Redcentric 'switches focus to growth' following string of acquisitions

The group has released a trading update for its preliminary financial results for the year ending 31 March 2022

Redcentric has said it is switching its focus from integration to growth as it published its latest financial results.

The group has released a trading update for its preliminary financial results for the year ending 31 March 2022.

Figures show total revenue growth of 3.2 per cent to £93.3m over last year, with recurring revenue growing by 2.6 per cent to £83.0m.

Redcentric says its adjusted EBITDA of £23.7m is marginally behind (0.6 per cent) FY21 "reflecting the challenges caused by increased electricity prices".

The IT managed services provider completed two acquisitions during FY22 - Piksel Industry Solutions Limited and 7 Elements - and says both are trading well and have been quickly integrated into the business with "higher than anticipated synergy savings already delivered".

It added a new divisional operating structure was also introduced subsequent to the balance sheet date to "drive focus and growth across all divisions".

During the post period to FY22, Redcentric also completed its acquisitions of Sungard data centre assets and 4D Data Centres Limited.

Peter Brotherton, CEO, said: "In the last twelve months we have delivered on the acquisition strategy as outlined in last year's annual report and accounts. During this period, five acquisitions were completed which have transformed the company.

"The Piksel, 7 Elements and Sungard consultancy business acquisitions have all added significant capability in the high market growth areas of hyper-cloud and cyber security. The Sungard DC and 4D acquisitions bring considerable additional scale with a clear path to significantly increased scale over the next two years."

Redcentric says the preceding three years have been spent focussing primarily on delivering integration, optimisation and efficiency programmes to ensure that there is a "solid and scalable" foundation for future growth.

It says it spent the last six months implementing a structure that can deliver is "ambitious growth strategy".

"As the business now switches focus to growth, the organisational structure also needs to adapt to deliver sustainable and profitable growth," the company said.

"To that end, the last six months have been spent designing and, post year end, implementing an organisational structure that can deliver the company's ambitious growth strategy, by providing the level of focus required across the key revenue streams of cloud, networks and collaboration products."

Brotherton said: "Our focus will now switch to fully integrating the recently acquired businesses and exploiting the meaningful cross-sell opportunities and synergies that these acquisitions bring to Redcentric. At the same time, we will continue to monitor potential targets and should a suitable opportunity arise, our solid balance sheet, strong cash generation and access to £66m of undrawn bank facilities will enable us to react swiftly.

"We look forward to capitalising on the very significant opportunities that come with the recent acquisitions and to an exciting future."