Chair's statement

A period of strong strategic execution for Gamma

2020 has been a good year for Gamma in difficult circumstances; our partners and employees have worked hard to deliver continued growth.

Dividend per share
Earnings per share
Adjusted earnings per share

Group revenue for the year ended 31 December 2020 increased by £64.9m to £393.8m (2019: £328.9m) an increase of 20% on the prior year.

Despite lower sales in quarter two due to the COVID-19 restrictions, organic growth in revenue amounted to £28.7m (+9%). Adjusted EBITDA for the Group increased by £15.5m (24%) to £79.0m (2019: £63.5m) whilst organic EBITDA growth was £11.6m. Organic growth excludes the results of acquisitions made in 2020. Adjusted items are explained and reconciled in the Financial review and note 3.

Fully diluted earnings per share for the year increased by 84% to 66.6p (2019: 36.1p). Adjusted earnings per share (FD) for the year increased by 26% to 51.3p (2019: 40.8p), with the main adjusting item being the profit made on the sale of The Loop (the fibre business based in Manchester) which generated a profit of £19.5m. Adjusted items are explained and reconciled in the financial review. The cash generated by operations for the year was £70.3m compared to £54.0m in 2019. The closing cash balance for the year was £53.9m which was the same as at the end of December 2019. This cash balance has been maintained despite investing £15.4m on capital items, £52.8m on acquisitions and paying £10.4m in dividends. The disposal of The Loop generated a cash income of £19.4m. Subsequent to year end, the Group paid initial consideration (on a cash free basis) of £40.2m for Mission Labs Limited.

Overview of the year

As outlined in this report, the year has been a period of strong strategic execution for Gamma with the following highlights:

  • The whole business has responded well to a difficult period; we have been able to run the business with the vast majority of our staff working from their homes.
  • Growth in revenue and profitability has been good despite the economic downturn caused by COVID-19. The Group's recurring revenue model has proved robust and its product set supports businesses which have had to work remotely. The Group has seen cancellations and bad debt remain at the low levels experienced prior to the pandemic.
  • There has been strong growth in the volumes of our key UCaaS products in the UK. SIP Trunking units increased by 17% (this includes MS Teams Direct Routing) and Cloud PBX units increased by 15%. In Europe we now have 114,000 Cloud PBX seats – 16% of our total seats.
  • In April 2020, we launched a Microsoft Teams Direct Routing product to our Channel Partners, making Gamma’s marketleading SIP trunks available to Enterprises using Microsoft Teams. This is an expanding market and we have already connected thousands of individuals to the platform since the launch.
  • During the year, the Group acquired UCaaS providers in two countries – Voz Telecom (Spain) and HFO (Germany). We had started discussions with both businesses before the pandemic made international travel difficult. As we have known management for some time, the integration continues to go well. The UCaaS market in both countries is significantly less penetrated than in the UK but is expected to grow rapidly. We also acquired gnTel in the Netherlands (which provides a product capability and opens up a new route to market through partners who specialise in IT).
  • To improve our product offering in the UCaaS space, Gamma acquired Exactive in the UK (which supports companies wishing to use Microsoft Teams as a UCaaS solution). After the year end we acquired Mission Labs Limited which will give us additional capabilities in the rapidly evolving markets of Cloud Contact Centre and Cloud Communications.
  • The Group continues to develop its product portfolio, it launched Horizon Contact Centre on 2 March 2021 which has been received positively by our channel partners. Further product releases are expected throughout 2021.

Board and governance

I was delighted to welcome Charlotta Ginman and Xavier Robert onto the Board on 8 September 2020 as additional Independent Non-Executive Directors.

Charlotta holds a number of non-executive roles at both AIM and fully listed businesses and is also the chair of the audit committee at Keywords Studios plc, Pacific Asset Trust plc and Polar Capital Technology Trust plc.

Xavier Robert is Head of UK at Bridgepoint Private Equity and was their Global head of TMT from 2011 to 2018. He has acted as a non-executive for many private companies – in many cases as chairman of the Board or chair of the remuneration or audit committees. He is a French national and lives in the UK. He has significant experience of international M&A.

As we announced on the 23 March 2021 Alan Gibbins will be leaving the Board following our AGM in May 2021. Alan has been a NonExecutive Director and Chair of the Audit Committee since our flotation in 2014. I am grateful for all of his hard work and contribution to the Board. Charlotta will take over as Chair of the Audit Committee following Alan’s departure.

On 2 June 2020, the Nominations Committee appointed Martin Lea as Senior Independent Director.

On 5 June 2020, it was decided to rotate the Chair of the Remuneration Committee. Martin Lea stood down as its chair after six years and handed over to Henrietta Marsh. Henrietta has been a member of the committee since joining the Board in April 2019 and has previously chaired remuneration commitees at other premium listed and AIM traded companies.

