Redcentric confident for the full year

(Sharecast News) - Redcentric said it remained on track to make "considerable progress" this year, including a jump in annual earnings, despite a slowing order intake.

The IT managed services provider said the political uncertainty and general economic backdrop seen at the start of the year had led to a slower order intake in the second half, with the sales pipeline also returning to "more normal" levels.

As a result, it said second-half revenues and gross profits were likely to be broadly flat, although it expected to benefit from around £0.9m in cost savings.

However, Redcentric continued: "Overall, this would represent very considerable progress with full-year revenues up circa 7% and adjusted earnings before interest, tax, depreciation and amortisation in excess of 30% on the prior year."

The update came as the AIM-listed firm posted a 6% uplift in revenues in the first half to 30 September to £86.8m, while adjusted EBITDA jumped 25% to £18.2m.

Peter Brotherton, chief executive, said: "[The first half] marks the first reporting period to fully reflect the benefits of the investments made in the 2022 and 2023 full years.

"With the energy market returning to more normalised conditions, combined with the positive impact of energy conservation and integration measures implemented in the 2024 full year, the company has delivered strong financial results.

"Looking ahead, we anticipate valuation clarity and definable improved profitability from the strategic decision to separate reporting an implementation of growth initiatives to the two core businesses, data centres and the managed service provider business."

As at 0930 GMT, shares in Redcentric were up 1% at 117.35p.