Redcentric expects steady top line as reorganisation continues

(Sharecast News) - IT group Redcentric said it expects "stable" revenues this year following its business restructure, but expects the potential sale of the data centre division to generate a "significant" return of capital to shareholders. The company, which in February split its managed service provider (MSP) business unit from data centre (DC) operations, just last month confirmed it was in advanced talks with a third party to sell the DC division.

As a result, the DC business was regarded as a discontinued operation in the company's full-year results.

"Developing and growing the MSP business unit is the ongoing focus of the group where the board sees an opportunity to build additional shareholder value," Redcentric said.

Revenues for continuing operations were 8.3% higher at £135.1m, driven by increased VMware licence sales, made possible as Redcentric became one of a smaller pool of VMware selected partners after the latter was acquired by Broadcom.

Adjusted EBITDA for continuing operations were up 8.1% at £18.8m, helped by the operating leverage of increased business volume achieved in the year, the company said.

In addition to the business shake-up, Redcentric has also changed up its board in recent months with the appointment of a new CEO, Michelle Senecal de Fonseca, in May and a new CFO Tony Ratcliffe in August.

In Senecal de Fonseca's outlook statement, she said: "Being just over seven months post the split of the group into two business units and also a few months into my tenure as CEO, the focus for FY26 is to drive recurring revenue within our MSP business, whilst actively managing the cost base to deliver the strongest possible margin and cashflow performance over the medium to long-term.

"In the current market environment, the board currently expects that FY26 MSP revenues will be broadly flat versus FY25 MSP revenues and management is focused on managing general cost pressures."