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AIM-listed managed IT services provider AdEPT Technology Group (LON:ADT) has seen its share price drop by 9.24% to 328.55p (as of 14:50 BST) despite revenues climbing by 11% during the year ended 31st March. Pre-tax profits for the year fell by 46% due to a mix of non-recurring payments from the previous year, acquisition costs, and increasing financing and amortisation costs.
Chairman Ian Fishwick commented: “AdEPT has delivered an 11% increase to revenue, gross profit and underlying EBITDA for the year ended 31 March 2019. The highly cash generative business model of the Group, with 79% of pre-tax cash flow conversion from reported EBITDA, has funded a 12% increase to dividends declared during the year and the Board is confident that continued focus on underlying profitability and cash generation will support a progressive dividend policy. The Group continues to operate a capital light asset model, with only 1% of revenue strategically invested in the capital development of the AdEPT Nebula proposition during the year, which has extended the AdEPT Nebula product portfolio to incorporate IP cloud telephony services, hosted IT services and a range of data connectivity services.
“Free cash flow generated combined with the extension of the debt facility during the year was used by the Company to complete the earnings enhancing acquisitions of Shift F7 Group Limited and ETS Communications Limited. The acquisitions completed during the year combined with organic sales have increased the proportion of Group revenue derived from managed services accounting for 75% of the total in the year ended 31 March 2019“.