Gamma Communications plc
Visit Gamma Communications plc
Description
Gamma is a technology based provider of communications services to the UK business market. Its services include Cloud PBX, Inbound Call Control Services and SIP Trunking which are designed to meet the voice, data and mobility requirements of businesses. It also provides services such as business-grade broadband, Ethernet and mobile and data services and has a substantial voice service capability.
Our view
Gamma is active in an exciting growth area of the telecoms market and its strategic positioning allows it to compete strongly. The group’s tactical decisions have differentiated it from much of the competition. By owning its platforms, Gamma can provide business-grade, reliable systems that companies want. By working with channel partners, the group is able to access large numbers of end customers without the cost or administrative pressure of running a large direct sales team.
Financial Summary
Year end: December (£m unless shown)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Revenue | 328.9 | 393.8 | 447.3 | 495.3 | 545.3 |
| Adjusted EBITDA | 63.5 | 79.0 | 89.2 | 98.6 | 108.8 |
| Adjusted PBT | 48.0 | 61.3 | 71.1 | 79.8 | 89.7 |
| Adjusted Dil. EPS | 40.8 | 51.3 | 59.2 | 66.0 | 74.2 |
Profit & Loss
Year end: December (£m unless shown)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Revenue | 328.9 | 393.8 | 447.3 | 495.3 | 545.3 |
| Adj EBITDA | 63.5 | 79.0 | 89.2 | 98.6 | 108.8 |
| Adj EBIT | 46.4 | 56.1 | 65.2 | 73.9 | 83.8 |
| Reported PBT | 45.2 | 75.0 | 65.2 | 73.9 | 83.8 |
| Fully adj PBT | 48.0 | 61.3 | 71.1 | 79.8 | 89.7 |
| NOPAT | 39.2 | 50.2 | 71.1 | 79.8 | 89.7 |
| Reported EPS | 36.1 | 66.6 | 54.3 | 61.2 | 69.3 |
| Fully adj EPS | 40.8 | 51.3 | 59.2 | 66.0 | 74.2 |
| Dividend per share | 10.5 | 11.7 | 12.8 | 13.9 | 15.2 |
Cash Flow & Balance Sheet
Year end: December (£m unless shown)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Operating cash flow | 54.0 | 70.3 | 74.4 | 84.1 | 91.8 |
| Free Cash flow | 32.3 | 36.2 | 50.8 | 58.4 | 65.1 |
| FCF per share | 33.8 | 37.6 | 52.5 | 60.4 | 67.4 |
| Acquisitions | (7.5) | (47.7) | (48.0) | (6.7) | (1.3) |
| Disposals | 0.0 | 19.4 | 0.0 | 0.0 | 0.0 |
| Shares issued | 2.0 | 1.5 | 0.0 | 0.0 | 0.0 |
| Net cash flow | 18.4 | (5.9) | (8.7) | 39.2 | 50.2 |
| Overdrafts / borrowings | 0.0 | (5.9) | (4.9) | (3.9) | (2.9) |
| Cash & equivalents | 53.9 | 53.9 | 44.2 | 82.4 | 131.6 |
| Net (Debt)/Cash | 53.9 | 48.0 | 39.3 | 78.5 | 128.7 |
Nav & Returns
Year end: December (£m unless shown)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Net asset value | 152.5 | 204.4 | 253.4 | 303.5 | 356.9 |
| NAV/share | 160.9 | 214.3 | 265.7 | 318.1 | 374.1 |
| Net Tangible Asset Value | 115.1 | 109.1 | 121.4 | 177.8 | 237.6 |
| NTAV/share | 121.4 | 114.4 | 127.2 | 186.3 | 249.1 |
| Average equity | 137.1 | 182.7 | 233.3 | 277.2 | 327.2 |
| Post-tax ROE (%) | 25.2% | 35.3% | 22.5% | 21.3% | 20.5% |
Metrics
Year end: December (£m unless shown)
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Revenue growth | 15.4% | 19.7% | 13.6% | 10.7% | 10.1% |
| Adj EBITDA growth | 31.5% | 24.4% | 12.9% | 10.5% | 10.3% |
| Adj EBIT growth | 34.9% | 20.9% | 16.2% | 13.3% | 13.4% |
| Adj PBT growth | 37.9% | 27.7% | 16.0% | 12.2% | 12.4% |
| Adj EPS growth | 34.7% | 25.7% | 15.5% | 11.5% | 12.4% |
| Dividend growth | 12.9% | 11.0% | 9.4% | 9.0% | 9.4% |
| Adj EBIT margins | 14.1% | 14.2% | 14.6% | 14.9% | 15.4% |