Shares in Glasgow's iomart fall 20% after dividend scrapped

The Herald Scotland

25-07-2025

However, the company underlined a strong performance by Atech Cloud, the Marlow-based business it acquired for £57m in November. Iomart said at the time that the acquisition, which increased its headcount to 650, would significantly strengthen its position as 'one of the UK's principal providers of secure cloud services across public, private, and hybrid environments'. A six-month contribution from Atech helped to deliver a 13% rise in revenue to £143.5m for iomart over the period.
Net debt at iomart surged to £101.9m from £42.3m at the same stage last year, following cash outflow of around £57m associated with the Atech deal.
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Richard Last, executive chairman of iomart, said: "The year has been one of both challenge and transformation for iomart. The group's trading performance was mixed, with customer churn impacting revenue and profits. On the positive side we have seen good order bookings growth in the year, which gives the board confidence in achieving our medium-term growth strategy.
"The acquisition of Atech during the year was a significant milestone, substantially enhancing the group's scale, credibility, and capabilities in public cloud and security. Since acquisition, Atech has delivered revenue growth and profitability in line with our expectations, reinforcing the value of this strategic move.
"Our focus for FY26 will be to improve the operating efficiency of the group, address churn in our self-managed and private cloud customer base, increase sales momentum in high-growth service areas, including providing Atech with the support to flourish, and to reduce our level of debt. The board is committed to delivering disciplined execution, operational efficiency, and improved value for shareholders.'
On the decision to suspend dividends, the company stated: "The board believes it is in the best interest of shareholders to forego the payment of a final dividend, with future dividends restored based on improved operating profitability and a reduced overall level of indebtedness."
Iomart reported a statutory loss before tax of £53.2m, reflecting a £52.9m non-cash exceptional goodwill impairment charge relating to the iomart Cloud Services Cash Generating Unit. Iomar said in a statement: 'This reflects both the shift away from low growth, heritage product areas and the previously disclosed accelerated customer churn in certain areas of this CGU.
'This non-cash charge has no impact on the group's operational performance or cash flows but does result in a large statutory loss after tax of £55.1m in the year to 31 March 2025 (2024: £6.4m profit).'
Shares closed down 22.8% or 6.5p, at 22p.