Gamma Communications PLC Trading Statement (9909E)
10 July 2019 - 4:00PM
UK Regulatory
TIDMGAMA
RNS Number : 9909E
Gamma Communications PLC
10 July 2019
10 July 2019
Gamma Communications plc
Pre-close trading update
Strong first half performance
Gamma Communications plc ("Gamma"), a leading technology-based
provider of communications services primarily to the UK business
markets, is pleased to announce a trading update for the six months
ended 30 June 2019.
Group overview
We are pleased to report that Gamma has continued to perform
well through the first six months of the year. Based on the first
half performance, management expects revenue to be within the range
of market expectation and the EBITDA and EPS for the full year are
expected to be slightly above the range of market expectations.
Some of the highlights from the period include:
-- The group launched Collaborate in March bringing additional
features to the core Horizon product. The reception in the market
has been positive.
-- Cloud PBX sales have performed well in the period with good
sales momentum going into the second half of the year. This market
continues to attract new market entrants which - in the longer term
- may increase competitiveness.
-- The Indirect Channel business has signed commitment deals
with several Channel Partners - Focus Group (for data), Daisy
Group's retail business (for Cloud PBX) and Onecom (Cloud PBX).
-- Our Direct business has been awarded numerous new multi-year
contracts across Enterprise including Hidden Hearing (WAN), Hogg
Robinson Group (SIP) and Bourne Leisure (Mobile). The Public Sector
team has had wins with H.M. Land Registry (network services) and
NHS Lanarkshire (SIP).
-- We have implemented the first phase of our digital
transformation program in our Direct business. This provides our
customers with an enhanced service and support experience.
-- Our Dutch business is now an established part of the group
and has performed in line with management's expectations - sales of
Cloud PBX seats increase and the traditional business (ISDN) has
declined compared to the same period in the prior year.
-- The Board continues to appraise acquisition targets in
Western Europe where such an acquisition would provide the group a
channel to sell UCaaS products to a larger geographic market.
Cash
Gamma continues to have a very robust balance sheet, with strong
cash generation from its trading activities. Cash conversion from
EBITDA is anticipated to be in line with previous levels and the
closing cash balance for the half year is approximately GBP44.6m
compared to GBP35.5m at the end of the previous year. The Directors
expect to propose an interim dividend in line with the stated
progressive policy.
The Board expect to announce results for the half year ended 30
June 2019 on Tuesday 3 September 2019.
Andrew Taylor, Chief Executive, commented on the results:
"I am delighted to announce that in the first half of 2019 we
have continued to deliver strong revenue and gross profit growth
across all business areas, representing a positive performance. I
am very pleased with our continued focus on delivering against our
near-term commitments, balanced against the execution of our
longer-term strategy which was outlined at our capital markets day
in January."
Gamma Communications plc Tel: +44 (0) 333 006 5972
Andrew Taylor, Chief Executive
Officer
Andrew Belshaw, Chief Financial
Officer
Tulchan Communications LLP Tel: +44 (0) 207 353 4200
James Macey White / Matt Low
Investec Bank plc (NOMAD & Tel: +44 (0) 207 597 5970
Broker)
Patrick Robb / Neil Coleman
Andrew Pinder / Sebastian Lawrence
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END
TSTGMGGNKLVGLZM
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