Gamma Communications (LSE:GAMA) reported revenue of £645.8m for 2025, an 11% increase year on year, while gross profit rose 16%. Growth was driven largely by strong momentum in Germany following the acquisitions of Placetel and Starface, which significantly increased German gross profit and helped lift overall group margins. In the UK, more challenging conditions in the SME market and the ongoing PSTN switch-off affected the Gamma Business division and weighed on statutory profit. Despite this, recurring revenues remained high at 89% and the group continued to generate strong cash flow, enabling £64m of shareholder returns through dividends and share buybacks, with further buybacks and fixed dividends planned through 2027.
The company also reinforced its financial position and strategic footprint, even after moving into a modest net debt position following the funding of the Starface acquisition, share buybacks and dividend payments. Adjusted EBITDA increased 13%, while adjusted earnings per share rose 11%. Key strategic developments during the year included the integration of Starface, completion of a UK cost restructuring programme and the record UK launch of Webex for Gamma. The group also expanded its Service Provider offering to around 27 countries and moved from AIM to the London Stock Exchange Main Market, joining the FTSE 250. The board expects trading in 2026 to be in line with market expectations.
Gamma Communications’ outlook is supported by solid financial performance and several positive corporate developments that highlight its growth strategy and management confidence. However, technical indicators suggest some caution due to weaker momentum, while valuation measures indicate the shares are broadly fairly priced. Taken together, these factors point to a balanced overall outlook.
More about Gamma Communications
Gamma Communications is a FTSE 250-listed European provider of business-critical communications technology. The company offers cloud telephony, messaging, video, AI-enabled customer experience tools and secure connectivity delivered over its own telecoms network. It serves hundreds of thousands of SMEs through channel partners while also working directly with large corporates and public sector organisations. In addition to its UK-focused Gamma Business division, the group has a significant presence in Germany, a global Service Provider arm and an Enterprise division focused on more complex communications solutions.
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