Key acquisition helps boost profits at IT group Redcentric

Redcentric said it had successfully integrated Manchester-based Calyx Managed Services, which was bought for £12m earlier this year.

Redcentric’s revenue rose by 15 per cent to £54.0m in the six months ended September 30, and adjusted profit before tax over this period also rose by 22 per cent to £5.0m.

Redcentric, which has its head office in Harrogate, uses technology to ensure clients get maximum value from their IT investments.

The company said that it aims to continue growing the business organically, although the fragmented nature of the market can lead to acquisition opportunities. Eighty per cent of Redcentric’s revenues are from long-term contracts.

Redcentric’s growth strategy includes a commitment to buy loss-making smaller players, and integrate them into the business.

Fraser Fisher, the chief executive of Redcentric, said: “Redcentric has continued to perform well in the first half, with some very impressive contract wins, good sales momentum and the successful integration of Calyx.

“Our focus continues to be on growing our recurring revenue base by providing our customers with market leading services, allowing them to concentrate on their core business.”

Chris Cole, the chairman of Redcentric, said: “These first half results demonstrate the continued growth pattern seen in previous periods.

“The Calyx acquisition and subsequent integration have enabled us to expand our contract base, and demonstrates both the scalability of the platform and the ambition the board has to deliver increasing shareholder value over the com ing years.”

In a statement, the company said: “Following the acquisition of Calyx and the securing of new bank facilities in April 2015, net bank debt has increased to £16.5m.

“The highly cash-generative nature of the business means that this debt can be steadily reduced in future periods.”

The board has announced an interim dividend of 1.5p per share. During the first half of the year, the group won several significant contracts, including Health and Social Care Information Centre (HSCIC), a £3.5m, two-year contract to provide access to Redcentric’s ‘Database-as-a-Service’ platform.

Commenting on the outlook, the company said: “The opportunity for growth through both organic and acquisitive means is significant, and the board looks to the future with confidence.

“This has been a period of excellent progress for the company, and the board would like to thank all of the staff and management for their hard work.”