Redcentric (AIM:RCN) has told investors it expects earnings (adjusted EBITDA) of approximately £9.1 million for the six months to 30 September, modestly ahead of management expectations and flat against the same period last year, as the London-listed IT managed services provider trades through the aftermath of its data centre disposal.
Revenue for the first half is expected at approximately £63.7 million, down from £66.8 million a year earlier, which the company said is in line with management expectations and reflects a deliberate shift toward higher-margin business alongside customer cancellations and the timing of new contract conversions.
Gross margin improved to 63.1% from 61.6%, while adjusted EBITDA margin rose to 14.3% from 13.6%, trends management attributed to tighter expense control and a focus on quality of earnings over volume.
These figures exclude the data centre business, which Redcentric sold for total cash consideration of £124.90 million in a deal completed on 30 April, with the final completion statement agreed on 18 September including a £9.46 million balancing payment from buyer Stellanor Datacenters Group.
Net debt stood at approximately £5.0 million at 30 September, a marked improvement from the £36.8 million adjusted net debt reported at the end of the last financial year, reflecting the disposal proceeds and the Board's broader deleveraging plan that has included cutting the group's revolving credit facility from £60 million to £30 million.
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The Board said it is confident of delivering full-year adjusted EBITDA of £18.4 million, in line with market expectations.
Redcentric expects to report interim results for the six months to 30 September in the week commencing 7 December, and said those results are anticipated to confirm the resumption of an interim dividend.