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Published on: September 5, 2017

Strong H1 performance

Gamma has reported strong interim results with near 10% revenue growth and adjusted EBITDA at half our annual estimate for FY 2017E – the latter reflecting good profitability in both the Direct business and the growth products in the Indirect business. Adjusted EPS increased by 15% and the Group has declared a 12% interim dividend increase. Superior performance from Cloud PBX and SIP Trunking continues and growth in data products was also c.20%. The direct business reported a pleasing number of key new business wins and the indirect business saw Channel Partner numbers increase again. Gamma saw increased data traffic on its new mobile network and the Group remains on track to launch its converged fixed/mobile product later in 2017. The outlook statement is positively enthusiastic. At this stage, we make modest increases to our FY 2017E estimates to reflect the strong interim performance and prospects for the second half. We think the balance of risk remains on the upside. Our estimates for FY 2018E and FY 2019E
also increase to reflect the adjustments to the current financial year.

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