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AdEPT Technology continues brand unification as acquisitions begin to pay off

Snapshot

  • Non-network based telecommunications company

  • Provides fixed line calls, line rental, telephony, and broadband

  • Serves variety of sector including education and government

Data stream

Quick facts: AdEPT Technology Group PLC

Price: 221 GBX

LSE:ADT
Market: LSE
Market Cap: £55.32 m
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What AdEPT does

AdEPT Technology PLC (LON:ADT) is a non-network based telecommunications company that provides fixed line calls, line rental, telephony, and broadband to business and residential customers.

The group serves a wide variety of sectors in the UK including health, education and government as well as both small and big businesses.

A £4.25mln fundraising in February was completed to finance potential acquisition opportunities.

 

How it’s doing

For the six months to the end of September saw revenue rise by 26% to £30.8mln from £24.4mln in the same period of last year.

Managed services revenue, which now forms 82% of total revenue (2018: 74%), rose by 39% to £25.1mln from £18.0mln the year before.

Organic year-on-year revenue growth in the period clocked in at 2.5%, driven mainly by information technology and managed connectivity services.

Reported profit before tax decreased to £1.15mln from £1.70mln the previous year, due to the £870,000 increase in amortisation and £394,000 increase in interest charges, with the latter arising from a higher average net debt position as a consequence of the four acquisitions completed in the last 14 months.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), which excludes one-off acquisition costs, restructuring costs and share-based payments, climbed by 18% to £6.1mln from £5.2mln the previous year while the EBITDA margin eased to 20% from 21%.

The interim dividend was increased by 5.1p to 4.9p as cash conversion improved to 90% from 82%, while net senior debt at the end of September stood at £31.5mln.

In 2020, AdEPT delivered network services to more than 100 hospital and specialist care sites as part of a government contract with the NHS, which was taken over from BT.

It is now carrying out services to 300 general practice surgeries in Kent, to complete the upgrade of the entire NHS network in the region.

 

Inflexion points

  • AdEPT Technology raised £4.25mln to fund potential acquisitions in February 2020 as part of a wider strategy to expand the business.
  • In November, AdEPT was granted “diamond” reseller partner status by US communications group Avaya, one of only eight such partners in the UK
  • An upgrade to the firm’s flagship education security and safeguarding tool, WebScreen, has been positively received with feedback from users in schools being extremely positive
  • In a letter to shareholders in September, the company said the second half of its current year will see all subsidiary companies moving to a single AdEPT brand

 

Video interview with CEO Phil Race in February

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