Buoyed by remote working trends, Gamma issues battle cry for remainder of 2020

COVID-19 has dealt numerous companies a very unusual set of cards, but for Unified Comms firm Gamma Communications, there is plenty to be optimistic about.

As with every economic downturn, there are those which benefit. The coronavirus pandemic has forced through a new normality on society, but Gamma Communications is one of those companies set to profit very handsomely from enforced digital transformation programmes.

“Gamma saw strong growth in the first quarter of the year, with that positive momentum continuing into the second quarter,” the company said in an Annual General Meeting (AGM) trading update.

“Although we have seen some impact on the rate of growth as a result of COVID-19 we remain positive about the prospects for the group both in 2020 and in the longer term.”

As a company listed solely on the UK stock exchange, the team only has to release detailed financial statements to the market twice a year. We won’t get the full picture until September, when the company releases half year results, but the trading update from the AGM offers some colour at least.

Gamma is a company which offers a breadth of services, but the bread and butter here is unified communications, a segment of the telco world which enables remote working and employee mobility. During a time which is dominated by home meetings and video conferencing, prospects look very promising.

As it stands, Gamma has a very sturdy business model with 93% of its revenue is recurring and billed each month, while the team has said SIP Trunks and cloud telephony markets are remaining buoyant. New customers have increased through the latter stages of Q1 and continue to do so through Q2 with new customer sales cycles increasing.

One element of risk for this business is the upcoming recession and its depth. The core market for Gamma is SMEs, a segment which will be placed under financial strain during an extended period of tough trading conditions. In a recession some SMEs will go bankrupt, or be acquired, this would be a detrimental outcome for Gamma, but it does appear the positive trends in unified comms are vastly outweighing the risks.

Another mark in the positive column for Gamma is the acquisition of Exactive Holdings. As a specialist in Microsoft Teams, the business now has in-house expertise to add customers on their digital transformation projects, as well as being able to launch new products, such as a Microsoft Teams Direct Routing service.

Considering the popularity of Microsoft Teams in this unusual period, and the likelihood Microsoft will continue to excel as customers look for cloud suppliers with breadth and depth of services, this is a very attractive acquisition.

Although we will have to wait until September to get the hard and fast facts on Gamma’s performance, this is a business which is very well positioned to capitalise to remote working and mobility trends in the enterprise space.