On 3 August 2020, the Board created a separate Environmental, Social and Governance (“ESG”) Committee. This committee is chaired by Martin Lea and consists of a mixture of Non-Executive and Executive Directors. I am pleased to say that Gamma already has a strong set of ESG credentials; the purpose of the committee is to encourage and oversee the underlying activity and to ensure that we report in line with the emerging standards in this area.

We continue to adhere to the QCA Corporate Governance Code (2018 edition) (the ‘QCA Code’). 

The Board is positive about the outlook for the Group in 2021 and beyond.


At 31 December 2020, we had 1,530 employees in the Group based in seven countries. During the year I was pleased to welcome the staff of Exactive in the UK and Poland, Voz Telecom in Spain and Morocco, HFO in Germany and gnTel in the Netherlands and Germany into the Gamma Group.

We encourage all employees to own shares in the Company. For our UK based employees, we offered a Sharesave scheme for the fifth year in a row. Once again, it was particularly pleasing to see the high take-up, with 449 staff choosing to participate in the scheme (2019: 459). We also run an “Evergreen SIP” scheme which gives employees a further opportunity to buy shares in the company in a tax efficient way. We are actively exploring ways in which our non-UK based employees can own Gamma shares.

The Board recognises the high levels of support and commitment from its staff through what has been a very difficult year. We would like to express our thanks for their dedication, hard work and enthusiasm. Gamma did not take advantage of the UK Government’s Job Retention Scheme (“furlough”) nor similar schemes offered by governments in the other countries in which we operate.


Gamma remains committed to a progressive dividend policy which has seen the dividend increase by between 10-15% every year since our IPO in 2014. Gamma has paid one third of the dividend as an interim dividend with the final two thirds paid as a final dividend once the results for the full year are known. Having carefully considered the interests of all stakeholders, and noting that the Group has continued to be cash generative and has not availed itself of Government support, the Board has continued with this policy throughout 2020.

The Board is pleased to propose a final dividend, in respect of the year ended 31 December 2020, of 7.8 pence per share (2019: 7.0 pence), an increase of 11%. Subject to shareholder approval at the forthcoming AGM, this dividend will be payable on Thursday 24 June 2021 to shareholders on the register on Friday 4 June 2021. When added to the 3.9 pence interim dividend (2019: 3.5 pence) this would make a total dividend of 11.7 pence for the year as a whole (2019: 10.5 pence).


As a business which enables other companies to reduce their carbon footprint by communicating and collaborating from multiple sites and thereby reducing the need to travel, we continue to challenge ourselves on our own environmental credentials. We run a certified CarbonNeutral© network and we have also now committed to supporting the UN Sustainable Development Goals.

Since Gamma’s inception nearly 20 years ago, we have taken our responsibilities to the wider environment seriously and were the first UK carrier to offer “Green minutes” back in 2007. Prior to COVID-19, as a business which is based on multiple sites, we encouraged our people not to travel but rather to use our own collaborative communications tools which both reduces our carbon emissions and promotes employee wellbeing. This has stood us in good stead for the conditions in which we have had to operate throughout 2020.

Current Trading and Outlook

The Board is positive about the outlook for the Group in 2021 and beyond. Our product set is well suited to organisations that wish to work remotely as part of their disaster recovery plans or who will choose to allow more flexible working in future. We believe that experiences learned from the COVID-19 pandemic will demonstrate the advantages of UCaaS to businesses of all sizes across all industries and we expect to see continuous growth in UCaaS product sales.

Gamma will continue to concentrate efforts and investment on supporting our channel partners and end users. We will develop a product set which facilitates flexible working for businesses of all sizes, building on an already strong reputation for operational excellence and service quality.

Richard Last Chair

Also in this section

CEO statement

We have delivered a strong business performance and a very good set of financial results.

Financial review

We have seen this strong performance across all the main areas of the business.

Key to strategy

  1. Cloud Telephony and UCaaS Evolve our strong Cloud telephony position into the UCaaS market
  2. Fixed and Mobile Telecom Build on our Fixed and Mobile Telecom strength to differentiate our proposition from pure OTTs
  3. Company Expansion Expand into Europe to gain continued growth and scale
  4. Digital progression Continue to build on our digital capabilities to assure agility and sustain competitiveness

Key to KPIs

  1. Revenue
  2. Gross profit
  3. Gross margin
  5. Cash
  6. Cash generated by operations
  7. EPS
  8. Adjusted EPS

Key to risks

  1. Unplanned service disruption
  2. Data Loss and Cyber Attacks
  3. Customer service experience
  4. Suppliers
  5. Market landscape
  6. Legal and regulatory
  7. Our people
  8. M&A
  9. Climate change