) |
|
Exchange differences |
- |
(5) |
- |
- |
(5) |
|
At 31 March 2025 |
1,321 |
1,615 |
20,887 |
- |
23,823 |
|
Charged in the year |
349 |
337 |
3,795 |
- |
4,481 |
|
On disposals |
(1,301) |
(378) |
(6,101) |
- |
(7,780) |
|
Other PPE adjustments |
186 |
(608) |
(2) |
|
(424) |
|
Exchange differences |
- |
(9) |
- |
- |
(9) |
|
At 31 March 2026 |
555 |
957 |
18,579 |
- |
20,091 |
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
At 31 March 2026 |
498 |
659 |
8,171 |
- |
9,328 |
|
At 31 March 2025 |
845 |
296 |
9,067 |
- |
10,208 |
Included within property, plant and equipment additions is £nil (FY25: £2.1m) of assets financed under the Group’s Asset Financing Facility. The Directors have exercised judgement in determining that there has been no sale of these assets under IFRS 15 and therefore the assets are financed rather than representing a sale and leaseback arrangement.
- Right-of-use assets
|
|
|
Land and buildings |
Vehicles & computer Equipment |
Total |
|
|
|
£’000 |
£’000 |
£’000 |
|
Cost |
|
|
|
|
|
At 1 April 2024 |
|
67,143 |
14,250 |
81,393 |
|
Additions |
|
505 |
288 |
793 |
|
Reassessments |
|
(335) |
- |
(335) |
|
Transfer to property, plant and equipment |
|
(156) |
(650) |
(806) |
|
Transfer to intangible assets |
|
- |
(123) |
(123) |
|
Disposals |
|
(14,359) |
(1,232) |
(15,591) |
|
Reclassification to assets held for sale |
|
(50,058) |
- |
(50,058) |
|
At 31 March 2025 |
|
2,740 |
12,533 |
15,273 |
|
Additions |
|
14 |
135 |
149 |
|
Reassessments |
|
(23) |
24 |
1 |
|
Disposals |
|
(1,437) |
(107) |
(1,544) |
|
At 31 March 2026 |
|
1,294 |
12,585 |
13,879 |
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
At 1 April 2024 |
|
32,527 |
11,388 |
43,915 |
|
Charged in year |
|
8,966 |
952 |
9,918 |
|
Transfer to property, plant and equipment |
|
(485) |
(125) |
(610) |
|
Transfer to intangible assets |
|
- |
(105) |
(105) |
|
Disposals |
|
(12,411) |
(3,146) |
(15,557) |
|
Reclassification to assets held for sale |
|
(26,977) |
- |
(26,977) |
|
At 31 March 2025 |
|
1,620 |
8,964 |
10,584 |
|
Charged in year |
|
378 |
1,138 |
1,516 |
|
Reassessments |
|
(701) |
698 |
(3) |
|
Disposals |
|
(599) |
(101) |
(700) |
|
At 31 March 2026 |
|
698 |
10,699 |
11,397 |
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
At 31 March 2026 |
|
596 |
1,886 |
2,482 |
|
At 31 March 2025 |
|
1,120 |
3,569 |
4,689 |
|
|
|
|
|
|
Of the £0.1m right-of-use assets acquired in the year, £nil was funded using leases that would have previously been classified as finance leases under IAS 17 (FY25: £0.1m).
Included in the net book value of land and buildings at 31 March 2026 is £0.2m of right-of-use assets for dilapidations (FY25: £0.2m).
