Adept 'frustrated' by revenue decline in H1

Private sector customers 'cushioned' firm from the full impact of the pandemic in H1

AdEPT has seen its revenue drop over seven per cent for the first half of its fiscal year.

The comms provider's turnover fell to £28.5m for the six months ending 30 September 2020 while its EBITDA fell 15 per cent year-on-year to £5.2m, according to a trading update.

Recurring revenue contributed 78 per cent of the total revenue, marking a three per cent increase on last year's figure.

AdEPT's H1 was impacted by some customers downsizing their services, delaying projects and closing down which caused the firm to make use of the government's job retention scheme, furloughing 70 of its 300-strong workforce, according to chairman Ian Fishwick.

Its senior management team also elected not to take a bonus during this period and not to pay a dividend, he added.

"The September 2020 interim results have been adversely impacted by some customers downsizing the services they take from AdEPT and the delay of projects as customers pause and evaluate the impact of the pandemic on their businesses," he stated.

"The inability to conduct a range of project work on-site also had an impact on H1 finances as AdEPT technicians were unable to gain access to customer premises during lockdown to conduct work. As a result, AdEPT has made use of the government Coronavirus Job Retention Scheme (furlough) scheme.

"The revenue decline of 7.6 per cent to £28.5 million, whilst frustrating for a business that has continuously grown year-on-year for 17 years, still marks a creditable performance in the face of the pandemic challenge."

AdEPT's public sector sales accounted for 45 per cent of its overall H1 revenue and "cushioned" it from the impact of the pandemic on private sector customers.

The second lockdown continues to make forecasting for the year a challenge but it highlights the need for digital transformation, as well as the reliance on unified comms and connectivity, which "provide strong tailwinds" for AdEPT going into 2021, the chairman noted, adding that it will not forecast the remainder of its fiscal year.

"We remain reticent to publish guidance for the full year given the ongoing uncertainty," Fishwick continued.

"However, we continue to be encouraged by the key indicators of; new order intake, project delivery, cash collection and operational effectiveness which bode well for the remainder of this year."

AdEPT's share price fell as much as 12 per cent this morning on release of the trading update but it has since climbed three per cent.