Harrogate’s Redcentric ups revenue 52% to £142m

Harrogate-based IT firm Redcentric plc has announced “provisional results” in an update for the year to March 31, 2023, showing revenues rose 52% to £141.8 million and adjusted EBITDA rose to 4.6% to £24.8 million.

Redcentric said the sale of its Elland data centre anticipated for December 2022 did not complete due to funding issues on the buyer’s part and as a result this facility will now be retained and developed as a long-term strategic asset.

The firm said its Harrogate data centre will now be closed instead, with customer and core equipment transferred to Elland by the end of FY24.

On its current trading and outlook, Redcentric said: “Considering the improved electricity purchasing arrangements, customer and supplier price increases effective from 1 April 2023 and completed cost reductions as result of the synergy programme, we commence FY24 with annualised revenues and adjusted EBITDA of c.£160.0m and c.£29.0m respectively.

“The focus for FY24 will be to complete the integration of the recently acquired businesses and to continue to grow the business by capitalising on the excellent opportunities provided by the broader product offerings and increased customer bases which have resulted from the acquisitions undertaken in FY22 and FY23. 

“Electricity costs remain key to financial performance and we will continue to make significant investments in FY24 to further reduce electricity consumption.

“This will be achieved by deploying new cooling infrastructure at the flagship data centre in Heathrow and by installing solar panels at the Heathrow and Elland data centres. 

“The company has locked in electricity prices for the whole of FY24 and so will not be subject to commodity price volatility in the current financial year.

“With both the synergy and energy efficiency programmes completing during the course of FY24, FY25 will be the first full year that reflects the full benefit of the acquisitions.”

Redcentric CEO Peter Brotherton said: “The last two years have been transformational for the company.

“The five acquisitions, together with a return to organic growth, has seen Redcentric’s revenues grow by 75% in the last two years from £91.4m in FY21 to a current annualised run rate of c.£160m.

“Due to the very significant and complex nature of the synergy programmes, which were reflected in the consideration paid for the acquisitions, the boost in profitability will not be fully realised until FY25.

“However, we are confident of achieving long term EBITDA margins close to or in line with our stated target of 25% once the integration programmes have been completed and fully reflected in the cost base.

“Given the broader product offerings, the enlarged customer base, and the integration programmes currently underway, I am extremely confident in the outlook for Redcentric.”