Shares in London-listed cloud data centre company Iomart fell by around 27% on Friday after reporting an increase in customer churn.
The Glasgow-founded cloud provided said in a trading update that a recent acceleration in customer churn, along with lower renewal levels in private cloud managed services has had an “amplified impact on profit contribution”, warning that its full-year earnings would be as much as 10% below current market expectations
The company told UKTN in November that the previous year had been “challenging”, but it had high hopes for the performance of Atech, a cloud firm it acquired for £57m.
Iomart said on Friday that Atech had been performing well at both the revenue and profit level, in line with its expectations.
“We have seen continued positive new order bookings across both the iomart and Atech offerings and are starting to see the power of the combined business flow through,” said Iomart CEO Lucy Dimes.
“However, transformation takes time, and churn within legacy offerings continues to present a headwind. We will continue to optimise our cost structure, while pivoting the portfolio to higher growth segments, and are confident that we have the right team and offerings to achieve our bold ambitions.”
Looking ahead, the company projected revenue for the year ended March 2025 between £142m and £143m, with net debt expected to be in the range of £95m to £98m.
The previous year, the company posted revenue of £127m with a pre-tax profit of £8.7m.
Iomart shares are currently trading at 43.32p. The stock has fallen by nearly 70% over the past year.
Founded in 1998 and listed in 2000, Iomart provides secure cloud managed data services. The firm is part of Microsoft’s Intelligent Security Association and holds Azure Expert MSP credentials.
The UK government declared data centres would be considered critical national infrastructure in September last year, as its massive AI growth plans hinge on Britain’s data storage and security capabilities.
The post Iomart shares sink amid customer churn at data centre firm appeared first on UKTN.
