Gamma reports strong interim growth in Germany amid takeover battle

(Alliance News) - Gamma Communications PLC on Monday said demand in the German market supported growth in the first six months of 2026, despite a "challenging" backdrop in the UK and amid a reported battle for its takeover.

The London-based communications services provider for businesses said pretax profit for the first half of 2026 increased 15% to GBP50.1 million, from GBP43.5 million a year earlier.

Revenue was up 4.2% to GBP330.0 million, from GBP316.6 million.

Gamma said it saw strong growth in the German small and medium enterprises sector, while in the UK it noted "ongoing market headwinds and continuing pricing pressure". Gross profit for the SME branch grew 30% in Germany compared with a year ago to GBP44.8 million, while in the UK it fell 6.7% to GBP69.3 million.

Adjusted earnings before interest, tax, depreciation and amortisation increased 2.3% to GBP72.5 million, from GBP70.9 million a year prior, while adjusted pretax profit fell 3.0% to GBP59.2 million, from GBP61.0 million, driven by higher depreciation and amortisation costs and lower interest income.

Net debt was GBP3.8 million at June 30, compared with GBP21.6 million a year earlier.

Gamma did not declare a dividend for the period citing its looming takeover by Epiris GP III Ltd funds for GBP1.02 billion.

Gamma, which accepted the offer last week, said on Monday that it represents an opportunity for shareholders to "realise their investment in cash at a value which may not otherwise be achievable in the foreseeable future and with certainty, and represents a superior outcome to pursuing Gamma's standalone strategy."

On Sunday, The Times reported that Netherlands-based Waterland Private Equity Investments BV intends to formally launch a rival offer, which would extend a sales process that has been running since April.

The Times said Waterland would sell two Gamma divisions focused on SME to Giacom Ltd, owned by British telecommunications tycoon Matthew Riley, after the takeover is complete.

According to The Times, Gamma perceived Epiris' offer "as being more straightforward and carrying lower execution risk" compared with the Waterland and Giacom proposal.

Gamma shares rose 2.5% to 1,185.06 pence on Monday morning in London.

By Camilla Borri, Alliance News reporter

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