AdEPT ‘Resilient’ Despite Pandemic’s Revenue Impact

AIM-listed AdEPT saw the financial fallout of the pandemic as it reported a six percent year-on-year drop in revenues to £57.9m.

The IT and telecoms remained optimistic despite gross profits falling 8.6 percent to £27.6m and underlying EBITDA tumbling 16 percent to £9.8m for the year ending 31 March 2021. Its traditional Telephony segment contributed 19 percent to overall revenue, representing a slight decrease of two percent.

However, it wasn’t all doom and gloom as the firm saw revenue from its Public Sector and Healthcare segments increase to 55.5 percent, an 11 percent rise on last year’s figure. Revenue from its Cloud Centric Strategic Services – which was described as the “heart” of its strategic ambitions – also grew nine percent to £25.1m. Managed services now accounted for 81 percent of both revenue and EBITDA.

A strong Q4 has continued into the new financial year, boosting AdEPT’s confidence that it will bounce back from its FY21.

CEO Phil Race stated:

“While the pandemic temporarily interrupted the trajectory of our growth, the board is pleased with the progress achieved under challenging circumstances.

“Given our strategic focus on Cloud Centric Strategic Services, the organic growth of nine percent in this aspect of our business is particularly pleasing. We are confident that the opportunities for the group remain strong, in a vibrant technology market, with demand for effective ICT services at an all-time high and likely to remain so.

“The momentum gained by the Group in Q4 FY21 has continued into Q1 FY22 with sales and margins in the new financial year to date firmly in line with market expectations”

AdEPT recently enlarged its banking facility to pursue its M&A strategy as it aims to make two acquisitions a year. It acquired London-based networking and security specialist Datrix as part of this strategy.

The MSP also developed new partnerships with vendors Cato Networks, Extreme Networks, and Palo Alto Networks to fulfill “key” customer needs.

“Our focus remains on the delivery of strong organic growth, whilst seeking further opportunities to consolidate the fragmented market, through complementary acquisitions which generate strong levels of recurring revenue and margin,” Race continued.

“Our new integrated operating system, ONE AdEPT, lies at the heart of our plans, providing the group with a scalable platform for growth.

“The business is in great shape and the board views the prospects for the group in the year ahead and beyond with confidence.”