‘We will be back to growth next year’: Redcentric CEO and CFO on H1 FY26 results

The MSP’s leaders talk new evolution strategy, the rising importance of cybersecurity, and partner base expansion

Despite a dip in revenue in H1 FY25, Redcentric remains confident in the future, as it intends to turn technological evolution into financial opportunity.

Revenue went down 3.6 per cent to £66.8m, compared with £69.2m the year prior.

Recurring revenue decreased 0.9 per cent, landing at £60.4m (H1 FY25: £60.9m).

Adjusted EBITDA increased to £9.1m, a 2.7 per cent rise from £8.9m last year.

This comes as the first half of the financial year has been about the quality of earnings, Redcentric CEO Michelle Senecal de Fonseca and CFO Tony Ratcliffe tell CRN.

“Revenue dipped slightly because we’ve been very selective about taking on the right business at the right margin,” says Ratcliffe.

“We’re investing more in the MSP business in H2, but that will generate strong returns in two to three years.”

The CFO is also confident about the medium term and sees the company back on growth next year.

He identifies the execution challenge as being the following: win new business, deliver it, and complete the sale of its datacentre arm to Stellanor Datacenters Group for £127m.

“The datacentre sale is transformational. It de-risks the MSP business,” he adds.

“EBITDA growth hasn’t yet translated into cash conversion, which will improve as the business becomes less capital-intensive and financing costs fall.

“It all strengthens the MSP proposition and allows reinvestment.”

In an effort to refocus on its MSP division, Senecal de Fonseca has reshaped the company’s growth strategy.

“When we analysed market growth areas - cyber, cloud, AI and automation - we focused on the domains where we already have capability but need to go deeper,” she tells CRN.

“This includes fully integrating our security portfolio, selective investment in compliance-led services, expanding our public cloud services, building controlled AI ‘sandbox’ environments for public sector customers and doubling down in healthcare, where we have strong momentum.”

After taking the helm of the MSP in May, she came face to face with an “old-school go-to-market motion,” the CEO explains.

“It was just direct salespeople - no new-logo team, no diversified routes to market.

“Upsell and cross-sell only take you so far. To truly grow, you need more paths to market.”

Redcentric now counts a new-logo team, which arrived in Q2.

By FY28, it expects fresh customers to account for around 15 per cent of earnings.

In terms of technology moving forward, out of the company’s three core specialist areas - cloud, connectivity and communication -, she sees cloud and cybersecurity as having the highest growth rate, while connectivity and communications remain stable.

The organisation is also working on building the right ecosystems with strategic partners.

To do so, it has mapped out its supplier base to understand which ones can become true partners, and which ones it can create joint solutions with.

Expanding partner base

The CEO intends to consolidate relationships with vendors including Broadcom-VMware, with which it has a “unique” relationship.

It also works with Fortinet and does “a lot of SD-WAN implementation” with the organisation.

“We’re even taking business from some of the global systems integrators who aren’t executing well,” adds Senecal de Fonseca.

While the firm historically did not work with distributors, it now has a relationship with Arrow and is building its go-to-market motion with the organisation.

It is also in discussions with Ingram.

This interest in working with disties is part of the company’s strategy to expand its routes to market and work more closely with partners.

The organisation currently serves 1,500 customers, with healthcare being its deepest public sector vertical.

Because of other factors, such as sovereignty, compliance and data-handling requirements, it is also resilient in private sectors including pharmaceuticals, life sciences and pharmacy-related retail.

She notes that broader retail and legal services are important sectors as well and sees increasing opportunities in defence looking ahead.

Customer base and leadership reshuffles

To serve these clients, the firm employs 491 employees across the UK, as well as another 100 in India who handle testing, first-line support, software development and other functions.

While Redcentric is a UK-centric entity, it does sometimes deploy globally for some accounts.

The CEO adds that since her appointment, the company has hired a new head of marketing, a new CRO as well as a CISO joining this month.

“We’d never had a CISO before,” she highlights.

“Given the critical nature of security, we must model the same standards we expect customers to meet.

“We’ll also fall under the new cybersecurity bill next year, meaning MSPs delivering critical infrastructure will face tighter regulation.

“We’re making sure we’re prepared.”

Ratcliffe also joined in August this year.

Future M&A?

Regarding investments, the company does not intend to make any until the datacentre sale is finalised and the balance sheet is reset.

“There will be no acquisitions during FY27; the organisation needs time to stabilise and invest in its foundations,” explains Senecal de Fonseca.

“The focus is organic execution for the next 18 months.”

Once the completion is done, security is where buyouts would make the most sense, explains the CEO, as some UK MSSPs that have overinvested are in fragile financial positions and have capabilities that could complement Redcentric’s.

She adds that while former investments have helped develop of strong security offering, it is currently siloed and needs tighter integration, which is what the company will focus on for now.