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Iomart warns of softening market
Trading update lifts lid on financial performance ahead of its fiscal year coming to a conclusion next month
Managed service provider Iomart has issued a trading update revealing a “softening” in trading conditions in the past couple of months.
At the same time, the firm has notified shareholders of the decision by its chief financial officer, Scott Cunningham, to step down to pursue a fresh opportunity outside the IT industry.
He will stay in place until June to ensure a smooth transition as the channel player completes its fiscal year reporting cycle in March.
Cunningham has been with the business for seven years, being involved at a time when it has made some significant M&A moves. The search for his successor has now started.
“On behalf of the board and the wider Iomart team, I wish to thank Scott for his significant commitment and contribution to Iomart over the last seven years and wish him every success in his new role,” said Richard Last, executive chair of Iomart Group.
The announcement of his planned departure was accompanied by a trading update that revealed the firm had closed out 2025 and started this calendar year facing tough market conditions.
“The group experienced a softening in trading during December and January, including an increase in customer churn compared to the earlier part of the financial year, particularly in certain high-margin areas,” the update stated. “Growth, albeit lower than expected, has been achieved in Azure, security and Microsoft 365, where margins are traditionally lower.”
Strong sales pipeline
That gloomy description of the past couple of months was offset by talk of a strong sales pipeline and an expectation of net order bookings coming in as positive for the financial year.
Iomart has been on an efficiency drive, and that continued with the firm achieving its ambition to deliver annualised savings of over £5m. “Overall, for the year to 31 March 2026, the board now expects group revenue to be broadly in line with, and EBITDA to be just below, the lower end of current market expectations,” the trading update added.
Iomart’s full year will end with analyst expectations forecasting revenue in the range of £157.6m to £159.1m; adjusted EBITDA in the range of £27.7m to £28.5m; and adjusted pre-tax losses somewhere between £2.1m to £1m.
The last insight into the firm’s trading performance comes a few months after the firm shared its H1 progress, and revealed the impact of its M&A activity in the previous fiscal year.
In October 2024, the firm picked up Atech Cloud to add more depth to its Microsoft services and Azure capabilities, and that acquisition did contribute to Iomart’s 2025 first-half numbers, covering the six months to 30 September.
The numbers showed a 25% increase in group revenue to £77.7m, which included £21.7m from the Atech acquisition.
The firm had previously warned investors that organic revenues would be down due to expected customer churn, and as a result, there was a decline of £6m.
Iomart has also faced the challenge of dealing with changes at the top, after after Lucy Dimes stepped down as CEO last May.
