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Data Centre ownership powers managed hosting growth

29th July 2008 · Press Releases

Managed hosting and data centre services provider iomart plc has reported a 17 per cent rise in its sales of managed hosting services in the financial year 2007/08.

Revenues from its fledgling data centre and managed services company have increased by 63 per cent to £1.4m, with its established SME web hosting business, Easyspace, seeing a rise of 9 per cent to £6.3m.

Earlier this month the AIM-listed company revealed it had disposed of internet directory search business Ufindus to BT for the sum of £20m to concentrate on its data centre and managed hosting services.

Angus MacSween, iomart’s CEO stated: “This has been a transformational year with the successful sale of Ufindus for £20m and the development of our complex managed hosting business using our own network of carrier neutral datacentres. We are now well positioned to address our chosen market with the firepower to make strategic acquisitions in combination with our organic growth.”

In February 2007, iomart purchased four data centres and has since opened two fully-refurbished facilities – one in Glasgow, and one in the heart of the City of London. A third will be launched in Nottingham next week, with the final data centre, Leicester, expected to be ready for business during August.

Despite investing £3m in its data centre infrastructure over the year, the group’s profitability has suffered limited impact with EBITDA of £1M (2007 £1.3M).

The data centre investment allows the company to offer its corporate clients a guarantee of 100 per cent uninterrupted service, or uptime, as the company can now offer a full end to end service proposition from domain name through to data centre.

Angus MacSween, CEO of iomart, said: “Our focus on the data centre offering is paying off and we’re in a great position to win more high-margin corporate business. A complete ‘one source’ managed hosting service is very different to what’s on offer from other providers, ie space and power only, which puts us in a very strong position in the market.”

“We’ve equipped our four data centres with the latest technology and ensured that we have ample power to cope with expected future computing demands. We suffer none of the legacy problems that face many of today’s operators and this, coupled with a decade of hosting expertise, has been a significant selling point for us. This has been demonstrated by the group winning its largest single contract worth £5.75m over 5 years with BT.”

The average server rack now consumes 10 times more power than it did less than a decade ago. With this trend set to rise, future efficiencies have also been considered in the design of the data centres. In Nottingham for example iomart has installed the latest in efficient down flow units which are estimated to consume 7% less energy annually than the units they have replaced.

Angus said: “We recognise that we have a corporate, social and commercial responsibility to achieve the most efficient data centres that we can, and we will constantly seek to reduce our environmental impact where possible.”

The company also revealed it will look to use the proceeds of the Ufindus disposal to explore acquisition options over the next 12 months.

Angus MacSween added: “With the sale of Ufindus we find ourselves in the enviable position of having sufficient funding to fully underwrite our current business plans, without having to place reliance on borrowing facilities at this testing time in the credit market. We will be exploring a number of acquisition opportunities during the next year which will enable us to add revenues, skills and savings to the group”

A copy of the preliminary results can be found here:

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