Redcentric continues on MSP journey

Redcentric has been a business in transition as it laid the groundwork for its future as a managed services provider (MSP).

The progress of that shift has been charted through financial results, trading updates and the sale last October of the firm’s datacentre operation for £115m.

The latest trading update, for the year ended 31 March, emphasised the recurring revenues remained high at 88%, with revenues for the MSP business coming in at £132.1m compared to £135.1m a year earlier. Gross profit margin was flat coming in at 61.0%. Adjusted EBITDA for the MSP business was ahead of market expectations, coming in around £17.5m

A decent performance in the second half of the year was attributed to the performance of the MSP business, along with continued discipline around costs. The business made some investments in H2 designed to accelerate the growth of the managed services business. It indicated that while the market remained competitive, its focus had not shifted from looking to gain and maintain higher-margin business.

The trading statement also revealed the firm had improved its financial position with net debt on 31 March reduced to £36.8m compared to £41.9m in FY25.

As well as keeping a close eye on costs, the business benefitted from the datacentre sell-off to Stellanor Datacenters Group, which closed in April, that has strengthened its cash position.

“I am pleased to report that we have delivered adjusted EBITDA ahead of expectations,” said Michelle Senecal de Fonseca, CEO at Redcentric. “This reflects strong operational execution, disciplined cost management and the successful delivery of our strategic priorities. With a significantly strengthened balance sheet following the datacentre disposal, we are well-positioned to accelerate growth and deliver sustainable value for shareholders in FY27 and beyond.”

The statement added that the results provided the board with confidence that the business was heading in the right direction, charting a managed services future delivering high-margin business. With costs, controls and a decent services mix ,there are positive expectations for the medium and longer term.

While issuing the trading update, Redcentric announced the appointment of Tim Sykes as its chief financial officer and executive director, with immediate effect. He comes with a CV that stretches back over three decades, including 15 years as CFO at Proactis Holdings, and has experience in M&A. He concurrently served as CFO at Avacta Group PLC, Eleco and Altitude Group.

Sykes stepped into shoes recently filled by Tony Ratcliffe, who had worked with the business since August last year on a fixed-term contract, with a brief to support the sale of the data centre business and the transition to a pure-play MSP.

Senecal De Fonseca said Sykes had the experience the business could tap into as it continues to evolve its market proposition. “His extensive experience in scaling technology companies, executing M&A transactions and driving shareholder value on AIM will be highly valuable as we focus on accelerating growth in our MSP business,” she added.