I usually tend to steer clear of service based companies operating in sectors impacted by rapid technological and commercial changes but I think the experienced management at Iomart has proven that they are able to cope, indeed profit, from this type of environment. I also like the impressive profit margins, reasonably good ROCE and global growth prospects so, admittedly rather late, I have joined the shareholder register as I think there is still plenty of growth potential.
Ian Forrest, investment research analyst at The Share Centre, picks cloud computing consultancy firm Iomart as stock of the week.
AIM-listed group Iomart has been involved in cloud computing long before cloud computing became fashionable. It is one of the UK's leading companies in an industry that is expected to grow fairly rapidly as businesses and consumers generate more data and become comfortable with having that data located offsite.
Essentially, Iomart facilitates data hosting services so that clients and the end user can have access to data and web services in a secure manner while reducing costs and complexity and investors should recognise that the group expects the creation of data to be exponential for some years to come.
Last week, the group reported its half year results in which it stated that revenues were up 12% on the same period last year, coming in at £47m, while adjusted pre-tax profits rose by 9% to £11.6m. Despite the numbers falling slightly short of expectations, the shares rose on the back of the announcement and, in general, the shares have made steady progress over recent years helping cement our belief that the long-term prospects have not fundamentally changed.
This is a business which is operationally geared, and it can take more business for relatively little cost. The group has partnerships and programmes with some of the largest computing businesses in the world such as Microsoft and Dell and thereâs further promise in regards to hosting government departments and the continuation of targeting small acquisitions. As a result of all of this, as well as rising dividend payouts, we continue to recommend Iomart as a "buy" for investors looking for capital growth and willing to accept a higher level of risk."
"The Group has enjoyed another good period of trading in the first half of the year, with growing recurring revenues in line with our business model. The market opportunity remains significant and we continue to invest in our skills, infrastructure and capabilities to meet the evolving demands of the market. We are firmly on track to deliver another year of material growth and we remain confident in our prospects."
"Within the overall growth of cloud, eCommerce is one of the fastest growing areas. We have always had an exposure to the online retail market and we are building our expertise in this area to position ourselves as eCommerce cloud leaders."
There's been 3 acquisitions in the last 6 months, and the narrative suggests there will be more given the "comfortable" level of debt.
"Iomart Consultancy SystemsUp Migrates UK Law Firm To Microsoft Azure And Office365
10:50:35 - 08 November 2017
Cloud Consultancy chosen as Technology Transformation Partner by Farrer & Co LLP
LONDON,November 8, 2017/PRNewswire/ --Digital transformation consultancy SystemsUp has been selected by Farrer & Co LLP to deliver wide-ranging technology transformation across the firm using Microsoft Azure
"iomart Launches Private and Hybrid Cloud-in-a-box, Powered by OnApp
Slashes the cost and complexity of on-premises and hosted cloud, with fully managed or self-managed options and a unique 'try before you buy' scheme
Nov 07, 2017, 06:00 ET
Managed hosting and cloud services provider iomart (AIM: IOM) has partnered with OnApp to launch a new cloud-in-a-box solution for small businesses and enterprise IT departments. The new solution combines OnApp Enterprise private cloud software with Intel® hardware to create a turnkey appliance that can be deployed on premises, or hosted by iomart, with self-managed and fully managed options available for each approach. By combining its experience in hosted cloud and managed services, with OnApp's streamlined and intuitive private cloud management software, iomart can deliver private and hybrid cloud that is significantly more cost-effective and easier to manage than other solutions.
The new cloud-in-a-box solution is available now with a unique 'try before you buy' scheme that takes companies from proof-of-concept into production without any additional configuration or migration work. It is designed for companies looking to virtualise and consolidate traditional IT into a more cost-effective integrated appliance; to bring cloud automation and efficiency to their business without requiring an army of technicians; and to simplify the management of workloads across on-premises and hosted cloud infrastructure, using a single, unified cloud platform.
Flattery indeed from PG, but they must be behind the curve if its taken them this long to initiate coverage. Those in the know, realised ages ago this is a solid business in a growing sector.
Proof of ignorance of these scribblers, but apprecated for the extra 5% on the sp today.
"GLASGOW, Scotland, October 6, 2017 /PRNewswire/ --
iomart company Cristie Data has won a five year contract with Stone King LLP to help the national law firm transform the way it protects its data.
Cristie Data will provide Disaster Recovery as a Service (DRaaS) and managed cloud backup to Stone King, enabling the specialist law firm to provide a continuous and high level of service to its valued clients."
And the Naked Trader bought more IOM per last night's report, so could see some more buying interest here from his followers:
"What's not to love about Iomart? (IOM).
