Gamma Communications has reported first-half revenue growth of 4% and sharply stronger performance in Germany as the communications group progresses towards a recommended £1.015bn takeover by private-equity investor Epiris.
Revenue increased to £330m in the six months to 30 June from £316.6m a year earlier, while gross profit rose 4% to £178.1m.
Adjusted EBITDA increased 2% to £72.5m and reported profit before tax rose 15% to £50.1m. Adjusted profit before tax declined 3% to £59.2m as depreciation and amortisation increased and interest income reduced.
The geographical split shows a growing contribution from continental Europe.
Gamma’s German SME business delivered 21% revenue growth to £59.2m and a 30% increase in gross profit to £44.8m.
Organic German gross profit grew 11% on a constant-currency basis, with cloud communications expanding across partner-led and digital channels. The Starface business acquired in February 2025 contributed for a full six months.
UK SME revenue was broadly flat at £141.7m, while gross profit fell 7% to £69.3m as competitive pricing pressure offset volume growth in cloud and connectivity products.
Germany accounted for 25% of group gross profit during the period, up from 20% a year earlier, increasing the importance of the market within Gamma’s overall earnings mix.
Service Provider revenue increased 7% to £48.2m and gross profit rose 6% to £23.1m, supported by higher voice traffic and international expansion.
Gamma now operates regulated calling services in 28 countries and has established operations in Australia, New Zealand, and Singapore, with licensing obtained in the Philippines.
Enterprise revenue and gross profit both declined 2%, reflecting continuing pricing pressure on ethernet connectivity contracts, although the group reported new and extended customer wins across the UK and continental Europe.
The interim numbers follow Gamma’s board recommendation of a cash offer from Epiris. The proposed transaction values the entire issued and to-be-issued share capital at approximately £1.015bn.
The takeover changes the context in which current operating performance is being assessed. The board has concluded that the valuation and certainty attached to the transaction outweigh the risks of continuing as an independently listed company.
Epiris intends to increase investment and place additional emphasis on innovation and artificial intelligence. Gamma has itself been accelerating AI-enabled products across customer service, security, and data.
Enterprise communications is undergoing a broader technology transition. Traditional fixed-line telephony is being replaced by cloud calling, unified communications, contact-centre software, full-fibre connectivity, and integrated collaboration tools.
Gamma is managing that transition while the UK approaches withdrawal of the public switched telephone network. The company expects a one-off headwind ahead of the January 2027 switch-off, although line churn during the first half was lower than anticipated.
The group has also expanded its relationship with Cisco. Webex for Gamma is due to become available across the UK, Germany, Spain, and the Netherlands, with approximately 90,000 seats deployed by the half-year point compared with 56,000 at the end of 2025.
Cash generation remained strong. Adjusted cash generated from operations increased 10% to £70.3m, with cash conversion rising to 97% from 90%.
Net debt stood at £3.8m at the end of June, down from £9.3m at the end of 2025, despite shareholder distributions and the earlier £152.2m acquisition of Starface.
The relatively low leverage gives the company financial flexibility as it enters the takeover process.
Gamma has suspended further dividend payments before the proposed acquisition becomes effective, and its existing share-buyback programme is also suspended under agreed trading parameters.
The results illustrate several characteristics that have attracted private-equity interest: 90% recurring revenue during the half, established SME distribution, expanding European operations, and business-critical communications infrastructure.
They also show continued pressure in parts of the standalone operation, particularly UK SME and enterprise products where pricing competition has restrained gross profit.
If the Epiris acquisition completes, attention will move towards the pace of investment under private ownership and whether additional capital accelerates Gamma’s expansion in Germany, AI-enabled services, enterprise communications, and other international markets.
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