Redcentric's recurring dream as sales near £100m

InTechnology acquisition and rise in recurring revenues bolster AIM-listed MSP's full-year results

Redcentric claims its mission of becoming the top managed service provider (MSP) for the UK mid-market is on course after a combination of acquisitive and organic growth propelled its turnover towards the £100m mark in its full-year 2015.

Driven partly by the first full-year contribution of 2013 acquisition InTechnology, revenues rose 62 per cent to £94m, while adjusted EBITDA doubled to £21.4m.

The AIM-listed firm said the strength of its recurring revenue base – which grew from 71 to 81 per cent of total sales – was a "particular highlight" of the performance, while organic growth hit eight per cent, which it put down to low customer churn.

Created in 2013 through the fusing of bits of Redstone and Maxima, Redcentric positions itself between the giant SIs and network operators and small MSPs it claims "lack delivery structure, reliability and financial strength".

"We are progressing well in our aim to become the preferred IT managed services provider to the UK mid-market," said Redcentric chief executive Tony Weaver.

"We have considerable momentum in the business and I look to the future with confidence."

Since year end, Harrogate-based Redcentric acquired Calyx Managed Services for £12m, the integration of which it expects to be completed by 31 September and will keep it off the acquisition trail for the next few months at least.

"The Calyx acquisition was financed by a new, long-term bank facility, which provides us with the flexibility to consider further acquisitions in the future," said non-executive chairman Chris Cole.

"However, our current focus is on integrating Calyx and ensuring its customers gain benefit from the enlarged group, along with the continued drive to maximise organic growth."

Analyst Megabuyte said Redcentric, which operates datacentres in Reading, Harrogate, London and Cambridge, is now one of the UK's larger independent managed data and network service providers.

"In a world of increasing complexity, as businesses increasingly combine IT and comms infrastructure and services, Redcentric should be well placed given its ownership of networks, datacentres and a wide range of services stretching all the way up to application hosting and management," Megabuyte said.