Daisy ‘cautiously optimistic’ as losses widen to £15m

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Revenue down but adjusted EBITDA and gross margin up, as Group says it has a good pipeline of opportunities and will continue to look at strategic acquisitions

Daisy Group said it was “cautiously optimistic” for the future after seeing losses widen year-on-year by £1.2 million to £15 million for the six months to September 30.

Revenue fell by £4.2 million to £173.9 million which the company said was due to the continued and expected decline in fixed line network services and an agreed change in contractual terms with an unnamed mobile partner. Daisy has operator partnerships with EE, O2 and Vodafone.

However, it said that due to changes in the mix of business and good cost control, adjusted EBITDA grew two per cent to stand at £27.8 million.

Gross margin increased from 36 per cent to 39 per cent, which Daisy said reflected the continued improvement to the product portfolio mix.

Within the financial report, Daisy Group executive chairman Peter Dubens stated the results have seen the Group continue to make progress towards its aim of being one of the largest providers of business communications and IT services in the UK to the SME and mid-market sector.

Daisy Group CEO Matthew Riley (pictured) said the company has a number of opportunities to exploit in the next six months and will continue to look at making further acquisitions.

This calendar year it has made three acquisitions. In May it acquired data specialist DDCS for £7.5 million and followed this up with the purchase of O2 Centre of Excellence airtime distributor MoCo for £1.9 million in June.

Its most recent acquisition came in October when it bought Indecs, a provider of technical maintenance and support services for business critical, IT server and cloud storage facilities, for £18 million.

“A number of managed services contract wins in the mid-market have strengthened our position and we have a good pipeline of opportunities going into the second half of the year,” he said.

“The Daisy Data Centre Solutions business, acquired in May 2013, is performing ahead of expectations and the change of ownership has been well received by the existing customers following an uncertain period caused by the demise of 2e2. From this foundation, we are building a strong pipeline of business.

“Since the period end we have announced the acquisition of Indecs which, together with our existing Servassure and Net Crowd businesses gives us credible scale in the Partner Services area. We expect good growth from this business in the coming years.

“Looking forward, we remain cautiously optimistic and expect to see continued progress and strong free cash flow generation during the rest of the current financial year. In line with this, we intend to increase our total dividends for the year by 15 per cent . We are focused on driving organic growth whilst investigating strategic acquisitions that provide clear value for our shareholders.”

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