Gamma announces strong results for 2018

Gamma Communications plc (“Gamma” or “the Group”), a leading, technology-based provider of communications services to the business market, is pleased to announce its results for the year ended 31 December 2018.


Financial highlights

Years ended 31 December
20182017 (Restated2)Change (%)
Gross Profit£132.2m£108.7m+22%
Gross margin46.4%44.9%
EBITDA (also being adj EBITDA1)£48.3m£36.0m+34%
Adjusted PBT1£34.9m£26.5m+32%
EPS (Fully Diluted, “FD”)30.0p24.0p+25%
Adjusted EPS1 (FD)30.3p23.1p+31%
Total dividend per share9.3p8.4p+11%
Cash generated by operations£40.6m£29.9m+36%
Cash generated by operations / EBITDA84%83%

1 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 and recalculations of APMs are included in the Financial Review. Our Policy on the use of APMs is included in note 2 to the condensed financial statements.

2 The prior period comparative figures have been restated for the effects of the adoption of IFRS 15, see note 3 of the 2018 Annnual Report and Accounts for details of the impact of the change in accounting policies. In the text of this document where figures for 2017 have been quoted, these have been restated.


Operational highlights

  • Continued strong growth –
    • The number of installed SIP Trunks increased from 680,000 at 31 December 2017 to 856,000 at 31 December 2018 (+26%).
    • The number of Cloud PBX users increased from 331,000 to 435,000 (+31%); this is an important base in which to cross and up-sell our Unified Communications as a Service (“UCaaS”) product, Collaborate, which will be launched shortly.
    • A key part of our “Gamma 2023” strategy is building on our Fixed and Mobile Telecom strength to differentiate our UcaaS proposition from pure “over the top” (“OTT”) providers. As a result of our ongoing investment, data products have performed very well. Broadband has increased from 76,000 units to 94,000 (+24%) and Ethernet from 6,900 to 8,370 (+21%). Mobile connections have increased from 35,000 to approximately 50,000 (+43%).
  • Gamma’s indirect business continues to grow.
    • Gross profit from indirect business increased from £83.0m in 2017 to £97.5m in 2018 (+13%).
    • The number of Channel Partners grew from 1,089 at 31 December 2017 to 1,150 at 31 December 2018 (+6%). The acquisition of new partners has seen a slow down in the second half and growth is increasingly coming from our existing partners.
    • The Gamma Academy delivered 16,602 training courses to Channel Partners during 2018, representing strong engagement and participation across our partner base.
    • Gamma Accelerate delivered a significant increase in marketing campaigns run by Channel Partners during the period, when compared to 2017, and 732 of Gamma’s partners are now actively using the platform.
  • Gamma’s direct business continues to deliver very positive growth.
    • Gross profit up from £26.5m in 2017 to £32.8m in 2018 (+24%).
    • Improved pipeline and several new contract wins have materially increased contracted revenue and margin backlog during the period, which provides a very confident future growth outlook.
    • The direct business delivered significant new multi-year contract wins, including ALDI, BGL Group (financial services), The John Lewis Partnership, Hidden Hearing and The London Stock Exchange Group.
    • In the Public Sector, Gamma achieved Stage 2 Health and Social Care Network (HSCN) compliance, in addition to being awarded new contracts with both Fife and Thurrock Councils.
  • During the period, Gamma made an acquisition in the Netherlands, as a first step in a broader strategy to deliver long term growth and increased scale.
    • The acquisition of DX Groep BV (which trades as Dean One and Schiphol Connect in the Netherlands) on 1 October 2018 marked entry into the European Cloud Communications market.
    • Gamma expanded further in the Netherlands with the acquisition of Nimsys in February 2019. Nimsys is an internet, cloud telephony and associated IT services company serving primarily operators and corporate clients of premium multi-tenant office buildings across the Netherlands.


Andrew Taylor, Chief Executive Officer, commented

“I have been impressed by what I have observed during my first nine months at Gamma, including the high quality of our team and the strength and special market approach of both our direct and indirect channel businesses, which are both delivering strong double-digit revenue and margin growth. The quality and reliability of Gamma’s core network, our service and operations, and our products, coupled with the digital capabilities that we have developed, has directly contributed to the strong results we have announced today. Looking forward, we are focused on building on our strong business foundations at Gamma, and ensuring that we continue to deliver what our customers and our channel partners want. As part of our Gamma 2023 strategy, we look forward to taking the business forward and delivering long term top and bottom line growth”


Notes to Editors

Gamma is a rapidly growing, technology based, provider of communications services to the business market. Gamma’s services, such as Cloud PBX, Inbound Call Control Services, Ethernet, Broadband, Wide Area Networks, and SIP Trunking, are designed to meet the increasingly complex voice, data and mobility requirements of businesses, through the exploitation of its own intellectual property.

Gamma also provides both business and carrier-grade mobile and data services and, as a consequence of its history, has a substantial network capability. These carrier grade network and product capabilities enable Gamma to provide a comprehensive range of communications services. Gamma has enjoyed strong organic revenue and EBITDA growth, which is underpinned by a strong business model, which delivers very high levels of recurring monthly revenue and margin,

A full set of the audited statutory accounts are available at