Redcentric (RCN) AI Stock Analysis

• Market Cap: £191.12M
• Dividend Yield: 3%
• Average Volume (3M): 73.38K
• Price to Earnings (P/E): 54.5
• Beta (1Y): -0.11
• Revenue Growth: -31.46%
• EPS Growth: 297.44%
• Country: UK
• Employees: 659
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.03
• Shares Outstanding: 159,268,480
• 10 Day Avg. Volume: 80,864
• 30 Day Avg. Volume: 73,384
• PEG Ratio: -0.29
• Price to Book (P/B): 3.80
• Price to Sales (P/S): 1.50
• P/FCF Ratio: 10.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: 122.00p ▲(1.67% Upside)

Redcentric's overall stock score reflects a company undergoing strategic transition. The most significant factor is the financial performance, which shows mixed results with challenges in revenue and profitability. Technical analysis indicates bearish momentum, while valuation suggests potential overvaluation. However, positive corporate events provide a strategic focus that could improve future performance.

Positive Factors

Cash Flow Growth

The growth in free cash flow indicates strong cash generation capabilities, providing Redcentric with the financial flexibility to invest in growth opportunities and manage debt effectively, supporting long-term stability.

Leverage Management

Improved leverage management reflects Redcentric's ability to handle its debt more effectively, reducing financial risk and enhancing its capacity to invest in strategic initiatives.

Stable Gross Profit Margin

A stable gross profit margin suggests that Redcentric can maintain its pricing power and cost control, which are crucial for sustaining profitability and competitive positioning in the market.

Negative Factors

Declining Revenue Growth

The significant decline in revenue growth poses a challenge to Redcentric's market expansion efforts and could impact its ability to scale operations and improve profitability.

Low Profitability Margins

Persistently low profitability margins limit Redcentric's ability to reinvest in business growth and innovation, potentially affecting its competitive edge in the long term.

High Debt Levels

High debt levels can strain Redcentric's financial resources, limiting its ability to respond to market changes and invest in growth opportunities, posing a risk to its financial health.

Redcentric Business Overview & Revenue Model

Company Description

Redcentric (RCN) is a leading managed services provider in the United Kingdom, specializing in delivering IT infrastructure, cloud solutions, and business communication services. The company operates primarily in the technology sector, offering a range of services including data hosting, connectivity, cybersecurity, and IT support. Redcentric serves various industries, including healthcare, education, and public services, focusing on enabling organizations to improve operational efficiency and enhance customer experiences through innovative technology solutions.

How the Company Makes Money

Redcentric generates revenue through a combination of subscription-based services, managed IT solutions, and consultancy fees. Key revenue streams include monthly recurring revenue from cloud services, data center hosting, and managed network services. The company also earns income from project-based work, where it provides tailored solutions for clients' specific IT needs. Significant partnerships with technology providers enhance Redcentric's offerings, allowing it to leverage leading platforms and technologies, which further contributes to its earnings. Additionally, the growing demand for digital transformation and increased cybersecurity needs among businesses has created a favorable market environment that supports Redcentric's revenue growth.

Redcentric Financial Statement Overview

Summary

Redcentric's financial statements indicate a company in transition. Positive cash flow trends and some balance sheet improvements are overshadowed by challenges in revenue growth and low profitability margins. The company needs to focus on enhancing revenue growth and profitability while maintaining its cash flow improvements.

Income Statement

Redcentric's income statement shows a mixed performance. The gross profit margin has been relatively stable, but there's a notable decline in revenue growth, with a significant drop of 19.53% in the most recent year. The net profit margin has improved from a negative position, but remains low at 2.58%. EBIT and EBITDA margins have shown some recovery, yet they are still not at optimal levels. Overall, the company faces challenges in maintaining revenue growth and profitability.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has improved from previous years, indicating better leverage management, but it remains relatively high at 0.85. Return on equity has turned positive, showing some profitability, yet it is still modest at 6.53%. The equity ratio is stable, suggesting a balanced asset structure. The company needs to continue improving its leverage and profitability metrics.

Cash Flow

Cash flow analysis reveals a positive trend with a 14.4% growth in free cash flow. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to profits. The free cash flow to net income ratio is also strong at 67.53%, suggesting efficient cash management. However, the company should focus on sustaining this growth to support its financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	135.14M	135.14M	163.15M	141.67M	93.33M	91.40M
Gross Profit	83.28M	83.28M	118.03M	92.14M	52.58M	51.02M
EBITDA	14.59M	29.36M	15.77M	14.89M	20.90M	28.04M
Net Income	3.49M	3.49M	-3.44M	-9.25M	6.94M	9.01M
Balance Sheet
Total Assets	179.52M	173.45M	184.51M	195.42M	122.57M	122.64M
Cash, Cash Equivalents and Short-Term Investments	3.02M	3.02M	3.13M	1.37M	1.80M	5.25M
Total Debt	46.99M	45.46M	75.50M	74.33M	18.45M	20.82M
Total Liabilities	126.07M	119.99M	130.02M	137.23M	50.72M	50.55M
Stockholders Equity	53.45M	53.45M	54.48M	58.19M	71.85M	72.09M
Cash Flow
Free Cash Flow	18.40M	20.10M	12.24M	6.01M	13.71M	13.07M
Operating Cash Flow	28.07M	29.77M	22.98M	12.38M	16.48M	15.38M
Investing Cash Flow	-11.36M	-11.36M	-11.63M	-32.98M	-7.44M	-2.31M
Financing Cash Flow	-14.90M	-18.50M	-9.48M	18.49M	-12.51M	-11.51M

Redcentric Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 120.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RCN, the sentiment is Negative. The current price of 120 is below the 20-day moving average (MA) of 122.36, below the 50-day MA of 125.77, and below the 200-day MA of 126.19, indicating a bearish trend. The MACD of -0.58 indicates Negative momentum. The RSI at 43.58 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:RCN.