- Assets held for sale
The major classes of assets and liabilities of the DC business unit, which continued to meet the criteria for being held for sale as at 31 March 2026 are as follows:
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
|
|
|
£’000 |
£’000 |
|
Intangible assets |
|
|
40,813 |
40,746 |
|
Property, plant and equipment |
|
|
16,275 |
13,242 |
|
Right-of-use assets |
|
|
40,672 |
23,081 |
|
Trade and other receivables |
|
|
6,558 |
3,227 |
|
Prepayments |
|
|
1,572 |
754 |
|
Contract acquisition asset |
|
|
432 |
425 |
|
Accrued income |
|
|
306 |
694 |
|
Assets held for sale |
|
|
106,628 |
82,169 |
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
|
|
|
|
£’000 |
£’000 |
|
Trade and other payables |
|
|
4,316 |
1,005 |
|
Accruals |
|
|
2,831 |
3,017 |
|
Deferred income |
|
|
554 |
733 |
|
Asset financing liabilities |
|
|
- |
3,119 |
|
Leases |
|
|
33,022 |
19,892 |
|
Deferred tax liability |
|
|
1,394 |
1,650 |
|
Provisions |
|
|
11,046 |
10,904 |
|
Liabilities held for sale |
|
|
53,163 |
40,320 |
Included within intangible assets held for sale is goodwill of £33.4m (FY25: £33.4m). The above assets and liabilities are held at their carrying value which is lower than their fair value less costs of disposal. No impairment was identified on classification as held for sale, and no subsequent impairment has been recognised as at 31 March 2026.
- Earnings per share
The calculation of basic and diluted EPS for continuing operations is based on the following earnings and number of shares.
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
|
Earnings |
|
£’000 |
£’000 |
|
Statutory profit/(loss) |
|
3,167 |
2,693 |
|
Tax credit |
|
1,677 |
1,691 |
|
Amortisation of acquired intangibles |
|
989 |
1,535 |
|
Share-based payments and associated National Insurance |
|
916 |
1,235 |
|
Exceptional costs |
|
253 |
924 |
|
Adjusted earnings before tax |
|
7,002 |
8,078 |
|
Notional tax charge |
|
(1,750) |
(2,020) |
|
Adjusted earnings |
|
5,252 |
6,058 |
|
|
|
|
|
|
Weighted average number of ordinary shares |
|
Number ‘000 |
Number ‘000 |
|
In issue |
|
159,213 |
159,021 |
|
Held in treasury |
|
(72) |
(540) |
|
For basic EPS calculations |
|
159,141 |
158,481 |
|
Effect of potentially dilutive share options |
|
4,950 |
5,351 |
|
For diluted EPS calculations |
|
164,091 |
163,832 |
|
|
|
|
|
|
EPS for continuing operations |
|
Pence |
Pence |
|
Basic |
|
1.99 |
1.70 |
|
Adjusted |
|
3.30 |
3.82 |
|
Diluted |
|
1.93 |
1.64 |
|
Adjusted diluted |
|
3.20 |
3.70 |
The calculation of basic and diluted EPS for the Group (combined continuing and discontinued operations) is based on the following earnings (number of shares noted above).
|
|
|
Year ended 31 March 2026 |
Year ended 31 March 2025 |
||
|
Earnings |
|
£’000 |
£’000 |
||
|
Statutory profit/(loss) |
|
12,118 |
3,488 |
||
|
Tax charge |
|
1,455 |
2,500 |
||
|
Amortisation of acquired intangibles |
|
1,906 |
2,367 |
||
|
Share-based payments and associated National Insurance |
|
976 |
1,267 |
||
|
Exceptional costs |
|
3,719 |
1,703 |
||
|
Adjusted earnings before tax |
|
20,174 |
11,325 |
||
|
Notional tax charge |
|
(5,044) |
(2,831) |
||
|
Adjusted earnings |
|
15,131 |
8,494 |
||
|
|
|
|
|
||
|
EPS for combined continuing and discontinued operations |
|
Pence |
Pence |
||
|
Basic |
|
7.61 |
2.20 |
||
|
Adjusted |
|
9.51 |
5.36 |
||
|
Diluted |
|
7.38 |
2.13 |
||
|
Adjusted diluted |
|
9.22 |
5.18 |
||
In line with the Group’s policy, the notional tax charge above is calculated at a standard rate of 25% (FY25: 25%).
