Adept profit jumps as transition towards managed service provider speeds up
StockMarketWire.com - Communications and IT services provider Adept reported Tuesday, annual profit before tax increased by 32.9% supported by an increased in underlying earnings and revenue.
For the year to 31 March, profit before tax rose by 32.9% to £4.52m from £3.40m the previous year, revenue rose 34.8% to £46.4m and underlying earnings (EBITDA) rose 25% to £9.8m.
The uptick in revenue was supported by the company's managed services product which saw revenues increase by £13.3m to £32.4m from £19.1m the previous year as acquisitions, an increased level of organic contract wins and a lower relative churn rate bolstered performance.
Traditional fixed line revenues decreased to £14.0m, from £15.4m the previous year, as the company continued its transition from a traditional fixed line service provider towards a managed services provider.
Revenue from managed services account for 70% of total revenue, compared with 55.4% the previous year.
'The acquisition completed during the year combined with organic sales have increased the rate of transition of the Group towards a complete managed service provider,' said Chairman Roger Wilson.
Gross margins rose by 5.4% to 47.7%.
Adept proposed a final dividend of 4.50p per ordinary share, up from 4.00p last year, taking the total dividend for the year to 8.75p per ordinary share, up 12.9% from 7.75p.
'The focus for the coming year remains on developing organic sales through leveraging Adept's approved supplier status on the various public sector telecom frameworks, maintaining profitability and cash flow conversion, which will be used to reduce net borrowings and/or fund suitable earnings-enhancing acquisitions,' the company said.
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