Iomart (AIM:IOM) – sell off looks overdone, relative to quality of this business
Half year results from the cloud hosting company looked quite reasonable, even allowing for the more cautious outlook, suggesting that the subsequent share price sell-off looked overdone.
Iomart owns and manages its own infrastructure, including state-of-the-art data centres in eight locations across the UK, and a private fast fibre network. Revenue was up 28% to £31.5m, adjusted EBITDA up 44% to £14.0m, adjusted basic earnings per share from operations up 26% to 6.15p. Results yesterday led to 5% downgrades and a share price down 20%! Arden Partners offered some excellent thoughts on the circumstances surrounding the sell-off. They consider that the main reasons for the downgrade were the slowdown in Hosting organic growth from around 12% to 8%, rising depreciation which negatively impacted what they considered to…