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Gamma announces interim results for six months to 30 June 2018

Gamma Communications plc (“Gamma”), a leading, technology based provider of communications services to the UK business market, is pleased to announce its unaudited results for the six months ended 30 June 2018.


Financial highlights

Six month ended 30 June
2018 2017 (Restated2) Change (%)
Revenue £137.6m £116.3m +18.3%
Gross profit £62.3m £51.6m +20.7%
Gross margin 45.3% 44.4%
EBITDA (also being adj EBITDA1) £21.8m £16.7m +30.5%
PBT (also being adj PBT1) £15.5m £12.1m +28.1%
EPS (Fully Diluted, “FD”) 13.4p 11.4p +17.5%
Adjusted EPS1 (FD) 13.4p 10.4p +28.8%
Total dividend per share 3.1p 2.8p +10.7%
Cash generated by operations £18.4m £11.1m +65.8%
Cash generated by operations / EBITDA 84.4% 66.5%


Operational highlights

  • Continued strong growth –
    • The number of installed SIP Trunks increased from 680,000 at 31 December 2017 to 766,000 at 30 June 2018 (+13%).
    • The number of Cloud PBX users increased from 331,000 to 384,000 (+16%)
    • As a result of ongoing investment, data products have performed very well. Broadband has increased from 76,000 units to 85,000 (+12%) and Ethernet from 6,900 to 8,000 (+16%).
    • Mobile connections have increased from 35,000 to 42,000 (+20%) and Gamma successfully launched “Connect”, a solution which provides business critical end-user features to Gamma Horizon and Business Mobile users.
  • Strong growth across Gamma’s indirect business– continued focus on both strengthening current channel relationships and identifying new partner relationships.
    • Gross profit from indirect business increased from £39.5m in H1 2017 to £46.6m in H1 2018 (+18%).
    • The number of Channel Partners grew from 1,089 at 31 December 2017 to 1,146 at 30 June 2018 (+5%).
    • The Gamma Academy delivered 8,349 training courses to Channel Partners during H1 2018, representing strong engagement and participation across our partner base.
    • Gamma Accelerate delivered a significant increase in marketing campaigns run by Channel Partners during the period, when compared to H1 2017, and 75% of Gamma’s partners are now actively using the platform.
  • Strong execution across all aspects of Gamma’s direct business, continues to drive very positive growth.
    • Gross profit up from £12.1m in H1 2017 to £15.7m in H1 2018 (+30%)
    • Improved pipeline and several new contract wins has materially improved contracted backlog during the period, which provides a very confident future growth outlook.
    • In addition to an increased focus on cross-selling and up-selling to existing customers, new contract wins in the period included PRA Group, Xoserve, Howarth Timber and Engie.
    • Gamma’s strategy to develop a strong Public-Sector line of business is progressing well, with key wins from the Scottish Government, The Met Office and the YMCA, as well as several key wins across Central Government
  • Gamma’s new high capacity national optical network project was delivered on schedule and on budget. This enables Gamma to deliver services at 10Gb/s and above.


Andrew Taylor, Chief Executive Officer, commented: “I have been really impressed by what I have observed during my first months at Gamma, from colleagues, customers and other business partners. It is clear that Gamma has a deserved market leading reputation for customer service and reliability, product quality and innovation – as the strong results demonstrate today. These all represent important aspects of Gamma’s business model and provide a fantastic platform from which to take the business forward. I am focused on making sure that Gamma continues to deliver what its customers and channel partners want, while also ensuring that we continue to take the business forward and maintain its market leadership.”