By Kristy Dorsey

Cloud services group iomart is returning to the acquisition trail following a year-long hiatus during which it reviewed operations and refreshed its strategy under new chief executive Reece Donovan.

Mr Donovan, who replaced founding chief executive Angus MacSween in October of last year, said the Glasgow-based company is now beginning “a new chapter” in which it will look to acquire businesses adding a collective £10 million annually to revenues. Through this and organic growth, it aims to nearly double turnover to £200m within five years.

“We are developing a shortlist of potential acquisitions and we will be engaging with potential targets in the coming months,” Mr Donovan said.

His comments came as iomart revealed a slight decline in revenues and a 25.7 per cent fall in profits for the year to March 31. Mr Donovan said he was proud of the company’s performance during a “very testing” year that almost perfectly coincided with the start of the first lockdown to control the spread of the coronavirus.

READ MORE: Glasgow cloud computing firm's shares drop ten per cent

Turnover of £111.9m was in line with that predicted in April when iomart warned in its half-year results that the third UK lockdown had hindered the “green shoots of growth” expected in the second six months of the financial year. Full-year pre-tax profits tumbled from £16.8m to £12.5m.

Chief financial officer Scott Cunningham noted that the company continues to generate high levels of cash, while recurring revenues accounted for 90% of last year’s turnover. The business had net cash of £23m at the end of the year, with debts of £54.6m.

Although he remains “a little uncertain about the bounce back” if Covid variants affect the lifting of lockdown restrictions, Mr Donovan said current trading is in line with expectations.

READ MORE: New broom at iomart looks to ‘tweaks’ for future growth

“We have proven the robustness of the business, underpinned by high levels of recurring revenues, breadth of customer base and strong cash generation,” he said. “This is now enhanced with a clear strategic vision and roadmap to re-position the group for growth, both organically and through selective acquisitions, and the board is increasingly confident in the positive outlook for the long-term prospects for the group.”

Underlining this confidence, iomart has proposed a 14.5% increase to its final dividend, up to 4.5p from 3.93p previously.

Shares in iomart, which employs 150 of its 400 UK staff in Glasgow, closed 8p down to finish yesterday’s trading at 281p.