Redcentric Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FDM	74 Outperform	£135.14M	8.72	24.53%	14.06%	-27.01%	-49.07%
TRD	72 Outperform	£47.91M	25.16	44.27%	2.69%	30.01%	138.65%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RCN	54 Neutral	£191.12M	54.55	1.35%	3.00%	-31.46%	297.44%
TPX	53 Neutral	£12.62M	-1.38	-17.47%	―	-5.84%	55.30%
TIA	42 Neutral	£26.94M	―	-67.57%	―	-12.11%	-106.04%

Redcentric Corporate Events

Redcentric Announces Investor Presentation on Growth Strategy

Redcentric plc announced an upcoming presentation on 17 December 2025 via the Investor Meet Company platform, where management will discuss the company’s half-year unaudited results and growth strategy. This event offers existing and prospective investors a chance to engage with the company’s leadership and gain insights into its strategic direction.

Redcentric Announces Employee Share Option Exercise

Redcentric plc has announced the exercise of employee share options, resulting in the transfer of 1,873 ordinary shares from Treasury to satisfy the exercise. This adjustment in share capital will affect the company’s issued voting share capital, which now consists of 159,270,352 ordinary shares, impacting how shareholders report their interests under FCA rules.

Redcentric Reports Solid H1 Performance and Progress on Data Centre Disposal

Redcentric plc reported a solid performance for the first half of the fiscal year 2026, with revenues of approximately £67 million and an adjusted EBITDA of £9.1 million, both in line with or slightly above management expectations. The company is progressing with the disposal of its Data Centre business, expected to complete in the first quarter of 2026, which aligns with its strategy to focus on higher-margin managed services. The financial results exclude the Data Centre business, which is treated as a discontinued operation.

Redcentric Announces Share Option Exercise and New Share Issuance

Redcentric plc has announced the exercise of employee share options, resulting in the issuance of 22,483 new ordinary shares under the company’s SAYE Option Plan 2014. These shares are set to be admitted to trading on AIM, increasing the company’s issued share capital to 159,270,848 ordinary shares, with implications for shareholder reporting under FCA guidelines.

Redcentric Sells Data Centre Business to Focus on Core MSP Operations

Redcentric plc has announced the conditional sale of its data centre business, Redcentric Data Centres Limited, to Stellanor Datacenters Group Limited for up to £127 million. The sale is expected to enhance Redcentric’s financial stability by reducing debt and returning capital to shareholders, while allowing the company to focus on its core managed services provider operations, which have a strong market position in both public and private sectors.

Redcentric AGM Resolutions Passed with Strong Shareholder Support

Redcentric plc announced that all resolutions proposed at its Annual General Meeting on 20 October 2025 were successfully passed. Key resolutions included the approval of the company’s financial accounts, directors’ remuneration policy, and the election and re-election of several directors. The approval of these resolutions indicates strong shareholder support and is expected to positively impact the company’s governance and strategic direction.

Redcentric Announces New Share Issuance Following Employee Option Exercise

Redcentric plc has announced the exercise of employee share options, resulting in the issuance of 18,736 new ordinary shares. This move will slightly increase the company’s issued share capital and is expected to impact trading on AIM, with the new shares commencing dealings on or around 23 October 2025.

Redcentric Announces Exercise of Employee Share Options

Redcentric plc announced the exercise of employee share options, resulting in the issuance of 134,890 ordinary shares. This includes the transfer of 99,922 shares from Treasury and the issuance of 34,968 new shares, which will be admitted to trading on AIM. Following this, the company’s issued share capital will consist of 159,180,881 ordinary shares, with 159,178,512 being the issued voting share capital.

Redcentric Publishes Annual Report and Announces AGM

Redcentric plc has announced the publication of its Annual Report and Accounts for the year ended 31 March 2025, which is now available on its website. The company has also issued a notice for its Annual General Meeting, scheduled for 20 October 2025. This announcement underscores Redcentric’s commitment to transparency and stakeholder engagement, reinforcing its position as a key player in the IT managed services industry.

Redcentric Reports Strong FY25 Results Amid Strategic Business Restructuring

Redcentric plc announced its final audited results for the year ended 31 March 2025, highlighting a strategic move to separate its business into two autonomous units: the Data Centre (DC) business and the Managed Service Provider (MSP) business. The company is in advanced negotiations for the potential sale of the DC unit, which is now recognized as a discontinued operation, while focusing on growing the MSP unit to enhance shareholder value. Financially, Redcentric reported an 8.3% increase in total revenue to £135.1m, with significant improvements in operating profit and profit before tax. The company also welcomed new senior management, including a new CEO and CFO, to drive future growth and strategy.