Iomart Group PLC on Wednesday said it is confident in its medium-term prospects amid growing demand for cloud computing and cyber security solutions, as it posted a half-year profit fall.

Glasgow, Scotland-based cloud computing and IT managed services provider said pretax profit dived 77% to £1.0 million in the six months to September 30 from £4.4 million a year ago.

Revenue remained flat at £62.0 million, but cost of sales increased 3.6% to £28.6 million from £27.6 million and administrative costs increased 7.3% to £30.1 million from £28.1 million.

In response, Iomart cut its interim dividend by 33% to 1.30 pence per share from 1.94p a year prior.

In early October, Iomart announced an agreement to acquire Kookaburra Topco Ltd, the holding company of Atech Support Ltd, for £57 million.

The deal aims to position Iomart in ‘the highest growth areas of the cloud computing market’.

Chief Executive Officer Lucy Dimes said: ‘The Atech acquisition is a key step in delivering our ’bigger, better, bolder’ strategy. The strength of the combined business, our order bookings momentum and the transformation and efficiency programmes we have put in place, mean we have entered the second half of the year in a considerably strengthened position.’

Looking ahead, Dimes added: ‘The growing demand for cloud computing and cyber security solutions, increasing complexity of the technical landscape, and need for a trusted and highly accredited partner with a strong delivery track record, give the board confidence in the outlook for the medium-term prospects for the group’.

Iomart shares rose 3.1% to 96.90 pence each late Wednesday morning in London.

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