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Gamma announces more strong results for 2017

Gamma Communications plc (“Gamma” or “the Group”), a leading, technology based provider of communications services to the UK business market, is pleased to announce its audited results for the year ended 31 December 2017.


Financial highlights

Years ended 31 December
2017 2016 Change (%)
Revenue £238.4m £213.5m +12%
Gross Profit £113.0m £98.8m +14%
Gross margin 47.4% 46.3%
EBITDA £39.6m £31.3m +27%
Adjusted EBITDA £41.6m £34.2m +22%
PBT £26.4m £21.6m +22%
Adjusted PBT £28.4m £24.5m +16%
EPS (Fully Diluted, “FD”) 23.9p 18.8p +27%
Adjusted EPS (FD) 24.6p 21.1p +17%
Total dividend per share 8.4p 7.5p +12%
Cash generated by operations £38.8m £31.3m +24%
Cash generated by operations / Adj EBITDA 93.3% 91.5%

All adjusted measures set out above and throughout this document which are described as “adjusted” and represent Alternative Performance Measures (“APMs”) are separately presented within the statement of comprehensive income or reconciled in the Financial Review section or segment note and are applied consistently. Where reference is made to adjusted EPS this is stated on a fully diluted basis. Definitions of APMs are included in Note 1.


Operational Highlights

  • Continued strong growth in all non-traditional products –
    • The number of installed SIP Trunks increased from 511,000 at 31 December 2016 to 680,000 at 31 December 2017 (a gain of +33%)
    • The number of Cloud PBX users increased from 230,000 to 331,000 (+44%)
    • Volumes of access products are increasing as a result of past investment. Broadband has increased from 54,000 units to 76,000 (+41%) and Ethernet from 3,500 to 5,300(+51%); and
    • Mobile proposition has taken longer to become established in the Channel than we had hoped but volumes now growing as the proposition has developed.
  • Gamma successfully launched its initial fixed/mobile converged offering in December 2017.
  • Strong growth in the indirect business
    • Gross profit from indirect business increased from £78.2m to £86.6m (+11%)
    • The number of Channel Partners grew from 970 to 1089 (+12%)
  • Significant wins in the direct business drive growth
    • Gross profit up from £20.6m to £26.5m (+29%)
    • The direct business made further progress with significant new contract awards including Rush Hair and Beauty, Stackhouse Poland, the insurance broker, and Thrifty UK (the latter has adopted Gamma’s cloud compute platform).
    • Our Public Sector base continues to grow with key wins from Merseyside Police and Norfolk and Suffolk NHS Foundation Trust.
  • The new high capacity national optical network project is on schedule and on budget. This will enable Gamma to deliver services at up to 10Gbit/s in the second half of 2018.


Bob Falconer, Chief Executive Officer, commented

“The business performed well throughout 2017, with solid growth across the product range and in both indirect and direct routes to market. Our Cloud PBX product – Horizon – now has an excellent position and reputation in the market and continues to displace traditional on-premises equipment, whilst Gamma remains synonymous with SIP Trunking, where we have continued to outpace the market growth. Data volumes have accelerated both in our fixed and mobile capabilities and this will continue to be fuelled by the general shift to Cloud based services, the expansion of fibre reach in the UK and the necessity to work from anywhere. We are seeing good returns on our selective investments in this area. Direct wins in enterprise and public sector include Leicester City Council, itsu, The Financial Ombudsman, and MacMillan Cancer Support. Our investments in development have brought many useful product enhancements and I was particularly pleased to be able to launch our initial converged fixed/mobile voice service which brings real and novel benefits to a business user.

“Having recently announced my planned retirement at the AGM on the 23rd May, these are my last set of results as Chief Executive of Gamma. The business is in excellent shape, has a clear differentiated strategy, with many exciting opportunities ahead of it; a momentum my successor Andrew Taylor and the board are keen to maintain. I would like
to thank everyone at Gamma, our many partners, customers, shareholders and Board, I have enjoyed working with you all. I look forward to welcoming Andrew Taylor to Gamma as CEO Designate in April and wish him all the best for the future.”


Notes to Editors

Gamma is a rapidly growing, technology based, provider of communications services to the business market (sales are in GBP to UK based businesses). Gamma’s services, such as Cloud PBX, Inbound Call Control Services and SIP Trunking, are designed to meet the increasingly complex voice, data and mobility requirements of businesses, through the exploitation of its own intellectual property.

Gamma also provides business-grade mobile and data services and, as a consequence of its history, has a substantial voice service capability. These services enable Gamma to provide a comprehensive range of communications services.

Gamma has enjoyed strong organic revenue and EBITDA growth driven by a high percentage of revenues which repeat monthly. The business had 901 employees at 31 December 2017. It operates across six main locations – headquartered in Newbury – with offices in London, Manchester, Glasgow, Portsmouth and Budapest.

A full set of the audited statutory accounts are available at