Gamma announces positive results for 2020 with solid organic growth in the United Kingdom, supported by strategic acquisitions in EuropeGamma Communications plc ('Gamma' or 'the Group'), a leading provider of Unified Communications as a Service (UCaaS) to the corporate market in the United Kingdom (UK) and Europe, is pleased to announce its 2020 annual results.
Year ended December 31
2020
2019
Change (%)
Revenue
£ 393.8m
£ 328.9m
+ 20%
Gross profit
£ 200.8m
£ 166.5m
+ 21%
Gross margin
51%
51%
Profit from operations
£ 75.7m
£ 45.5m
+ 66%
Adjusted EBITDA
£ 79.0m
£ 63.5m
+ 24%
PBT
£ 75.0m
£ 45.2m
+ 66%
Adjusted PBT
£ 61.7m
£ 48.1m
+ 28%
EPS (Fully Diluted, “FD”)
66.6p
36.1p
+ 84%
Adjusted EPS (FD)
51.3p
40.8p
+ 26%
Total dividend per share
11.7p
10.5p
+ 11%
Cash generated by operations
£ 70.3m
£ 54.0m
+ 30%
Cash generated by operations / adjusted EBITDA
89%
85%
Cash and cash equivalents (gross cash)
£ 53.9m
£ 53.9m
0%
All adjusted measures set out above and throughout this document which are described as “adjusted” represent Alternative Performance Measures (“APMs”) and are presented separately within the statement of profit or loss or reconciled in the Financial Review section or segment note and are applied consistently. Where reference is made to adjusted EPS this is stated on a fully diluted basis. Definitions of APMs are included in the Financial Review - within the adjustments is the gain of £ 19.5m made on the sale of the Group's non-core business which traded as “The Loop”. Our policy on the use of APMs is included in note 2.
Main Highlights
The Group achieved good financial results for all business units with growth for all major product categories during the year. The impact of COVID-19 on the company's overall financial performance is limited; Cancellations and bad debts remained at the normally low pre-COVID-19 levels.
Financial highlights
All business units continued to perform well:
Revenues were up 20% from £ 328.9m to £ 393.8m.
Organic growth for the period was 9% (from £ 328.9m to £ 357.6m for the whole Group). Organic growth was slightly lower than originally expected due to lower sales in the second quarter caused by the COVID-19 pandemic; sales activity returned to pre-COVID levels in the second half of the year. (NB. Organic growth excludes the results of acquisitions in 2020).
Recurring monthly revenues increased from £ 306.9m in 2019 to £ 359.3m in 2020.
European Business saw its gross profit increase from £ 9.2m in 2019 to £ 22.3m in 2020, mainly due to the acquisitions of Voz Telecom (April 2020), HFO Holding (July 2020) and gnTel (July 2020).
Acquisitions
We have continued to execute our strategy of targeted acquisitions, which will enable us to both strengthen our UCaaS product offering and expand our European footprint.We have expanded our product range and our footprint as follows:
In February 2020, we acquired Exactive Holdings Ltd ('Exactive'), a specialist in unified communications (based in the UK and Poland) with expertise in Microsoft Teams. It complements our UCaaS offering as it enables the configuration of Microsoft Teams as a full UCaaS solution for our enterprise customers
In March 2021, we acquired Mission Labs Limited ('Mission Labs'). Mission Labs provides expertise and production capacity in the Cloud Contact Center-as-a-Service ('CCaaS') market. It also has a solution for the smallest business users called Circle Loop, which is sold digitally.
We have expanded our presence in Europe through three acquisitions:
In April 2020, we acquired VozTelecom OIGAA360, SA ('Voz Telecom'), an established cloud communications service provider in Spain, which will provide us with access to the emerging Cloud PBX market in Spain.
In July 2020, we acquired a majority stake in HFO Holding AG ('HFO') in Germany. HFO is a leading provider of SIP Trunks in Germany and has recently started selling Cloud PBX products.
In addition, in July 2020, we acquired gnTel BV ('gnTel'), a Cloud PBX provider in the Netherlands and Germany.
Andrew Taylor, Chief Executive Officer:“We delivered good business and financial results for 2020, with both our UK and European businesses continuing to develop and grow. We have started the successful expansion of our European presence and are working closely with local management to accelerate our growth in Cloud PBX in Europe.Despite the COVID-19 pandemic, our result was positive and we were able to further strengthen our market position through the development and launch of new products and services. Over the past year, we intensified the implementation of our UCaaS strategy, which is well on track, by expanding our geographic footprint and further developing the service offering. As always, we will continue to strengthen it further in all markets, with a focus on reliable support for our partners and customers. ”Read the complete Gamma Annual Report and Annual Accounts 2020
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