Comms VAR targets M&A as cloud revenue surges

Revenue declines following pressures on traditional mobile market

High Wycombe-based Olive Communications is embarking on a period of M&A and growth activity after seeing its cloud revenue surge.

For the year ending 31 January 2019, Olive saw overall sales drop 7.6 per cent to £28.9 in the midst of pressure in the mobile space.

Cloud sales however rose 20 per cent to £14m - equating to 48 per cent of total revenue.

In its financial report, Olive said that the decline in mobile sales, contributed to by the changes to EU roaming charges, "masks the top-line growth of cloud".

Martin Flick, CEO at Olive Communications, said: "These are exciting times for Olive. With revenue rising Olive is set to embark on a period of growth in the UK and globally.

"We're now in a strong position to consider further expansion opportunities and M&A activity to enhance our capabilities even more, and to develop our proposition to the benefit of our growing list of customers."

Olive said it saw a number of key wins in the year, including that of a leading retailer with 800 stores and 10,000 members of staff.

EBITDA rose 43 per cent year on year to £2.1m.

Olive CFO Brett Morris added: "Our cloud services are going from strength to strength, delivering high recurring revenues plus associated project and implementation revenues.

"This continued growth in cloud services, supported by Vodafone encouraging mobile-only users to adopt OneNet unified comms, together with a better year for mobile means we expect revenues to return to growth in the current year to January 2020.

"EBITDA margins are set to continue to expand, which all points to continuing EBITDA growth for the current year."