It just gradually goes up and made me a packet. And after this week's trading statement I struggle for a reason not to buy more. I couldn't find one.
This cloud computing outfit does everything right. The growth keeps coming and its recent acquisition is bedding in well. To reward shareholders the company has nearly doubled the dividend.
It says cash generation is high. And it has been bid for before, now I think we would be looking at 450p!"
the price here has been firm for months.....
they are very confident of their CASH flow which menas they are very undervalued in this growth market.
initially i thought the pric ewas being hyped to fund the German acquisition but in fact the price has takne that wobble in its stride. despite the very wide spread it is easy to sell volume well inside but much harder to buy in size.
As long as the amrket trend holds i think they can outperform up to as much as 400p.
Thanks for that, researchassist. Bought some extra today at -4.8% on day @ £3.24. Was doing well before that so hopefully make a bit more on them. Small company though so maybe a bit too risky for some.
Its just case of people buying on the rumour and selling on the news. Price should pick up very soon, two brokers have have raised target prices today to 388p and 400p. The results are excellent with very positive comments from the company for future growth.
Seems to have broken out of it's recent trading range upwards by 30p in the last 24hrs, I presume that's on the back of the trading results being reported today https://www.iomart.com/pre-close-trading-statement-year-ending-31-march-2016/
On the Iomart website there is an unknown share trade of £3.9m at 0616 this morning!! There were 2 quite large transactions as well once the market opened so something is stirring. I wonder if there are nods and winks happening about the 'working in the space of Microsoft and Amazon' that Angus talked about when reporting. My radar is on high alert now.
"Prelims to March are in line with the April trading update, bar a significant uplift to the dividend. The Cloud Services division (formerly Hosting) delivered 19% revenue growth (9% organic) with consistently strong adjusted EBIT margins, reduced churn and diminished pricing pressure, while Easyspace delivered consistent revenue at an improved margin. As iomart continues to embrace the evolution of cloud services demands from public and private enterprise, it is now an Advanced Partner of Amazon Web Services, and a key..."
London college already benefitting from lower RPOs and RTOs
Backup Technology (BTL), the iomart company that specialises in online backup & disaster recovery services, has launched ClouDRaaS, a new 'one click' Disaster Recovery service offering cost-effective, automated, DR.
ClouDRaaS from BTL is a disaster recovery service that solves the problem of production-ready DR with one simple click of the mouse. It is based on hypervisor-based replication software from Zerto which does away with snapshots and delivers DR that never impacts performance, with RPOs of seconds and RTOs of minutes.
One of the largest providers of further education in London is already using ClouDRaaS from BTL. Havering Sixth Form College, which has approximately 2400 full-time students, says it has resulted in an improved approach to DR.
Graham Francis, Director of Continuous Improvement at Havering Sixth Form College, explains: "It's given us an enterprise class DR solution for our production infrastructure with a predictable pricing structure. We didn't have to upgrade our network, storage or servers and we are seeing RPOs of seconds, with significantly reduced RTOs achieved during the regular testing. ClouDRaaS fits seamlessly into our existing infrastructure and is delivering extremely high service levels."
ClouDRaaS from BTL offers the following benefits:
Quick and remote deployment - DR within days
One click recovery and rollback of applications
Granular application protection
Certified annual managed invocation testing for compliance
Reliable invocation and testing methodology
Range of options for invocation and connectivity
Replication of any environment regardless of storage vendor or architecture
Simple pricing model
Eliminates the impact of disasters
Matthew Parker, Managing Director, Backup Technology, said: "ClouDRaaS offers that first, safe, step into the cloud by giving you the opportunity to safely evaluate and test the water without having to give up control over production applications in the data centres you are using. It makes effective Disaster Recovery possible within the private cloud, to the public cloud and in the public cloud and because it's based on virtual replication and is storage and hypervisor agnostic, there's no need to worry about availability, performance or scalability."
Sean Casey, Director, Zerto, said: "The global cloud services market is quickly evolving and expanding to include new offerings such as Disaster Recovery as a Service. Cloud service providers have a unique opportunity to help customers overcome inflexible IT infrastructures that are not compatible with disparate technologies because of vendor lock-in. Zerto Virtual Replication is purpose-built to work with any virtualized IT and cloud environment to make it fast and easy to achieve optimal levels of production workload mobility, which is enabling our partners to increase their revenue growth and improve service levels."
BTL is part of UK cloud hosting solutions company iomart and offers backup and Disaster Recovery from a network of Tier 1 data centres, with industry-leading SLAs and the widest range of ISO accreditations. iomart's cloud and backup solutions are certified for connection to public sector organisations via PSN and N3.
