(By Anthony Miller – Tuesday 12th May 2009 8:30am). The UK hosting market is not being left out of the industry consolidation story, as Iomart’s £5.25m acquisition of UK peer RapidSwitch illustrates. RapidSwitch seems to have had a growth spurt these past couple of years, with 70%+ revenue increase to £2.6m in FY08 (to March) and similar in FY09. This implies a PSR just over 1x, pretty much in line with the average for the European tech sector (see our lead article above).
On its website, Iomart still claims £20m+ turnover, though this seems to include £12m in revenues from its online directory operation, Ufindus, which it sold to BT in July last year. Restated FY08 revenues (also to March) were £8m when it reported its interims last December. Even then, Iomart was still making an operating loss – but the £20m from BT really helped the bottom line! Iomart is a minnow compared to peer Telecity, which reported £133m revenues last year at 14% operating margin. As more companies look to the 'cloud' for IT delivery, methinks the story for industry consolidation is far from over.
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