Iomart Group (AIM:IOM), the AIM-listed secure cloud managed services provider, reported an adjusted pretax loss of £4m for the full year ended 31 March, against a £6.5m profit in the prior year, as elevated customer churn and a shift toward lower-margin Microsoft-related services weighed heavily on profitability.
Revenue rose 8% to £154.9m from £143.5m, but that headline growth masked an organic decline of 8%, with the reported increase entirely attributable to a full-year contribution from the Atech acquisition completed in October 2024.
Adjusted EBITDA fell to £25.6m from £34.3m, with the adjusted EBIT margin compressing to 3.3% from 8.9%, though the second half showed modest sequential improvement, with EBIT margin recovering to 3.9% from 2.8% in the first half.
Customer churn of £21.2m in annualised recurring revenue exceeded gross order bookings of £20.6m, with the final quarter particularly damaging at £8.4m of churn, concentrated in Microsoft Modern Work offerings and the last legacy backup platform customers.
The statutory pretax loss narrowed sharply to £13.6m from £53.2m, the prior year having absorbed a £52.9m goodwill impairment that did not recur.
Net debt rose to £108.6m at 31 March from £101.9m a year earlier, though cash conversion strengthened, with adjusted EBITDA converting to operating cash flow at 96% against 85% previously. The group extended its £115m revolving credit facility to June 2028 following the period end.
For FY27, the board expects a modest full-year revenue decline but anticipates an improved profit profile in the second half, supported by cost actions and higher-value service mix, with the April 2027 Broadcom VMware licensing deadline cited as a potential pipeline catalyst.
"Our focus for FY27 is clear, to rebuild growth momentum in higher-value cloud, security and data protection services," said Executive Chair Richard Last.
