Castleton swings to pretax profit buoyed by revenue, cash generation growth

10:31 19/06/2018 - Software group Castleton Technology said Tuesday it swung to a pre-tax profit in the 12 months to the end of March supported by an increase in revenue and strong cash generation.

For the year to 31 March 2018, group pre-tax profit rose to £1.8m from a loss of £0.5m the previous year, revenue grew to £23.3m from £20.3m, while adjusted earnings (EBITDA) rose to £5.1m from £4.4m.

Cash conversion was at 101% of adjusted earnings (EBITDA) for the year, compared with 105% the previous year, and at 88% of adjusted EBITDA post-exceptional costs compared with 86% the previous year.

The uptick in revenue growth was supported by strong performance in the software solutions division which saw revenue grow to £12.4m for the year from £10.8m and the managed services division, which generated revenue of £10.9m, up from £9.4m the previous year.

Gross margin for the software solutions division decreased slightly from 92% to 91% and for the managed services division it also decreased slightly from 45% to 44% amid tweaks in the sales mix, the company said.

'We are pleased to report that Castleton has continued to perform well in delivering another year of significant organic growth in both revenues and profit, underpinned by ongoing excellent cash generation,' said Dean Dickinson, CEO of Castleton.

'The market opportunity remains large and given the Group's now established position as a 'one stop shop' serving the social housing sector, the Board is very optimistic about the Group's continued growth prospects.'

At 10:31am: (LON:CPT) Concepta Plc share price was 0p at 5.7p

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