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Gamma announces interim results for six months to June 2017

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 2017.


Financial highlights

Six months ended 30 June 2017 Six months ended 30 June 2016 Change (%)
Revenue £115.0m £104.7m +9.8%
Gross profit £54.1m £47.7m +13.4%
Gross margin 47.0% 45.6%
EBITDA £18.5m £14.9m +24.2%
Adjusted EBITDA £19.7m £16.3m +20.9%
PBT £12.5m £10.6m +17.9%
Adjusted PBT £13.7m £12.0m +14.2%
Fully Diluted EPS 11.8p 9.1p +29.7%
Adjusted EPS (Fully Diluted) 11.6p 10.1p +14.9%
Dividend per share 2.8p 2.5p +12.0%
Adj net operating cash inflow (i.e before tax) £15.3m £13.8m +10.9%
Net operating cash inflow before tax / Adj EBITDA 77.7% 84.7%


Operational Highlights

  • The Cloud PBX and SIP Trunking connections continue to grow ahead of the market:
    • The number of installed SIP Trunks increased from 511,000 at 31 December 2016 to 605,000 at 30 June
      2017 ( +18.4%).
    • The number of Cloud PBX users increased from 230,000 to 276,000 (+20.0%).
  • Growth in data products was strong:
    • Business broadband connections increased from 54,000 to 65,000 (+20.4%).
    • Ethernet connections rose from 3,520 to 4,322 (+22.8%).
  • As the new Gamma mobile network came into operation data traffic on it grew from 20.5 Tbytes in H2 2016 to 35.0
    Tbytes in H1 2017 (+70.7%).
  • Strong growth in the indirect business:
    • Gross profit from indirect business increased from £37.6m to £41.7m (+10.9%).
    • The number of Channel Partners grew from 970 to 1,023 (+5.5%).
  • Significant wins in the direct business drive growth:
    • Gross profit up from £10.1m to £12.4m (+22.8%).
    • New customers include itsu, Savills plc and Care UK.
    • Good progress in the public sector, key wins include Macmillan Cancer Support, Manchester University
      Hospitals NHS Foundation Trust whilst Your Housing Group added data, Cloud PBX and contact services to
      the previous SIP and mobile contract.
  • New product development has continued with:
    • Launch of Cloud Compute and Backup, providing packaged server applications for small to medium sized
    • Extension of the Horizon Cloud PBX service to provide increased integration with specific vertical CRM
      applications in areas such as recruitment and primary healthcare.
    • We remain on target for the launch of our fixed/mobile converged product later this year.


Bob Falconer, Chief Executive Officer, commented: “I am pleased with the performance of the business in the first half. We have continued to successfully grow revenue and margin across our core products and markets, with a particularly strong performance in enterprise and a growing capability in the public sector, leading to contracts with organisations such as itsu, Savills plc and Macmillan Cancer Support. Our SIP and Cloud PBX services continue to perform well and we are now seeing accelerated growth in data services following the investments we have made in our network; important in a market where customers are increasingly looking to buy all their communications services from one supplier. Other initiatives, such as Gamma Accelerate, a marketing and lead generation platform, are helping the channel, which is our primary route to market, to increase sales. Significant resources also continue to be placed on enhancing our current products whilst developing exciting new capabilities, in particular maximising the opportunities from our growing Full MVNO mobile service.”