Companies: IOM   

Having sold off its online directory to BT for £20m, the ever-changing Iomart is now focusing its efforts on its core managed hosting and fledgling data centres businesses.

Arriving on AIM in 2000 as an internet and telecoms player, Iomart has experimented with many different guises yet always maintained a managed hosting business. An acquisition in 2007 saw the company move into data centre ownership, enabling it to offer its managed hosting customers a full ‘soup to nuts’ solution.

Revenues from managed hosting – composed of smaller company hosting arm Easyspace and the fledgling data centre-owning and corporates-focused Iomart Hosting – grew 17% to £7.7m in the year to March, of which Easyspace accounted for £6.3m. However, the group produced losses of £175,000 before tax credits took it to a £353,000 profit, down from a £2.2m profit the year before.

With the internet becoming an ever more important medium for companies small and large, demand for managed services remains strong, and chief executive Angus MacSween invested £3m in the data centre operations during the year. He adds that the focus is on winning long-term managed services contracts rather than just those for ‘space and power’ – and recent wins with BT and Stagecoach show the hosting arm is proving popular.

House broker KBC Peel Hunt says Iomart’s transformation to an asset-based opportunity sets a value of 58p per share based on the replacement cost of data centres and a five-times valuation of its Easyspace business. The broker forecasts that losses in the current year will turn into profits in 2010 with the data centres at 40% capacity.

Strategically more focused, seeing strong demand and with £15m of net cash in the bank, Iomart’s prospects are promising. Speculative buy.

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Iomart	AIM	£36.59m	36.50p	-0.50p
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Iomart enters start-up phase – again			23/05/2002
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