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Investing.com - Gamma Communications plc (LSE:GAMA) shares surged 6.8% on Tuesday after reporting strong first-half results driven by strategic German acquisitions, with Adjusted EBITDA rising 14% to £70.9m and Adjusted EPS climbing 13% to 47.9p.
The technology-based communication services provider posted a 12% increase in revenue to £316.6m for the six months ended June 30, 2025, with gross profit up 18% to £172.0m.
The impressive performance was largely attributed to the company’s successful acquisitions of Starface and Placetel in Germany, which delivered double-digit proforma revenue growth against the same period last year.
The company’s German business has become a significant contributor, now representing approximately 20% of Group gross profit and housing 565,000 cloud seats.
Total cloud seats across the group increased by 50% to 1.8 million compared to June 2024.
"Gamma has achieved another strong set of results. Our German business, bolstered by our recent acquisitions has performed particularly strongly, while the performance in the UK has been resilient in spite of a continuing challenging macro-economic backdrop for SMEs," said Andrew Belshaw, Chief Executive Officer.
Despite completing a £45.1m share buyback program during the period, the company maintained healthy adjusted cash conversion of 90%, resulting in a net debt position of £21.6m.
This demonstrates the Group’s capacity to deleverage quickly following the Starface acquisition.
The Board declared an interim dividend of 7.4p per share, representing a 14% increase from the previous year’s 6.5p.
For the full year ending December 31, 2025, Gamma expects Adjusted EBITDA to be in line with current market expectations, with Adjusted EPS slightly ahead.
The company also successfully moved to the ESCC listing category of the Main Market of the London Stock Exchange on May 2, with subsequent inclusion in the FTSE 250 index in June.
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