AdEPT revenues surge but pre-tax losses widen on Datrix acquisition and restructuring costs

Sales and underlying EBITDA rise on impact of Datrix acquisition but related costs contribute to pre-tax losses

Unified comms and managed services provider AdEPT saw its pre-tax losses widen to £3m for the full year ending March 31 after a recent acquisition and restructuring costs left their mark.

The AIM-listed company's revenue swelled by 18 per cent to £68.1m, while underlying EBITDA jumped 21 per cent to £11.9m, buoyed by the acquisition of SD-WAN, cloud and security provider Datrix in April last year.

1.6 per cent of the growth in underlying EBITDA was organic, AdEPT said.

But fees related to the acquisition of almost £1.4m contributed to a pre-tax loss of £3m, along with restructuring costs of just over £2m. Amortisation costs amounted to £7.2m while depreciation added up to £1.4m in losses, which included investment in its Nebula platform.

Adjusted fully diluted earnings per share, meanwhile, increased 23 per cent to 27.5p, and CEO Phil Race praised the company's results in the face of economic and supply chain challenges.

"The board is pleased with the progress achieved during the year under review and the group's performance in the face of the many, well-documented macro challenges," he said.

"Given our focus on this aspect of our business the pro-forma organic growth in cloud centric strategic services is a particular highlight of the period.

"The acquisition of Datrix in April 2021 significantly extended the group's capabilities and enabled AdEPT to increase its potential wallet share in the ever-expanding ICT space.

"The introduction of new partnerships and services that allow AdEPT to tap into the fast-growing markets of software-defined wide area networking (SD-WAN) and secure access service edge (SASE) is leading to significant sales successes.

"Our newly developed ONE AdEPT platform enabled the rapid integration of the Datrix business, ahead of plan, and has created an efficient business with a strong infrastructure for growth."

Among the biggest successes of the year were in AdEPT's Cloud Centric Strategic Services division, where revenue increased by seven per cent on a pro-forma organic revenue basis.

The Microsoft, Google Cloud and Extreme Networks partner says its efforts to migrate customers to the cloud have continued to pay off with traditional telephony now making up just 13 per cent of its overall revenue.

The company has also completed its reorganisation efforts under what it calls Project Fusion, moving from five divisions down to two. The creation of ONE AdEPT, meanwhile, will provide a "single set of financial and operational systems and a scalable platform for growth" which will benefit the business moving forward, it claims.

AdEPT added that its momentum in Q4 for FY22 has continued into Q1 for FY23 and expects demand to rise as clients "continue to assess their long-term ICT requirements".