iomart Group has issued a profits warning after seeing a rise in customer churn in part of its business.
It has revised its expected adjusted EBITDA to 10% below the current market expectations.
Despite the update, the Glasgow-headquartered cloud computing firm said that the last year had marked a “significant milestone” in its ambition to be the leading leading secure cloud services provider in the UK and that since the acquisition of Atech in October, trading had been strong “at both the revenue and profit level.”
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Within its core business it stated that order bookings remained strong, but that there had been “an acceleration in customer churn” in the self-managed infrastructure base.
“We have seen continued positive new order bookings across both the iomart and Atech offerings and are starting to see the power of the combined business flow through,” said Lucy Dimes, CEO of iomart Group plc.
“However, transformation takes time, and churn within legacy offerings continues to present a headwind. We will continue to optimise our cost structure, while pivoting the portfolio to higher growth segments, and are confident that we have the right team and offerings to achieve our bold ambitions.”
While adjusted EBITDA is anticipated to be approximately 10% below current market expectations, it said that revenue was likely to remain in line.
Its estimates for year end 31st March 25 are:
Revenue in the range of £142m to £143m;
Adjusted EBITDA in the range of £37.0m to £38.0m; and
Adjusted PBT in the range of £10.1m to £10.8m
Net Debt in the range of £95m to £98m
