(Alliance News) - Redcentric PLC on Tuesday said its revenue had increased by 52% over the financial year with higher adjusted earnings, despite higher than expected costs and a large net debt increase.

The Harrogate-based IT service management company said revenue had increased by 52.0% in the financial year ended March 31, to GBP141.8 million from GBP93.3 million the previous year.

Redcentric said adjusted earnings before interest, taxes, depreciation and amortisation increased by 4.6% over the same period to GBP24.8 million from GBP23.7 million.

However Redcentric's net debt increased to GBP35.5 million at March 31 from GBP1.5 million at the same time a year prior.

Redcentric said the results reflected higher than anticipated electricity costs of GBP1.7 million and software license costs of GBP700,000. Redcentric said the high software license costs were caused by Sungard Availability Services Ltd incorrectly reporting platform usage and under-reporting license consumption before its acquisition by Redcentric.

Redcentric said the sale of its Elland data centre, anticipated for December, did not complete. Its Harrogate data centre will be closed instead with equipment transferred to Elland by the end of the current financial year.

Redcentric said it commences this financial year with annualised revenues of GBP160.0 million and adjusted EBITDA of GBP29.0 million. It will focus on completing the integration of its recent acquisitions and intends to further reduce electricity consumption through investments such as new cooling infrastructure at its Heathrow data centre.

Redcentric said it has "locked in" electricity prices for the whole current financial year and so will not be subject to commodity price volatility.

Chief Executive Officer Peter Brotherton said that "The last two years [had] been transformational for the company."

He added: "Due to the very significant and complex nature of the synergy programmes, which were reflected in the consideration paid for the acquisitions, the boost in profitability will not be fully realised until FY25. However, we are confident of achieving long term EBITDA margins close to or in line with our stated target of 25% once the integration programmes have been completed and fully reflected in the cost base.

"Given the broader product offerings, the enlarged customer base, and the integration programmes currently underway, I am extremely confident in the outlook for Redcentric."

Redcentric intends to announce its results for the financial year ended March 31, 2022, on July 19.

Shares in Redcentric were down 3.0% at 113.50 pence in London on Tuesday.

By Emma Curzon, Alliance News reporter

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