iomart

Cloud computing specialist iomart (IOM) has reported a doubling in pre-tax profits following a number of acquisitions.

The AIM-quoted company declared pre-tax profits of £2.4m (2010: £1.2m) on sales of £15.4m (2010: £11.4m) for the six months to September. Net cash stood at £3.5m (2010: £5.3m) while earnings per share rose from 1.05p to 2.23p.

The Scottish enterprise acquired hosting service Switch Media Group this April in a deal worth £1.2m and Glasgow-based datacentre provider ESQN this November for £2.5m, respectively. As a result its hosting division grew sales by 50% to £11.3m (helped by the contribution from web hosting firm Titan Internet, bought last year for £4.2m) while its 'Easyspace' division saw sales climb by 8% to £4.2m.

Analysts at Peel Hunt are forecasting pre-tax profits of £6.3m (EPS: 6.2p) for the year to March 2012. In 2013 profits of £9.2m (EPS: 7.7p) are penciled in. A dividend of 0.9p and 1.2p are forecast for 2012 and 2013, respectively.

Recommended by Growth Company Investor last July at 57.25p we subsequently recommended taking some profit this September at 112p. A company operating in a dull area of the software sector lacking the glamour of sector peers such as Blinkx, iomart has grown at an impressive rate amidst a number of acquisitions and increasing interest in its niche data hosting services. Solid but steady, we rate the shares as a hold for now.