GLASGOW-based cloud computing specialist iomart has defended its decision to pay a relatively generous dividend in spite of public unease about payouts to investors amid the crisis caused by the coronavirus.

Chief executive Angus MacSween noted iomart directors had been aware of “a lot of noise about not paying dividends”. However, he said directors felt it was ok to reward shareholders as the firm was in good shape and had not taken any furlough money from the Government to help cover its payroll costs.

“It would have been harder to pay a dividend had we been taking Government money to cover costs,” said Mr MacSween. “So I think we feel on the high ground there.”

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Mr MacSween noted that while a small number of employees had been given time off because their roles had not been required temporarily iomart had continued to pay their wages in full.

All the staff concerned are back at work at the firm, which employs 175 people in Glasgow.

Mr MacSween confirmed the company had not laid any people off amid the coronavirus crisis and had no plans to cut any jobs.

While many firms are facing big challenges as a result of the coronavirus, iomart expects to receive a boost to trading following the changes in behaviour it has triggered.

The huge rise in online activity recorded amid the lockdown could increase demand for the services provided by iomart. The company runs data centres that house powerful servers, which customers can run their IT systems on and use for back up purposes.

“From the e-commerce perspective there’s a lot more activity going on online, clearly that creates more data, more demand for bandwidth, storage etc, so there is an upside to all of this for us, there’s no doubt about that,” said Mr MacSween.

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He was speaking after iomart posted a four per cent increase in pre-tax profits for the year, to £16.8 million in the year to March 31, from £16.2m in the preceding period.

The outlook for the economy deteriorated markedly in the final quarter of the latest year as lockdowns were imposed around the world in response to the spread of the coronavirus.

However, Mr MacSween reckons the company can maintain strong organic growth amid advances in technology and the growing trend for firms to outsource IT operations.

iomart is in the market for more acquisitions as the firm looks to capitalise on the fact the market it operates in remains fragmented, with lots of relatively small players.

Mr MacSween said the company expects to make further bolt on acquisitions in the current financial year but could do a bigger deal if a suitable opportunity came up.

iomart bought two firms in England earlier this year, in deals worth up to £7.2m in total. The businesses it bought serve around 2,000 customers in total.

In iomart’s results statement, Mr MacSween said trading in the first two months of the current financial year had been in line with expectations.

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“Business development continues, with good discussions with both new and existing customers, although timing of new projects is likely to be more uncertain for the remainder of this calendar year,” he noted.

iomart’s chairman Ian Steele noted the company proposed to pay a final dividend of 3.93p per share for the latest year.

“With this final dividend payment, the total for the year will be 6.53p, equivalent to the maximum pay-out ratio under our current policy of 40% of adjusted diluted earnings per share,” he told investors.

iomart paid dividends totalling 7.46p per share in the preceding period.

Total revenues increased to £112.6m in the latest year, from £103.7m.

Shares in iomart closed up 11p at 367p.