AdEPT Technology shares dip despite revenue bounce

Managed IT services provider AdEPT Technology Group PLC (LON: ADT) saw its share price drop during trading on Tuesday, despite a sharp hike in the Company’s financial performance fundamentals during the half year to September 30th.

The Company’s revenues bounced 26% to £30.8 million year-on-year. The majority of revenue came from managed services, which jumped 39% to £25.1 million and now make up 82% of total Company revenues.

Additionally, AdEPT’s EBITDA increased by 18% to £6.1 million while adjusted profit after tax rose 4% to £3.9 million.

Similar financial progress in the tech sector was enjoyed by Infineon Technologies AG (ETR: IFX) and Microsaic Systems PLC (LON: MSYS), who both enjoyed revenue hikes, Echoh PLC (LON: ECK), who boasted strong first half results and dotDigital Group plc (LON: DOTD), who saw their profits surge.

AdEPT shareholders also enjoyed similar progress, with the Company’s adjusted fully diluted EPS and interim dividend both up 4% to 15.3p and 5.10p per share respectively.

AdEPT comments

Ian Fishwick, Chairman, commented:

“The Group has continued with its transformation into a managed service provider for unified communications and IT whilst bringing the Group closer together under the ‘One AdEPT’ initiative christened ‘Project Fusion’. I am delighted to see the organic revenue growth that has been achieved alongside successfully continuing with our acquisitive growth strategy. The results for the period demonstrate the strength of our capex-light highly cash generative business model which is focused on high levels of recurring revenue.”

“I am pleased to see the positive results of our efforts, as trading continues to be in line with management’s expectations. We have a fully supportive investor base and funding partners, and in this converging and fragmented marketplace we will continue to pursue our strategy to identify earnings-enhancing acquisitions whilst retaining the ability to continue with our progressive dividend.”

Investor notes

Despite what appeared to be a positive update, the Company’s shares fell 9.19% or 34.00p during trading on Tuesday, down to 336.00p per share 12/11/19 15:49 GMT. The Group’s p/e ratio is 12.42, their dividend yield stands at 2.86% and their market cap is £81.30 million.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.