CloudCoCo on track for FY growth

Managed services player CloudCoCo has issued a trading update that indicates the channel player is on track to deliver full-year growth.

The update covers the year to 30 September, with the firm on track to deliver at least £26m in revenues, compared with £24.2m in FY22. Trading Group EBITDA should also come in around £1.9m (FY22: £1.6m).

Earlier this year, the firm indicated it was on a mission to break through the £100m revenue barrier in the next few years, and the update showed further progress in that ambition. The firm signed 42 new logo customers during the fiscal year.

Another highlight was the 110% increase in the e-commerce sales from the MoreCoCo side of the business, reaching £4.2m.

Growth in the year has come against a backdrop of challenging macro-economic conditions and belt tightening by customers. CloudCoCo has also benefited from being able to identify some cost savings and efficiencies.

Part of the process of scrutinising costs has seen the firm’s recently formed commercial team review all supplier relationships and reduce the number from 450 to 220, identifying more than £50k of ongoing monthly savings.

CloudCoCo’s relationship with Ingram Micro was also highlighted as one of the positives during the year, responsible for driving further growth.

Mark Halpin, CEO of CloudCoCo, said that it was able to meet market expectations despite some of the challenges. “It’s been a challenging year, as anyone in the industry will tell you, so we’re pleased to have delivered a performance in line with market expectations while continuing to lay the groundwork for our long-term success,” he said.

Security and multicloud have been two of the areas that have continued to show growth across the industry, and Halpin said the firm had made a conscious decision to increase its emphasis on its capabilities around that area.

“We recognised the changing IT landscape was creating huge opportunities in cyber security and multicloud and have responded by bolstering our capability in these core pillars. Pipelines are growing at a healthy rate as a result and we’re confident in our ability to gain further traction in FY24,” he added.

The update touched on M&A opportunities, revealing that directors were continuing to appraise pathways ahead. However, there was also a focus on repaying loan notes and driving debts down ahead of an October 2024 repayment date.

“I would like to reassure investors that refinancing the debt is a key priority for the board, allowing CloudCoCo to continue to make progress both organically and through acquisition towards its ambition of becoming a £100m revenue company,” he said.

During its ‘22 fiscal year, the firm sealed four acquisitions, including IDE Group Connect and Nimoveri, with those deals contributing positively to the bottom line. This move also helped the business to shape a strategy around four main areas: connectivity, multicloud, collaboration and cyber security.