Gamma Communications plc (LON:GAMA) has announced its unaudited results for the six months ended 30 June 2026
Robust first half performance, with strong German growth and high cash conversion.
| Six months ended 30 June | |||
| 2026 | 2025 | Change (%) | |
| Revenue | £330.0m | £316.6m | 4% |
| Gross Profit | £178.1m | £172.0m | 4% |
| Gross Margin | 54% | 54% | |
| Adjusted EBITDA1 | £72.5m | £70.9m | 2% |
| Profit before tax (“PBT”) | £50.1m | £43.5m | 15% |
| Adjusted PBT1 | £59.2m | £61.0m | (3%) |
| Earnings Per Share (“EPS”) (fully diluted) | 40.2p | 34.1p | 18% |
| Adjusted EPS (fully diluted)1 | 47.7p | 47.9p | (0%) |
| Adjusted cash generated by operations1 | £70.3m | £63.7m | 10% |
| Adjusted cash conversion1 | 97% | 90% | |
| Net debt1 | (£3.8m) | (£21.6m) | |
Key highlights
| Growth across key financial performance metrics | |||
| · | Group results were underpinned by strong growth in our German businesses and improved momentum in Service Provider, and were delivered despite the continued challenging UK SME macroeconomic backdrop. | ||
| · | Recurring revenue2 remains high at 90% (H1 2025: 90%). | ||
| · | Return on capital employed (“ROCE”)1 was healthy at 30% (2025: 28%). | ||
| · | Gross profit up 4% (flat on an organic basis); Adjusted EBITDA increased by 2%. | ||
| • | Germany SME increased gross profit by 30% to £44.8m (H1 2025: £34.4m) with 11% organic growth1. Strong demand for cloud communications solutions continued to accelerate in both our channel and digital direct businesses. | ||
| • | UK SME gross profit declined by 7% to £69.3m (H1 2025: £74.3m3) reflecting ongoing market headwinds and continuing pricing pressure, as well as some non-recurring credits in H1 2025. Absolute gross profit was consistent with H2 2025. The year-on-year decline was despite strong volume growth in cloud and connectivity propositions, with sustained demand for “Webex for Gamma”, “PhoneLine+” and full fibre connectivity (“FTTP”). Gross profit from PSTN related products was consistent with H1 2025, due to price rises and lower than expected churn. | ||
| • | Service Provider increased gross profit by 6% to £23.1m (H1 2025: £21.7m3), driven by increased traffic volume in the UK. Our partnerships with major global technology vendors continued to expand with new contracts to carry European and UK voice traffic. The APAC expansion continued to progress well, with local customers now established in Australia and Singapore, and the licence obtained in the Philippines. | ||
| • | Enterprise gross profit declined by 2% to £31.5m (H1 2025: £32.3m3) due to the expected annualised impact of 2025 ethernet pricing pressure. These pressures were partly offset by equipment sales in the period resulting in 1% gross profit growth since H2 2025. There were significant wins and notable contract extensions across key markets, including pan-European customers, and continued momentum in the UK. | ||
| · | Adjusted PBT was down 3% driven by higher depreciation and amortisation (excluding business combinations) and lower interest income. Adjusted EPS (fully diluted) was flat (0%) with decline in Adjusted PBT offset by a lower share count following our buyback activity. | ||
| Strong balance sheet | |||
| · | Underlying cashflow remains healthy with adjusted cash generated by operations increasing 10% to £70.3m (H1 2025: £63.7m) and adjusted cash conversion of 97% (H1 2025: 90%). Net debt as at 30 June 2026 was £3.8m (31 December 2025: £9.3m). The Group has deleveraged rapidly since its £152.2m acquisition of Starface in February 2025 while also completing share buybacks of £45.1m in H1 2025 and £21.1m as at the end of June 2026. A payment of £13.4m for the 2025 final dividend was also made in the period. | ||
| Progress delivering strategic priorities | |||
| · | Cisco’s “Webex for Gamma” will be available shortly across all of Gamma’s markets – the UK, Germany, Spain and the Netherlands – supported by our Cisco top-tier Preferred Partner status. The number of “Webex for Gamma” seats has now grown to c.90k (31 December 2025: 56k), representing one of the largest installed bases of Webex Calling Wholesale seats globally. | ||
| · | Continued focus on operational efficiency and disciplined cost management. | ||
| · | Adoption of AI solutions accelerated across our portfolio, with AI-enabled capabilities improving customer service, security and data use for customers and partners. This included integrating leading hyperscaler capabilities and targeted standalone products. | ||
Recommended cash offer
On 1 September 2026, a recommended cash offer from Epiris (Bradbury Bidco Ltd) for the entire issued and to be issued ordinary share capital of Gamma was announced.
The Gamma Board, having carefully considered Epiris’ offer with its advisers, took into account Gamma’s market valuation before the Offer Period, its strengths and prospects as an independent listed company, the risks associated with delivering its standalone strategy, the value and certainty of the all-cash offer, the outcome of discussions following inbound interest, and Epiris’ intentions for Gamma and its stakeholders. These include increased investment and a renewed strategic focus on innovation and AI to accelerate growth, strengthen Gamma’s competitive position and unlock its long-term potential. The Board concluded that the Acquisition provides Gamma Shareholders with an opportunity to realise their investment in cash at a value which may not otherwise be achievable in the foreseeable future and with certainty, and represents a superior outcome to pursuing Gamma’s standalone strategy.
Capital Returns
As a result of the announcement of the proposed acquisition of the Group, the Group does not intend to declare or pay any further dividends prior to the effective date. The share buyback programme announced on 13 January 2026 is currently suspended, as the current share price is not within certain pre-set parameters agreed with Investec Bank plc, which was appointed to manage the share buyback programme.
Notes:
1. See section “Alternative Performance Measures”
2. Recurring revenue being revenue which is recognised “over time” as per note 3 to the interim financial statements.
Cost recharges between the Group’s operating segments have been revised during the period with comparatives restated, see note 3.