- Share capital
|
|
Ordinary shares of 0.1p each |
Share premium |
|
|
|
Number |
£’000 |
£’000 |
|
At 1 April 2024 |
158,884,919 |
159 |
75,649 |
|
New shares issued |
260,994 |
- |
- |
|
At 31 March 2025 |
159,145,913 |
159 |
75,649 |
|
New shares issued |
170,806 |
- |
154 |
|
At 31 March 2026 |
159,316,719 |
159 |
75,803 |
During the year, the Company allotted 170,806 ordinary shares of £0.001 each following the exercise of options under the Company's SAYE and LTIP schemes. The aggregate nominal value of the shares allotted was £171 and consideration of £154,265 was received.
The total shares held in treasury at 31 March 2026 were 496 at an average cost of £1.23 per share, therefore, with a total value of £611 (FY25: 242,175 shares at an average cost of £1.23, with a total value of £298,258).
The number of shares authorised is the same as the number of shares issued. Ordinary shareholders have the right to attend, vote and speak at meetings, receive dividends, and receive a return on assets in the case of a winding up.
The common control reserve represents the difference between the net assets acquired and the fair value of consideration transferred on the acquisition of the Group Holdings Limited via demerger from Redstone plc in 2013.
- Subsequent events
Disposal of the DC business
The Group continued to advance negotiations regarding the sale of RDC after 31 March 2026, with the transaction completing on 30 April 2026. As the disposal took place after the reporting date, it has not been recognised in the Financial Statements for the year ended 31 March 2026.
The total gross proceeds received were £124.9m and costs directly attributable to the sale were approximately £5.0m. The Group expects a significant profit on disposal to be reported in the Group results for the year ending 31 March 2027.
Bank facilities
On 28 August 2026, the Group entered into a new syndicated banking facility agreement with National Westminster Bank Plc and Barclays Bank PLC, refinancing its existing revolving credit facility. The new facilities comprise a £30.0m revolving credit facility together with an additional £10.0m Accordion facility which may be made available subject to the terms of the agreement. The facilities are provided for an initial three-year term, with an option for the Group to extend for up to one additional year, subject to the Company not being in breach of the agreement at that time.
Borrowings under the facility bear interest at a variable rate linked to SONIA plus a margin ranging from 1.65% to 2.75% per annum, depending on the Group's leverage ratio. A commitment fee is also payable on undrawn amounts. The facility includes customary security, guarantee, covenant and other terms consistent with a syndicated revolving credit facility of this nature.
Management has assessed the refinancing as a non-adjusting post balance sheet event. The successful renewal of the facilities provides continued funding capacity and liquidity support for the Group's operations and growth strategy.
Tender Offer and share capital restructure
Following the year end, the Group completed a capital reorganisation and return of capital to shareholders. On 7 July 2026 the Company completed the cancellation of its share premium account, creating approximately £75.8m of distributable reserves.
Subsequently, on 21 July 2026, the Company completed a £90.0m return of capital to shareholders through a tender offer. A total of 56,250,000 ordinary shares were repurchased and cancelled at a price of £1.60 per share, reducing the number of ordinary shares in issue from 159,321,733 to 103,071,733.
Following the tender offer and the issue of seven ordinary shares to facilitate the transaction, the Company completed a 20-for-1 share consolidation followed immediately by a 1-for-20 share subdivision, resulting in 103,071,740 ordinary shares of £0.001 each in issue. Fractional entitlements arising on the share consolidation were subsequently repurchased by the Company and are held in treasury. This was completed on 5 August 2026.
These transactions have been treated as non-adjusting events for the purposes of IAS 10 as they occurred after the reporting date.
Share buy-back programme
On 11 August 2026, the Company announced that it had approved a share buy-back programme of up to £1.5m in the period to 30 September 2026, in accordance with the authority given by shareholders at the General Meeting held on 7 July 2026. At 24 September 2026, the total number of shares purchased was 1,140,937 with an aggregate purchase price of approximately £1.2m.
These transactions have been treated as non-adjusting events for the purposes of IAS 10 as they occurred after the reporting date.
- ENDS -
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