CLOUD computing and internet hosting business Iomart has seen its shares rise 3% after signalling annual profits will be ahead of market expectations and it remains in the market for further acquisitions.

The Glasgow business said its adjusted profit before tax is likely to come in at around £14.5 million in the 12 months to the end of March this year, compared to £10.6m.

Chief executive Angus MacSween said there had been strong organic growth while also pointing out good performance from Hampshire-based Redstation and Yorkshire's Backup Technology Holdings, which were acquired in September last year.

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He said Iomart's hosting segment, which covers cloud computing and accounts for around 80% of revenue, had managed to win a substantial amount of new business across the year. The easyspace division, which specialises in web hosting, was said to have performed in line with expectations.

Mr MacSween said: "We are not reliant on any single source for new business. It is a competitive market out there, but we are working hard to raise our profile and show how capable we are.

"That is starting to work for us. We are winning new projects, some wins from competitors and new projects from existing customers as well."

Iomart has also invested in new security products and in keeping pace with what Mr MacSween described as the evolving technology landscape.

He also outlined that the company is seeing its average order size grow and said: "We are certainly seeing bigger projects won now than we did two or three years ago."

The more optimistic economic data produced in recent months is leading Mr MacSween to hope more companies will consider investing in IT improvements during the next few years.

He said: "The reality is most people still buy IT the way they did 15 years ago, so the big change is still to take place.

"It is a very long-term opportunity and a slow drip of things moving into the cloud. That is not happening quickly but it is happening constantly.

"As people become more confident and look at doing technology refreshes, then we will potentially get an opportunity as they look at doing things in new ways." He said Iomart remains on the hunt for further deals as it continues its buy-and-build strategy.

Mr MacSween added: "We are always looking to buy complementary businesses that will add value to us.

"We usually chase people down, but it would be quite nice to get people coming to us."

Shares closed up 7.38p at 251.38p.