Maintel confident of Avaya business recovery in 2018

AIM-listed VAR sees revenue lift 23 per cent and gross profit spike 11 per cent in 2017 results

Maintel has posted its 2017 results and insisted that its Avaya business is recovering after the vendor had a troubled year.

The cloud and managed services provider reported that group revenue increased 23 per cent to £133.1m for the 12-month period to 31 December 2017.

Group gross profit increased 11 per cent from £34.9m in 2016 to £38.8m in 2017.

The results include a full 12-month contribution from Azzurri Communications and five months of Intrinsic Technology, which it acquired in August.

Last year was a rocky one for vendor Avaya after it entered a Chapter 11, a process it has since left, resulting in an uplift in orders according to Maintel's CEO, Eddie Buxton.

"The group has seen customer orders for Avaya installations recover through the initial months of 2018, with a promising pipeline developing, which is expected to have a positive impact on managed services and technology revenues in 2018," he said.

Maintel also reported an acceleration in the rate of adoption of its cloud products and services, with ICON Communicate contracted cloud seats up 80 per cent on the prior year.

It also claimed to have had increased success on public sector network services frameworks, winning 24 new contracts in 2017.

"Following the challenges faced in 2017, notably prolonged delays with several large projects, the group has entered 2018 well placed to capitalise on future growth opportunities," said Buxton.

"In addition, we are seeing good growth across our suite of ICON cloud services, which is very encouraging, as Maintel cements its transformation to a cloud and managed services provider in the mid-market and enterprise space."

Buxton said the acquisition of Intrinsic adds to Maintel's capability in LAN networking and the network security sector, with the firm "seeing encouraging cross-sell into our existing customer base".

"We remain committed to maximising shareholders' returns while reducing net debt and maintaining a strong balance sheet. Moving forward, it is our intention to return to a dividend payout ratio of at least 40 per cent of adjusted net income," he added.

"Based on our confident outlook for the business, it is our expectation that the total dividend paid annually will remain progressive in absolute terms."