For more information read the BTL ClouDRaaS datasheet.
To speak to BTL call 0800-999-3600, email [email protected] or Tweet to @backuptech
About Backup Technology
BTL is one of the leading providers of Cloud Backup and Disaster Recovery solutions. Headquartered in Leeds in the United Kingdom, with offices and partnerships in the U.S., Europe and Australia, BTL's core business is built around its partnership with the world's leading software providers and incorporates Private Cloud, Public Cloud and Hybrid Cloud Solutions for any environment, on and offsite. It is part of UK cloud hosting solutions company iomart (AIM: IOM) http:
I originaly bought into Iomart at the end of 2013 right at their peak and they went down and I sold with about a 15% loss
They continued to drop until early 2015 when they dropped to about £1.67 and have now recovered well.
So going to give them another chance. Including forecasts it has 7 years of double digit growth, good margins and ROCE, and cashflow is well above EPS.
Today I bought 3000 shares at £2.64 totalling £7944, 4% of my portfolio
What I look for when buying a stock
4 years of continual growth which can be a combination of historic and forecast growth Yes
Low Forecast PER (<16) & PEG (<0.7) and good EPS Growth (>15%) Yes for 2016 but not for 2017.
However if forecast are upgraded between now and 2017 the PEG will come down.
Positive 1 Year Relative Strength - Yes
Positive 1 Month Relative Strength Yes
ROCE of 20% - Yes 37%
Profit Margin of over 7.5% - Yes 19%
Cashflow Per Share greater than EPS around 1.3 - Yes 2.4
Low Gearing 21% so just ok
Director Share holding >10% - Yes 19%
Dividend Yield (a nice to have) forecast Small 1.5%
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Gussy has reiterated that IOM will continue on the acquisition road building the company into a £100 million plus concern Hope this finally stops all those "bleaters" who continually post TAKEOVER Go on Gussy spend spend spend. A great Scottish company. Let's buy ................Amazon!!.Back to my Highland Park. Night all Who said Sell Jings Crivens
IOM are due to announce their annual results tomorrow morning 9th June.
Today, IOM issued an RNS announcing a take-over of a cloud competitor based in London. While the take-over appears to have significant synergies and should lead to increased revenues and possibly increased profits too, the full cost of the take-over is somewhat uncertain at this stage and seems likely to remain uncertain for some time to come.
IOM shares ended down almost 3% on the day probably as a result of uncertainty about how much IOM will end up paying for the take-over.
I'll have to wait and see what happens to the share price after reading tomorrows RNS from the company. I guess the share price could rise over the coming months as the financial costs of the take-over are revealed. The share price might not rise however if the cost of the take-over turns out to be more than the board of IOM bargained for.
If there is one thing that the market does not welcome, it is uncertainty about a business and its future. We'll see!
Looking very good here for a nice rise before results - price is only just coming of the bottom if you look at charts. Recomended by both IC & Shares mag recently.
This is the sort of business that grows and grows each year as more companies move to the cloud to keep all their data safe.
I expect that once they have signed up they never move again bringing in repeat fees year after year.
Field Services Company Says Thin Client Keeps it Secure in Cloud
iomart (AIM:IOM), the cloud company that enables businesses to operate their online data and IT environments safely and securely, has provided a secure Hosted Desktop solution for one of the UK's leading field services organisations.
Chase Solutions works with utility companies, banks and debt collection agencies across the UK. It says the move to the cloud with iomart has made it more not less secure and helped it continue to meet the strict security and legal standards demanded by both clients and industry regulators.
Michael Wolfenden, Operations Director for Chase Solutions, said: "Hosted desktop is the perfect solution because it allows our management to work on the road without having any important data held on their devices. The whole solution is hosted in iomart's cloud, in their fully compliant and accredited data centres."
The laptops used have a minimal operating system based on Linux that is securely configured to only allow access to the cloud environment via thin client software VMWare Horizon. This means only screen images, keyboard and mouse instructions are transmitted between the laptops and the cloud. No data leaves the iomart data centre and therefore there is none of the risk that is normally associated with laptops and data stored on their internal drives.
Steve Riley, the IT consultant for Chase Solutions, adds: "All Chase's clients' data is stored securely at iomart's data centre and because no data is stored on the laptops the managers are using they don't have to be encrypted. It means that when Chase responds to a tender for work we can tick every box with regards to security."
Phil Worms, Chief Marketing Officer for iomart, said: "Hosted desktop is a great enabler for business. By delivering all your desktop services and data direct from our secure data centres you can simplify your IT estate, connect to your corporate desktop from anywhere and scale up and down easily as your staff numbers change."
To read the full case study with Chase Solutions click here
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