- Revenue up 12% to £316.6 million
- Interim dividend hiked 14% to 7.4p
- Impressive German performance
Shares in Gamma Communications (GAMA) gained nearly 10% at one point in early morning trading as the business telecoms technology company reported double-digit growth for the half ended 30 June 2025 driven by a strong German performance.
The company, which uses cloud technology in the integrated IT and communications space, posted a 14% year-on-year rise in adjusted EBITDA (earnings before interest taxation depreciation and amortisation) to £70.9 million compared to £62.2 million.
It also confirmed that a share buyback of £45.1 million had been completed in the period, following a £27.3 million buyback in 2024.
WHAT DID THE CEO SAY?
Andrew Belshaw, CEO said: ‘Our German business, bolstered by our recent acquisitions (Starface and Placetel) has performed particularly strongly, while the performance in the UK has been resilient in spite of a continuing challenging macro-economic backdrop for SMEs (small and medium-sized enterprises).
‘We continue to view M&A as a key tool to complement our organic growth. Our robust business model is underpinned by a high recurring revenue base from solutions that are critical to the businesses that use them, strong cash generation and available liquidity.’
GROWTH IN GERMANY, BUT UK CHALLENGING
Traditionally UK-only, Gamma has expanded into Europe over the past few years through sensibly-priced acquisitions, accessing markets in Spain, Holland, and Germany.
Looking forward, Gamma expects continued growth in Germany, and in the UK, it is implementing ‘a combination of growth initiatives and cost reductions to offset some near-term challenges’.
Gamma expects adjusted EBITDA to be in line with the current market expectations for the year ending 31 December 2025.
The current consensus range for full-year 2025 adjusted EBITDA is £139.4 million-£143.1 million and adjusted EPS (earnings per share) of between 89.8p and 93.9p.
Analysts at Berenberg said: ‘Overall, we think there is little risk to full-year 2025 guidance and German trading is positive; we think the focus today will be on the headwinds faced by Gamma’s UK Business.
‘We believe Gamma shares may be weaker today as investors are concerned about the potential impact on full year 2026 (and beyond) in terms of group growth and profitability as a result of continued challenging UK market conditions.’
