Redcentric is reducing its exposure to low-margin product sales, the MSP said in a trading update in which it also revealed it has enlisted former Computacenter director Mo Siddiqi as its new chief operating officer.
The £110m-revenue AIM-listed outfit said this morning that double-digit recurring revenue growth in the first half of its fiscal year ending March 2017 has been offset by the "planned continued reduction in low-margin product sales".
"The board remains confident in the outlook for the business and expects to deliver results in line with its expectations for the year," it said.
Redcentric used the update to unveil the appointment of Siddiqi, who was previously international director at Computacenter. He will sit on its operating board, helming sales and operations.
"Under his leadership, international contracts became a significant contributor to Computacenter's group contract base, including many of the company's largest customers," Redcentric said.
"Synergies" from recent acquisitions, coupled with the shift in the revenue mix away from product, have helped drive "mid-teens" percentage increase in EBITDA during the first half, Redcentric said.
The MSP sold its metropolitan area fibre networks in Cambridge, Portsmouth and Southampton to BT rival CityFibre earlier this week for £5m.
Including the proceeds of the sale, net debt is set to be around 0.6 times annualised adjusted EBITDA at half year, down from 1.0 times EBITA at 31 March 2016, Redcentric said.
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