17 May 2023

Gamma Communications plc

AGM trading update

Positive growth momentum leading to continued high cash generation. Guidance is reiterated

Ahead of the Annual General Meeting ("AGM") to be held later today at Investec, 30 Gresham St, London EC2V 7QN, Gamma Communications plc ("Gamma" or the "Group") confirms the following update on trading.

Group overview

Gamma is pleased with the good performance in 2023 to date, with growth across all three operating segments.  It expects this positive momentum to continue through the rest of the year. 

Operational highlights in the first part of the year include:

·      The UK businesses have experienced a positive start to the year.  Announced price rises landed in line with expectations. Spending controls remain in place to manage inflationary pressures which are expected to continue into the second half of the year.

·      The launch of Simple Swap, a unique proposition in the UK marketplace, that allows us to seamlessly convert legacy data and voice services for small businesses as PSTN switch off approaches.

·      The improved European business performance seen in H2 2022 has continued in 2023 to date, including a number of product launches.

Balance Sheet

Our balance sheet remains strong and underlying trading continues to generate cash.  Gamma had net cash of £101.3m as at 30 April 2023 (30 April 2022: £54.0m).

Dividend

The proposed final dividend in respect of the year ended 31 December 2022 will be put to shareholder vote at the AGM today. The proposed final dividend is 10.0 pence (2021: 8.8 pence) equating to a cash cost of £9.7m. When added to the 5.0 pence interim dividend (2021: 4.4 pence) this will deliver a total dividend declared of 15.0 pence for 2022 (2021: 13.2 pence), an increase of 14% over 2021.

Outlook

The Board remains positive about Gamma's prospects.  The Group continues to be in a strong financial position allowing it to invest and deliver against its long-term growth strategy, and has proven to be resilient to the varying economic market conditions. 

Based on our trading in 2023 to date, the Board expect adjusted EBITDA and adjusted EPS (fully diluted) for the year ending 31 December 2023 to be within the range of market forecasts*.

The Board will provide its next trading update shortly after the end of the first half and prior to the publication of the interim results for the six months ending 30 June 2023 on Tuesday 5 September.

Chair Succession

Following the announcement made on 21 March 2023, the search for a replacement Chair to succeed Richard Last has made good progress but has not yet completed. Subject to his re-election at the AGM to be held today, Richard will remain on the Board as Chair until his successor has been appointed.

The Company will make a further announcement in due course, updating the market as and when appropriate.

* Note: Company compiled range is based on known sell side analyst estimates, some of which have been updated to take into account Gamma's FY 2022 audited results.  The ranges are adjusted EBITDA £110.4m - £117.2m and adjusted EPS (fully diluted) 70.0 pence - 77.0 pence.