Gamma Communications trades 'slightly above' expectations in first half

Technology-based communications provider Gamma Communications expects earnings per share and underlying earnings to be "slightly above" market expectations after continuing to perform well through the first six months of the year.

Based on its first-half performance, Gamma said on Wednesday that it now expects full-year revenue to be within the range of market expectations, while EBITDA and EPS were tapped to come in just ahead of expectations.

The AIM-listed group also said it continued to have "a very robust balance sheet", with strong cash generation from trading activities.

Cash conversion from EBITDA was anticipated to be in line with previous levels and the closing cash balance for the half year was estimated to be approximately £44.6m compared to £35.5m at the end of the previous year.

Chief executive Andrew Taylor said: "I am delighted to announce that in the first half of 2019 we have continued to deliver strong revenue and gross profit growth across all business areas, representing a positive performance.

Discussing the update, analysts at Peel Hunt said: "Half year is done, and Gamma is already confident enough to see EBITDA and EPS slightly above the range of expectations in the market today, we will put ours up by 4%.

"The company continues to trade at a premium, at 30x 2019 EPS and beats like today help explain why. However, we continue to be an 'add'".

As of 1015 BST, Gamma shares had picked up 3.36% to 1,106p.