Schroders Investment Management has acquired a 7% stake in Scottish cloud computing company Iomart.
The asset manager bought 8.4 million shares from Liontrust Asset Management, its entire holding in the AIM-quoted business.
The transaction took place earlier this month, after the acquisition of English firm Atech. It emerged after Iomart announced flat revenue in the first half in line with expectations, and a target of £1m in annualised cost savings by the end of its financial year.
The Glasgow-based company, which is quoted on AIM, said the period had been challenging, though order bookings in the half year are at record levels, being around 30% ahead of the same period last year.
The post-period acquisition of English firm Atech will accelerate its progress as a cloud services provider, it said.
Speaking to Daily Business about the shares transaction, chief financial officer Scott Cunningham said: “We don’t read too much into it.”
Chief executive Lucy Dimes said the acquisition of Atech, which is about a quarter of the size of Iomart, was a “shot in the arm” for the company which will extend further into growth markets.
She said it would “catapult us into an exclusive club.” She did not rule out further acquisitions. “I would not say no to small bolt-ons with specific capabilities,” she said.
Income for the six months to the end of September came in again at £62m of which 91% was recurring revenue (H1 2024: 94%).
Adjusted EBITDA and adjusted profit before tax decreased to £17m (H1 2024: £18.6m) and £4.3m (H1 FY24: £7.6m), respectively.
Shares in the company have drifted their 12-month high of 166p and closed 3p lower at 91p.
In her statement with the results, Ms Dimes said: “The Atech acquisition is a key step in delivering our Bigger, Better, Bolder strategy.
“The strength of the combined business, our order bookings momentum and the transformation and efficiency programmes we have put in place, mean we have entered the second half of the year in a considerably strengthened position.
“Our enlarged group and combined skills will allow us to compete more robustly with enhanced services, greater scale and references across the growth areas of our industry.
“Through the combined power of Atech and iomart, we now have the accreditations, credentials and capabilities to convert a greater proportion of our sales pipeline, as well as unlock increased cross-sale opportunities.
“The growing demand for cloud computing and cyber security solutions, increasing complexity of the technical landscape, and accompanying need for a trusted and highly accredited partner with a strong delivery track record, give the board confidence in the outlook for the group and our ability to become the UK’s leading secure hybrid cloud provider.”
