Adept Technology Group plc (LON:ADT), one of the UK’s leading independent providers of managed services for IT, unified communications, connectivity, and voice solutions, today announces a trading update for Q3 of the current financial year ending 31 March 2021.
Resilience supports reinstating guidance
In the September 2020 interim results announcement we noted the incredible resilience of the AdEPT business model despite the headwinds created by the unique challenges posed by the COVID-19 pandemic. Whilst a number of these challenges remain, given that we are currently in a UK-wide lockdown, the resilience of the AdEPT business model has been maintained and the Company is pleased to announce that it is reinstating guidance for the current year outturn and the year ending 31 March 2022. Professional investors who wish to view the research note published by the Company’s Nominated Adviser & Broker can do so by subscribing to the Research Tree website here: AdEPT Research
Q3 (Sep-Dec 2020) trading update
Trading in Q3 of the current financial year (October to December 2020) remained resilient and in line with management expectations, with the Q3 total revenue higher than the average achieved in the two quarters in the period ended 30 September 2020. New sales order volumes remained at a healthy level, business call volumes started to return post-Summer, the project delivery team remained focused on the rollout of key customer projects and the onsite resources, such as school technicians, returned to customer premises where permitted and safe to do so. During Q3 the Company did not make use of the Coronavirus Job Retention Scheme due to sustained customer demand and has no intention of using the scheme during Q4.
The Company continued to focus on cash management in Q3, part of which includes continual monitoring of leading indicators, such as customer credit. This focus led to a further improvement in customer credit collection from the 33 days achieved in September 2020 to 28 days at 31 December 2020. The Company has been able to utilise the positive cash flow to reduce its senior borrowings in Q3 by £1 million and the Company has since repaid the deferred Q1 VAT liability at the start of Q4. Furthermore, the Company does not have any outstanding deferred acquisition payments due.
Project Fusion
In Q3, AdEPT has made further progress on the ‘One AdEPT’ project to bring together the sales, marketing, financial control and operating systems. Since September 2020, a further operating division has been migrated to the centralised CRM and finance platforms. This achievement means that 6 of the 8 operating sites are now benefitting from Project Fusion, with over 60% of Group employees now using the platform. The final remaining operating divisions’ migration is due to go live in April 2021.
During Q3 AdEPT has been further developing its service offerings for the benefit of customers in three specific areas:
· AdEPT Consulting – an initiative to help customers move to a secure environment for their workforce across disparate locations, in a cloud enabled landscape. This team is focusing on; security risk assessments, cloud migrations and network resilience.
· Extending cloud services – providing hosted SIMS for education clients and hosted Sage for small to medium enterprises, deployed on the AdEPT Nebula platform.
· Strengthening AdEPT Nebula – Nebula is the AdEPT owned platform that supports over 250 customers who take various services from our portfolio of: Nebula Cloud, Nebula Security, Nebula BC/DR, Nebula Voice, Nebula Apps and Nebula Network.
Delivering despite Covid-19 restrictions
Despite the challenges of being in and out of lockdown over the last 10 months, AdEPT has continued to deliver business critical services to its customer base, including some key projects as follows:
AdEPT supports Department for Education (DfE)
AdEPT Education is one of a limited number of accredited suppliers in the country that are able to help schools migrate to the cloud platforms of both Google and Microsoft on the Google G Suite for Education and Microsoft Office 365 Education platforms respectively. In support of the DfE initiative, AdEPT has digitally enabled more than 500 schools; cloud enabling schools to help them with remote education. The valued partnerships established as part of this initiative will allow AdEPT to roll out digital education platforms as well as additional upsell services such as; managed support contracts, migration of content, maintenance and project work on these cloud platforms.
AdEPT Education is now ideally positioned to offer user training to teachers and technical users of these platforms to help further support them thought the pandemic lockdown measures, and beyond.
AdEPT helps NHS deliver technology transformation
With its mission of ‘uniting technology, inspiring people’, AdEPT Technology Group has helped the NHS succeed in a major technology transformation. AdEPT provided Health & Social Care Network (HSCN) connectivity across the UK, with the most concentrated success being a programme across the entire Kent NHS, in a contract valued in excess of £4m. This programme provided connections to over 400 care homes, hospitals, and doctors’ surgeries in a project that will be of huge benefit to clinicians and the public at large.
The legacy N3 network, replaced by the HSCN, was eventually switched off in November 2020 ultimately saving the NHS an anticipated £75m a year, and triggered the following complements from the NHS for AdEPT;
“On behalf of NHS Digital, I wish to express my sincere gratitude to AdEPT for your co-operation in driving HSCN migration activity. I have no doubt that without your organisation’s hard work and commitment we would not have arrived at this point so soon.” Patrick Clark, Associate Director of Infrastructure Services at NHS Digital.
Capital Markets Day
In the run up to year end, AdEPT will be hosting a Capital Markets Day in March 2021 for any investors who are interested in gaining a greater insight into recent activities from the perspective of customers, suppliers and the vendors of businesses acquired by AdEPT. Further details on how to access the event can be obtained from the Company’s Nominated Adviser and Broker, N+1 Singer.
Board Changes
The Company is also pleased to announce that Christopher Kingsman, former Non-Executive Director of AdEPT will be rejoining the Company’s Board effective from 1 March 2021.
Year-end trading update
Adept Technology Group will provide a further trading update in early April 2021 in respect of the trading results for the year ended 31 March 2021 which are expected to be announced in July 2021.
