Extraordinary information - Significant growth expected in Gloster's first half-year report

Extraordinary information
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Gloster Infokommunikációs Nyilvánosan Működő Részvénytársaság (company registration number: 13-10-042012; registered office: 2142 Nagytarcsa, Csonka János utca 1/A. A/2. ép.; hereinafter: Company, Gloster) in accordance with the relevant legislation, in particular Act CXX of 2001 on the Capital Market.

Act (the "Act") and the General Business Rules of the Budapest Stock Exchange, hereby informs investors of the following.

Significant growth expected in Gloster's first half-year report

Management expects significant growth in the second half of the year as well

Compared to the same period last year, Gloster's management expects sales revenue of around HUF 5.8-6.6 billion, up 35-45%, and half-year EBITDA of between HUF 490 and 610 million in the Company's first half-year report for 2024, to be published in September.

The strong performance was supported by the consistent, stable performance of the Cloud business unit and the successful conversion of completed projects in the Software Development business unit into new, long-term contracts, accompanied by a continuously strengthening international sales presence.

The Company's performance is expected to improve further as it successfully completed the final phase of several previous acquisitions in the first half of 2024 and the first step of the merger with Sytemfarmer Zrt.[1] has also been completed, shifting the focus to integration and the realization of joint business opportunities.

Although the half-year performance of the System Integration business line is expected to fall short of the planned level, the business line is approaching a milestone, with management expecting several significant projects to commence in the second half of 2024.

An encouraging sign for the year-end results is that Gloster started 2024 with a record order backlog of HUF 4,134 million, up 170%[2], and began the second quarter of 2024 with an order backlog of HUF 3,470 million, up 137%[3], the fulfillment of which is expected to accelerate in the second half of the year. A further slight improvement is also expected from the first results of the Gloster Level Up program[4] in the second half of 2024.

Consolidated, unaudited half-yearly data in millions of Hungarian forints. The results are currently being converted to IFRS, which will have no significant impact on the financial results.

Management sees encouraging growth prospects for the second half of the year as well , driven mainly by two previously announced software development orders worth a total of EUR 15.7 million.

In the Cloud business segment, in addition to traditional migration projects, growth is expected in both security and BizApps services in the second half of 2024 . On the security side, these projects will mainly involve the introduction of Intune and Autopilot, while on the BizApps side, they will involve the delivery of customized Power Platform-based solutions.

In the international software development business, management expects new orders from all existing customers to continue steadily in 2024 . The direct sales presence in Germany and Sweden is steadily growing, and the sales team in England has also expanded, so Gloster expects new customers and significant new orders from its strengthened teams by 2025.

Improving half-year financial data and projects planned for the end of the year provide a stable financial basis for a successful closing in 2024 and are also expected to cover the first dividend payment planned for 2026, factors that could lay the foundation for a renewed upward trend in the share price.

Gloster shares are tracked by ERSTE Ltd. with a target price of HUF 1,183 and a buy recommendation.

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About Gloster

Gloster is a broad-spectrum international IT service provider listed in the standard category of the Budapest Stock Exchange. Over its more than 20-year history, it has evolved from a hardware garage company into a software-focused international medium-sized enterprise. Thanks to its intensive growth strategy, Gloster has completed eleven transactions since 2018 and expanded its activities into the areas of system integration, cloud solutions, and international software development services. The group currently employs a team of nearly 350 people. According to its audited consolidated financial statements for 2023, its revenue was HUF 10.3 billion, its adjusted EBITDA was HUF 976 million, and its after-tax profit was HUF 414 million.

This information sheet Gloster Infocommunications Plc. (registered office: 2142 Nagytarcsa, Csonka János u. 1/a). This prospectus contains only factual information and reasonable conclusions based on reasonable calculations, which have been disclosed by the persons entitled to do so in accordance with the relevant legal obligations. This information does not constitute an "investment recommendation" within the meaning of Section 5(1)(9) of the Tpt. (Act CXX of 2001 on the Capital Market) and is not subject to the Bszt. (Act CXXXVIII of 2007 on Investment Firms and Commodity Exchange Service Providers and the Rules Governing their Activities) and does not contain any investment analysis, financial instrument, exchange-traded products or their issuers, the disclosure of which, in itself or in any other way, could influence investors to make their own or other people's money or other assets, in whole or in part, dependent on the effects of the capital market. Gloster Infocommunications Plc. and its representatives accept no responsibility for investment decisions based on conclusions drawn from the information contained in this prospectus, or for any adverse legal consequences or financial losses resulting therefrom.

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Nagytarcsa, September 3, 2024.  

Gloster Infocommunications Plc.

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Further information:

Dr Eszter Bassola

Investor Relations Officer

bassola.eszter@gloster.hu

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[1] Hungary's largest domestically owned Microsoft cloud service partner company is established https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Letrejon-Hungary's-largest-domestically-owned-Microsoft-cloud-service-partner-company-65cef84f1e67d.pdf

[2] GLOSTER'S OPEN ORDER BOOK AT RECORD LEVELS https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Gloster-2023Q4-Order-Backlog-65cb92d210841.pdf

[3] Gloster's open order book reaches new high https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Gloster-Order-Backlog-2024Q1-661907579c549.pdf

[4]A $200 million corporate development program is launching at Gloster https://gloster.hu/uploads/befektetoknek/kozzetetel/rendkivuli_tajekoztatasok/28982-Rendkivuli-tajekoztatas_-Evi-200-millios-vallalatfejlesztesi-program-indul-a-Glosterben.pdf

[5] Gloster wins €15 million industrial software development contract from BMW https://gloster.hu/uploads/befektetoknek/kozzetetelek/rendkivuli-tajekoztatasok/Extraordinary announcement – Gloster wins €15 million contract from BMW 6672898577f31.pdf