Gamma Communications PLC has released a trading update for the year ended 31 December 2023, reiterating expectations for healthy year-on-year growth in both adjusted EBITDA and adjusted EPS. The UK business demonstrated robust financial performance, with both the Gamma Business and Gamma Enterprise units delivering similar margin and volume trends as shared in the 2023 interim results. The company expanded its UCaaS offering through new external partnerships and internal software development, including a deeper long-term partnership with Cisco and a unique UK partnership with Ericsson-LG. The Gamma Enterprise unit secured significant contract wins, including UK wide SD-WAN solutions and a Microsoft Teams implementation with a Contact Centre as a Service overlay. The European business also saw improved financial performance, with the German and Dutch businesses combined under a single leadership team and the Spanish business experiencing CCaaS-led growth following the successful integration of the Neotel business acquired in 2022.
Gamma Communications PLC underwent a restructuring exercise in late 2023, impacting around 5% of the group's workforce, and the company expects to treat the one-off cost as an exceptional item. The closing net cash balance was £134.8m, demonstrating continued high cash generation from operations. The company achieved a sizeable £42.3m net cash increase year-on-year, even after accounting for the cash outflow for two acquisitions and the payment of dividends to shareholders. The Board expects to announce results for the year ended 31 December 2023, including an update on the Company's approach to capital allocation, on Monday 25 March 2024.
Andrew Belshaw, Chief Executive of Gamma Communications PLC, expressed satisfaction with the positive results and highlighted the company's high cash generation, self-funding of bolt-on acquisitions, and strong position for continued growth in 2024. He also mentioned the partnerships with global tech giants, the strong European financial performance, and the ongoing projects to enhance the company's capabilities. The latest known sell-side analyst estimates for the full year ended 31 December 2023 are adjusted EBITDA £113.8m - £116.0m and adjusted EPS 74.2 pence - 77.4 pence. The company's capital expenditure remained within guidance, and the Board expects to provide an update on the Company's approach to capital allocation in the upcoming results announcement.