Adept Telecom Plc (LON:ADT) CFO John Swaite talks to DirectorsTalk about its strong trading performance, John provides a summary of the results, explains how its profit to cash conversion has been deployed, the strategic fit for the 3 acquisitions made during the period, how the enlarged bank facility is being used and what shareholders should look forward to in future periods.
AdEPT Telecom Plc a leading UK independent provider of award-winning unified communications and IT services, announced yesterday results for the year ended 31 March 2017.
· 14th consecutive year of increased underlying EBITDA up 27.2% to £7.83m (2016: £6.15m)
· Revenue increased by 19.2% to £34.4m (2016: £28.9m)
· Gross margin % increased by 2.0% to 42.3% (2016: 40.3%)
· Underlying EBITDA margin % increased by 1.4% to 22.7% (2016: 21.3%)
· 20.3% increase to adjusted earnings per share to 23.09p (2016: 19.19p)
· 19.2% increase to dividends declared to 7.75p (Interim 3.75p, Final 4.00p) (2016: 6.50p)
· Year-end net debt* of £15.5m (2016: £6.0m)
· New 5 year £30m revolving credit facility in place with Barclays and RBS
· Managed services accounted for 55.4% of total revenue (2016: 44.3%)
· Acquisition of entire issued share capital of Comms Group UK Limited completed in May 2016
· Acquisition of entire issued share capital of CAT Communications Limited and Progressive Communications Limited in November 2016
· Acquisition of entire issued share capital of OurIT Department Limited in February 2017
* Net debt is defined as cash and cash equivalents less short-term and long-term borrowings and prepaid bank fees
Commenting upon these results Chairman Roger Wilson said: “AdEPT has delivered a 27% increase to underlying EBITDA for the year ended 31 March 2017 and the Group continues to deliver consistently high levels of free cash flow generation. The continued strong cash generation has funded a 19% increase to dividends declared during the year and the Board is confident that continued focus on underlying profitability and cash generation will support a progressive dividend policy.
Free cash flow generated combined with the new larger debt facility put in place in February 2017 was used by the Company to complete three earnings enhancing acquisitions during the current period. Following these acquisitions, the Group is able to offer its existing and targeted customer base a fully converged unified communications and IT service. The acquisitions completed during the year combined with organic sales have increased the rate of transition of the Group towards a complete managed service provider, with revenue from managed services accounting for more than 55% of the total in the year ended 31 March 2017.”