Iomart update doesn’t inspire market confidence

The price of shares in AIM-listed cloud computing specialist Iomart (LON:IOM) has dropped by 3.90% to 345.95p (as of 12:55 GMT) as adjusted pre-tax profits for the six months ended 30th September fell by 8%. Revenues for the period were up by 8% due to a substantial increase in organic demand, but a shifting revenue mix and major investments pulled down profits.

CEO Angus Mac Sween said: “The positive trading performance from the Group reflects the investment we are making in our sales engine which has delivered significantly more business from new customers than the comparable period. We have also seen an increasing level of larger, more complex enterprise contract wins, whose revenue will start to be recognised in the second half of the year and beyond.

“This momentum, combined with high levels of visibility within our recurring revenue business model gives increasing confidence that we are on track for an improving trend in our organic growth. In addition, we continue to see opportunities to enhance this growth through acquisitions. With a wide portfolio of managed cloud services, we are confident in our ability to capitalise on the significant and sustainable market opportunity ahead, underpinning the Group’s long-term prospects“.