Revenues have reduced from £178.1 million to £173.9 million principally due to the continued and expected decline in fixed line network services and an agreed change in contractual terms with a key mobile partner. However, changes in the mix of business and good cost control has meant that adjusted EBITDA (operating result before depreciation, amortisation, net exceptional operating items and net share based payment charges/credits) has increased by 2% to £27.8 million. The Group has made some significant gains in its mid-market customer base in the first half of the financial year, in particular with certain public sector and large corporate clients. The progress in this area has resulted in increased investment in both capital expenditure and working capital. As a result, the cash generated from operations for the first half of the year has reduced from £21.8 million to £16.8 million. We do not expect to see a repetition of this level of investment in the second half of the year and, as a result, expect that the cash flow in the second half of the year will show significant growth over that recorded in the first half.
Matthew Riley, CEO of Daisy, commented “We are pleased to report the results for this interim period, in which we have seen growth in adjusted EBITDA, and basic adjusted EPS.
“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.
“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%. We are focused on driving organic growth whilst investigating strategic acquisitions that provide clear value for our shareholders.”