(GAMA:AIM) 900p


Gain to date: 38.9% Orig­i­nal en­try point: Buy at 648p, 18 Jan­uary 2018

We knew half year re­sults from Gamma Com­mu­ni­ca­tions (GAMA:AIM) would be pos­i­tive after July’s up­date, and so they proved.

The head­line num­bers show earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) up 31% to £21.8m on rev­enues 18% ahead at £137.6m, al­beit partly ob­scured by new ac­count­ing rules.

In short, the new rules af­fect the treat­ment of share based pay­ments and de­pre­ci­a­tion, which now must be counted as part of the cost of do­ing busi­ness.

While this led to 2017 fig­ures be­ing re­stated there is no cash cost to the com­pany, nor does it change Gamma’s fan­tas­tic po­si­tion­ing in the fu­ture of com­mu­ni­ca­tions, es­pe­cially as or­gan­i­sa­tions in­creas­ingly adopt cloud-based solutions.

These are the first re­sults un­der new chief ex­ec­u­tive An­drew Taylor and in­vestors can take con­fi­dence from his plans to largely stick to the knit­ting that has worked so well for years.

But there is the hint that ac­qui­si­tions and in­ter­na­tional growth may be­come more mean­ing­ful to the growth story down the line.

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