Gamma announces 2019 results with strong execution against all strategic priorities

Gamma Communications plc (“Gamma”), a leading, technology based provider of communication services to the business markets in the UK and the Netherlands, is pleased to announce its results for the year ended 31 December 2019.


Financial highlights

Year ended 31 December
20192018Change (%)
Gross Profit£166.5m£132.2m26%
Gross margin51%46%
Profit from operations£45.5m£34.4m32%
Adjusted EBITDA£63.5m£48.3m31%
Adjusted PBT£48.1m£34.9m38%
EPS (Fully Diluted, “FD”)36.1p30.0p20%
Adjusted EPS (FD)40.8p30.3p35%
Total dividend per share10.5p9.3p13%
Cash generated by operations£54.0m£40.6m33%
Cash generated by operations / adjusted EBITDA85%84%

All adjusted measures set out above and throughout this document which are described as “adjusted” represent Alternative Performance Measures (“APMs”) and are separately presented within the statement of comprehensive income or reconciled in the Financial Review section or segment note and are applied consistently. Where reference is made to adjusted EPS this is stated on a fully diluted basis. Definitions of APMs are included in the Financial Review. Our policy on the use of APMs is included in note 2.


Key Highlights


Continued strong growth across the major product groups in the United Kingdom:

  • The number of installed SIP Trunks increased from 856,000 at 31 December 2018 to 1,016,000 at 31 December 2019 (+19%).
  • The number of Horizon (Cloud PBX) users increased from 435,000 to 522,000 (+20%). The main growth area was in the SME segment which is Gamma’s target market segment.
  • Collaborate, the fully integrated Unified Communications upgrade to Horizon which was launched in March 2019, already has over 9,000 users.
  • To support our UCaaS strategy, in November we acquired Telsis Direct Limited, Telsis Communication Services Limited, Telsis Services Limited and Telsis GmbH (together “Telsis”) which brings a development capability and will enable us to launch a fully integrated cloud contact centre solution in late 2020.
  • Our connectivity products have continued to perform well as part of our overall solution strategy. Broadband has increased from 94,000 units (at 31 December 2018) to 111,000 (+18%) and Ethernet from 8,370 to 13,900 (+66%). Mobile connections have increased from 50,000 to 62,000 (+24%).

The main business units continued to perform well:

  • The UK Indirect business continues to grow strongly with a focus on the existing partner base. Gross profit increased from £97.5m in 2018 to £119.1m in 2019 (+22%).
  • The UK Direct business continues to deliver very positive growth, with gross profit up from £32.8m in 2018 to £38.2m in 2019 (+16%).
  • In February 2020, we acquired Exactive Holdings Ltd (“Exactive”), a unified communications specialist with expertise in Microsoft Teams. Exactive will help us address a part of the market that is already embedded in a Microsoft ecosystem and this will be an essential part of our UCaaS strategy. Following the acquisition of Telsis this is another key step in Gamma’s strategy to become the leading provider of Unified Communications as a Service (“UCaaS”).
  • In our Overseas business, the integration of our Dutch businesses went well in the year. In the first half we had reported a greater than expected drop off in ISDN revenue. We are pleased to say that the second half performance was stronger. Gross profit increased from £1.9m in 2018 to £9.2m in 2019. This represents a full year of DX Groep which was acquired in October 2018 and the benefit of Nimsys which was acquired in February 2019. The number of Cloud seats at the end of 2019 was over 22,000 and the mobile base added 7,000 connections in 2019.
  • In February 2020 we made an offer to acquire VozTelecom OIGAA360, SA (“Voz Telecom”) in Spain which will give us access to the attractive Spanish market. We expect the acquisition to complete in April.


Andrew Taylor, Chief Executive Officer, commented

“We have delivered a strong business performance and an excellent set of financial results for 2019, with both our UK Indirect and UK Direct businesses continuing to grow well. Despite an increasingly competitive market, our product performance was positive, and during the period we continued to strengthen our market capabilities, through the development and launch of new products and services. Our Dutch business continues to build market share and we will shortly be operating in Spain following the acquisition of Voz Telecom. Through the acquisition of both Telsis and Exactive, we are executing against our UCaaS strategy, while ensuring that we continue to strengthen both our direct and indirect channel propositions.”


View Gamma Annual Report and Accounts 2019