Slide 1: 2023 Report & Accounts
2023 REPORT & ACCOUNTS redcentric
Slide 2: Agenda
Agenda Introductions Operational review Financial review redcentric ;
Slide 3: Operational review
Operational review Peter Brotherton — Chief Executive Officer redcentric
Slide 4: Operational review - Executing the acquisition strategy
Operational review - Executing the acquisition strategy Significantly enhanced service capability Transformational scale acquisitions e Adding to the two capability acquisitions made in FY22, a e During FY23 the acquisitions of the business and assets further capability acquisition was completed in
Slide 5: Operational review - Managing Electricity costs
Operational review - Managing Electricity costs Volume kW Total Cost £m Cost per kWh 100.0 30.0 70.0 60.0 500 25.0 20.0 500 60.0 SO 40.0 15.0 40.0 30.0 4 10.0 200 20.0 40.7 5.0 too 7 2 - - FY22 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 BHI mH2 BHI mH2 ¥ The volume of electricity usage has increased Y
Slide 6: Savings - £m Completed
Savings - £m Completed FY23 Completed FY24 In Progress FY24 total Total FY24 FY25 Total ✓ Data Centre and 5.0 0.5 1.4 1.9 6.9 0.4 1.5 1.9 property rationalisation Staff efficiencies 4.7 - 0.2 0.2 4.9 - 0.2 0.2 ✓ Energy efficiencies 3.0 - 2.7 2.7 5.7 1.3 1.3 2.7 Supplier efficiencies 3.5 0.8 - 0.8 4.
Slide 7: Operational review — Organic Growth
Operational review — Organic Growth Additional capability and enlarged customer base is driving organic growth v Positive net new business (new business plus or minus renewal churn less cancellations and excluding inflationary price increases) seen in each of the last four quarters ended 30 June 202
Slide 8: Financial review
Financial review David Senior — Chief Financial Officer redcentric
Slide 9: Financial performance — revenue and profitability
Financial performance — revenue and profitability peso ‘ee £141.7m (+52%) £76.4m (+113%) £24.5m (+3%) £19.1m (-7%) Recurring revenue of £128.5m Operating cost increase largely Adjusted EBITDA margin of 17% Net Capex increased to £5.4m (+55%) equivalent to 91% of total reflects additional costs (FY22
Slide 10: Financial performance — liquidity & earnings
Financial performance — liquidity & earnings rmalised net cash / (debt) Net bank debt Trade debtors Adjusted earnin movement per share £13.6m (-12%) £1.8m reduction on prior year largely reflects improved cash generated in operations offset by increased capex and interest £35.6m (+2182%) Increase of
Slide 11: Group income statement
Group income statement FY22 FY23 Movement f'm f'm % Revenue 93.3 141.7 52% Cost of Sales (33.8) (40.8) -21% Gross Profit 59.5 100.9 70% Gross Margin 63.8% 71.2% Electricity Costs (3.3) (21.6) -558% Other Operating Costs (32.5) (54.8) 69% Adjusted EBITDA 23.7 24.5 3% EBITDA Margin 25.4% 17.3% Depreci
Slide 12: Net debt
Net debt : Adjusted EBITDA 24.5 3% Working capital movements (1.4) -65% Transfer from intangibles to cost of sales - -100% Non-cash provision movement - -100% Cash generated from operations 23.1 20% Capital expenditure 6.4) 69% Corporation tax (07) -372% Interest paid (1.8) 3420% Loan arrangement fe
Slide 13: Summary balance sheet
Summary balance sheet The net asset position has reduced compared to the prior period, predominantly due to the increase in net debt outlined previously. Balance sheet Net debt analysis Adjusted net debt of £35.6m as at 31 March 2023 (FY22: net debt of £1.6m). Main year on year movements reflect: FY
Slide 14: Dividend policy and share buyback
Dividend policy and share buyback A final dividend of 2.4p per share is recommended by the Board, resulting in total dividend for FY23 of 3.6p per share (FY22: 3.6p per share). Returns to shareholders totalled £5.6m in the year reflecting continued strong cash generation: * £3.7m FY22 final dividend
Slide 15: Acquisition accounting
PUBLIC Acquisition accounting redcentric
Slide 16: Acquisition accounting - Sungard
Acquisition accounting - Sungard During the year, the Group's trading subsidiary Redcentric Solutions Limited acquired the consulting business and certain business and assets relating to three data centres (“DCs”) from Sungard Availability Services (UK) Limited (in administration). The interim resul
Slide 17: Summary & outlook
Summary & outlook Peter Brotherton — Chief Executive Officer redcentric PUBLIC
Slide 18: Summary and outlook
Summary and outlook Summary Execution of the strategy has provided the platform that has enabled the business to significantly grow revenues and expand margins. Revenue growth of 52% driven by the annualised impact of the FY22 acquisitions together with the Sungard and 4D acquisitions made in FY23.
