The Iomart dividend policy, which has been in place for several years now, is based on the profitability of the business in the period measured with reference to the adjusted diluted earnings per share they deliver in a financial year. For the last few years they have been paying dividends at the maximum level allowed by their stated policy. They have reviewed their dividend policy in the year and with the continued strong level of cash generation in the business are increasing the maximum pay-out policy from 40% to 50% of adjusted diluted earnings per share. This amendment allows the Directors to propose a final dividend of 4.50p which is above the prior year of 3.93p and they believe is fully appropriate given the recurring revenue nature of the Group, the level of operating cash which they deliver, the low level of indebtedness within the Group and the fact they have not utilised any of the government furlough schemes. As a result, along with the interim dividend of 2.60p (2020: 2.60p), which was paid in January 2021, the total dividend for the year is 7.10p (2020: 6.53p), an increase of 8.7%.
Other financial highlights include:
Revenue resilient through the Covid-19 pandemic at £111.9m (2020: £112.6m), with revenue mix improving as growth in core cloud managed services was offset by reduction in non-recurring revenue. Positive contribution from prior year acquisitions
Adjusted EBITDA of £41.4m (2020: £43.5m) with 37.0% adjusted EBITDA margin (2020: 38.6%), higher than industry average and in-line with expectations
Adjusted profit before tax impacted by an increase of £1.3m in the depreciation charge in the year following acquisitions
High levels of operating cash generated in the year at £43.7m (2020: £41.3m) which represents a 106% conversion of adjusted EBITDA (2020: 95%)
Year end cash position of £23.0m (2020: £15.5m) with net debt of £54.6m (2020: £57.6m) which remains at a comfortable level of 1.3 times adjusted EBITDA