Results for the year ended 31 December 2023

Continued strong financial performance, with growth in line with expectations, delivering considerable cash generation

Gamma Communications plc ("Gamma" or "the Group"), a leading technology-based provider of communication services across Europe, is pleased to announce its results for the year ended 31 December 2023.

Year ended 31 December




Change (%)





Gross profit




Gross margin




Adjusted EBITDA*




Profit before tax ("PBT")**




Adjusted PBT*




Earnings Per Share ("EPS") (fully diluted)**




Adjusted EPS (fully diluted)*




Total dividend per share




Cash generated by operations




Adjusted cash conversion*




Net cash*





*The Group uses certain measures in addition to those reported under IFRS, under which the Group reports. These measures are known as Alternative Performance Measures ("APMs"). The Group does not consider these APMs to be a substitute for, or superior to, the equivalent statutory IFRS measures. These APMs are explained, defined and reconciled in the APM section and are applied consistently.

**In 2023, EPS and PBT include two exceptional items, a significant non-cash impairment of a development cost intangible asset and significant non-recurring restructuring costs. In 2022, these measures included exceptional items relating to an impairment of the Spanish cash generating unit (CGU) and disposal of ComyMedia in Spain.


Key highlights


Strong financial performance with growth in all business units and strong cash position.


Three acquisitions completed: Satisnet, in August 2023, a leading provider of cyber security services and solutions; EnableX Group, in December 2023, giving us a relationship with Ericsson-LG and access to their UCaaS solution, iPECS; and Coolwave Communications, in February 2024, an international SMS and voice services provider allowing us to provide Operator Connect and other carrier services into nearly 20 countries.


Through these acquisitions and strengthening existing partnerships we intend to have a full UCaaS portfolio with our in-house developed product, PhoneLine+ for micro-businesses, Horizon and iPECS for SMEs, and a Cisco suite for larger SME and Enterprises customers. Most of these can be integrated with Teams.


After applying the Board's capital allocation framework we are announcing an intention to launch a share buyback programme of £35m to be executed over the next six months, until early September.


Financial highlights

The Group delivered continued strong financial performance with good gross profit growth flowing through to both Adjusted EBITDA and Adjusted PBT, with significant cash generation.


Revenue and gross profit grew by 8% to £521.7m and £267.2m respectively (2022: £484.6m and £247.7m), with gross margin being maintained at 51%.


Recurring revenue (being revenue which is recognised "over time" as per note 3) grew by 7% to £462.8m (2022: £431.7m), remaining at 89% (2022: 89%) of total revenue.


Adjusted EBITDA grew by 9% to £114.3m (2022: £105.1m) ahead of 8% growth in revenue and gross profit with maintained focus on cost control.


Gamma Business continued to grow strongly, primarily driven by our UCaaS portfolio but also supported through targeted price rises. Gross profit increased by 8% to £176.1m (2022: £163.7m#) with a stable gross margin.


Gamma Enterprise grew gross profit by 7% to £52.6m (2022: £49.3m#) partially supported by the Satisnet acquisition. Gross margin decreased slightly from 48.3% to 47.8% due to Satisnet having a lower gross profit margin.


The European business delivered gross profit growth of 11% to £38.5m (2022: £34.7m#), 8% excluding foreign exchange movements, with gross margin improving from 47.4% to 48.5% supported by the successful integration of NeoTel, acquired in 2022.


Profit before tax increased by 10% to £71.5m (2022: £64.9m) after a £12.7m non-cash exceptional impairment of development cost intangible assets and £3.3m of non-recurring exceptional restructuring costs (note 4).


Adjusted EPS (fully diluted) for the year increased by 5% (2022: 12%) to 75.1p (2022: 71.8p). The reduction in growth rate was primarily due to the adverse impact of the increase in UK statutory corporation tax rate in April 2023.


Cash generated by operations increased by 25% to £123.5m (2022: £99.1m) with Adjusted cash conversion of 108% (2022: 94%), primarily a result of favourable working capital movements, in particular the effect of some prepayments in 2022 not repeated in 2023. This underpinned a net cash increase of 46% to £134.8m (2022: £92.5m), achieved after total payments of £30.5m related to acquisitions (net of cash acquired) and £15.2m paid as dividends in the year.

#See Note 3 for segmental change information and restated comparatives.


Andrew Belshaw, Chief Executive Officer, commented,

"Gamma has produced another strong set of results. Recurring revenue, stable margins and cash generation continue to be a feature of our business. We have grown in each business unit and the growth in our European business is particularly pleasing.

As well as our organic growth, Gamma has made acquisitions which have added to our growth potential and our ability to sell additional solutions to our existing customers.

We have developed our solution portfolio in the UCaaS space, and in the UK, for the first time, we will have a portfolio of solutions to serve any business of any size - we plan to replicate this in Europe throughout 2024. I want to thank our customers, partners and colleagues and look forward to working with them as we continue to grow the business over the coming years.

I am very pleased with this set of results and the opportunities which lie ahead of us suggest a promising future for the group."

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