Slide 19: Appendices
PUBLIC Appendices redcentric
Slide 20: Market overview
Market overview David Senior — Chief Financial Officer redcentric PUBLIC
Slide 21: Transformed service offering
Transformed service offering Having transformed our service offering through recent acquisitions, the Group is ideally positioned to capitalise on high growth areas of the market Pre acquisition recurring revenue contribution (FY21) Post acquisition recurring revenue contribution FY24 (estimated) 8%
Slide 22: High growth market opportunity
High growth market opportunity Transformed cloud and security capability provides access to high-growth segments of the market UK IT services market growing at 7% CAGR Total UK IT services market is expected to be valued at £183bn by 2025 (estimated £146bn in 2022). There are several areas that are
Slide 23: Our response to market drivers
Our response to market drivers Outlook remains positive, supported by robust market dynamics and a compelling service offering Digital transformation accelerated by COVID-19 Newly created Cloud Services division with transformed capability Complete end-to-end digital transformation offering Growing
Slide 24: Company overview & investment highlights
Company overview & investment highlights redcentric
Slide 25: Redcentric at a glance
Redcentric at a glance Redcentric is a leading IT managed services provider delivering highly available connectivity, cloud and collaboration solutions that help public and private sector organisations succeed Formed in 2013 when Redstone reversed into InTechnology Plc The Group is comprised of 7 hi
Slide 26: Transforming and managing your mission critical IT infrastructure
Transforming and managing your mission critical IT infrastructure KEEPING 20,000 CUSTOMER SITES CONNECTED HREKEKEKRAHKE KEK users to communicate & collaborate ©®O© 6086060806080 PROVIDING ASSURANCE TO 100S OF ORGANISATIONS NHS DIGITAL PARTNER 4 © hosting national Ae CRITICAL INFRASTRUCTURE ©80008000
Slide 27: Our enhanced service portfolio
Our enhanced service portfolio fay (#) Cloud Digital transformation consultancy Disaster recovery (::) Connectivity SD-WAN HSCN connectivity Managed WAN Public cloud connectivity Ur Managed LAN (Azure & AWS) Tomi ieee Managed wireless networking 5 7 ne Modern workplace Colocation Virtual desktops Ma
Slide 28: The investment proposition
The investment proposition Growing market driven by the move towards off- premise solutions and mobile access to secure services Digital transformation accelerated by COVID-19 A highly fragmented market undergoing consolidation with ample acquisition opportunities Diverse customer base Growing publi
Slide 29: Customer sectors
• • • • • • Healthcare Public Sector Healthcare Local Authority Other Public Sector Manufacturing Service Provider Retail I.T & Telecoms Charities Legal Leisure Recruitment Construction Media Property Insurance Housing Associations Education Financial Services Accountants Other 29
Slide 30: Our responsibility
Our responsibility We are committed to being a socially, economically, and environmentally responsible business. This is reflected in our actions and our corporate policies. * Continuously evolving our national corporate social responsibility strategy to support key customers in their local areas. +
Slide 31: Thank you
PUBLIC Thank you redcentric