Redcentric plc
("Redcentric" or the
"Company")
Trading Update
Redcentric plc (AIM: RCN), a leading UK IT
managed services provider offering cloud, cyber security,
connectivity and communication solutions to mid-market and
enterprise customers, is pleased to announce the following update
for the financial year ended 31 March 2024 ("FY24").
PROVISIONAL
RESULTS FOR THE YEAR ENDED 31 MARCH 2024 (FY24)
We are pleased to announce the following
provisional results for FY24:
|
FY24
(£m)
|
FY23
(£m)
|
Change
|
Revenue
|
163.1
|
141.7
|
+15.1%
|
Recurring Revenue
|
149.1
|
128.5
|
+16.0%
|
Recurring Revenue %
|
91.4%
|
90.7%
|
+0.7%
|
|
|
|
|
Adjusted EBITDA*
|
28.4
|
24.5
|
+15.9%
|
Adjusted net debt
|
41.9
|
35.6
|
+17.7%
|
*Adjusted EBITDA is EBITDA excluding exceptional items,
share-based payments and associated National
Insurance
These results reflect the benefits of the first
full year of trading contribution from the 4D Data Centres and two
Sungard asset acquisitions made in FY23. They also reflect the
delays in implementing the new cooling infrastructure at the London
Technology Centre ("LTC") and the closure costs of the Harrogate
data centre both of which will benefit performance in
FY25.
OPERATIONAL
HIGHLIGHTS
·
Following the acquisition of VMware by Broadcom, Redcentric
has been selected as one of only seven UK strategic partners.
Initial sales engagement with customers has been encouraging with
several new logos signing contracts during March and April
2024.
· All
the original integration programmes were completed by the year end
with annualised costs savings of £22m
being achieved, in line with previous announcements. We now
operate fully integrated systems, utilising single Enterprise
Resource Planning, HR and customer service systems.
·
Whilst all of the planned electricity conservation measures
were completed by the year end, the installation of the LTC cooling
infrastructure was delayed by four-and-a-half-months as a result of
having to decontaminate the cooling system water prior to the
installation of the new plant. The plant was eventually installed
in November 2023 and was fully commissioned by the end of January
2024. The new system is performing well with ongoing savings
achieved to date slightly higher than our original
expectations.
·
Adjusted Net Debt at the year-end was £41.9m up from £35.6m.
On 26 March 2024 the company agreed with its banking syndicate to
extend the current banking facilities by one year under the same
terms as the original agreement. The facilities are now due to
expire on 25 April 2026.
CURRENT
TRADING AND OUTLOOK
· The
electricity conservation measures are expected to generate year on
year volume savings of £2.8m, this, combined with significantly
reduced electricity commodity prices from 1 April 2024 is expected
to reduce electricity charges by £8.1m and will result in FY25
fully reflecting the benefit of the acquisitions made during FY22
and FY23.
· The
closure and decommissioning of the Harrogate data centre was
completed at the end of March 2024 in line with our project plan
and expectations. Whilst most of the customers were
successfully migrated to our Elland data centre, four of the larger
customers unexpectedly decided to cancel their contracts. The
annualised revenue and profit from these customers totalled £2.6m
and £1.3m respectively, which will result in reduced associated
revenues and profits of £2.0 and £1.0m respectively in FY25,
however, this loss will be partly offset by reduced annual running
costs resulting from the closure.
· The
focus for FY25 will be to continue driving organic recurring
revenue growth of at least 5% and leveraging operational gearing to
deliver improved profit margins.
Peter Brotherton, Chief Executive Officer,
commented:
"FY24 was a very productive year with all the original
integration programmes completed, generating cost savings either in
line or slightly ahead of our expectations.
The electricity conservation measures were implemented later
than expected but are now yielding very significant savings which
are slightly ahead of our original run rate expectations.
These volume savings, combined with secured lower electricity
prices from 1 April 2024 are expected to reduce electricity costs
by £8.1m in FY25.
Looking forwards, our key tasks for FY25 will be to continue
to drive organic growth and focus on delivering productivity gains
to drive improved margin and cashflow
performance."
Enquiries:
Redcentric plc
Peter Brotherton, Chief Executive
Officer
David Senior, Chief Financial
Officer
|
+44 (0)800 983 2522
|
Cavendish
Capital Markets Limited - Nomad and Broker
Marc Milmo / Simon Hicks / Charlie
Beeson (Corporate Finance)
Andrew Burdis / Sunila de Silva
(ECM)
|
+44 (0)20 7220 0500
|
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.