Redcentric (RCN) AI Stock Analysis

• Market Cap: £196.70M
• Dividend Yield: 3%
• Average Volume (3M): 73.38K
• Price to Earnings (P/E): 56.8
• Beta (1Y): -0.11
• Revenue Growth: -17.17%
• EPS Growth: N/A
• Country: UK
• Employees: 659
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): >-0.01
• 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

• Rating: 47 Neutral
• Price Target: 125.00p ▲(4.17% Upside)

Redcentric faces significant challenges with high valuation and weak technical indicators. While there are positive signs in cash flow and some balance sheet improvements, the overall financial performance is hindered by declining revenue and low profitability. The lack of earnings call data and corporate events further limits positive outlooks.

Redcentric Business Overview & Revenue Model

Company Description

Redcentric plc provides IT managed services for public and private sector in the United Kingdom. It offers network services, including connectivity, software-defined wide area network (WAN), local area network, managed WAN, secure remote access, and managed wireless network services; and cloud services consisting of cloud consultancy and migration, infrastructure as a service, hybrid cloud, colocation, data backup, managed Microsoft 365, disaster recovery, platform as a service, and virtual desktop services. The company also provides communication services, such as IP telephony, unified communications, collaboration, SIP trunks, call management and reporting, and call recording services; and IT security services, including network security, application security, access management, security information and event management, endpoint management, distributed denial of service mitigation, vulnerability scanning and management, and security monitoring and analytics services. In addition, it offers professional services, such as IT consulting, application modernization, implementation, supply chain management, and support and maintenance services. The company was founded in 1997 and is headquartered in Harrogate, the United Kingdom.

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 exhibits robust revenue growth but struggles with profitability, as indicated by negative net margins and ROE. The balance sheet reveals high leverage, which could pose risks if earnings do not improve. Cash flow metrics are positive, showcasing strong cash generation and growth. The company needs to address profitability and leverage to enhance financial stability.

Income Statement

The company shows a substantial revenue growth of 15.16% for the latest year, indicating a positive growth trajectory. However, the net profit margin is negative at -2.11%, suggesting challenges in achieving profitability. The gross profit margin remains strong at 68.65%, highlighting effective cost management. The EBIT margin at 0.52% and EBITDA margin at 15.03% demonstrate moderate operational efficiency with room for improvement.

Balance Sheet

The debt-to-equity ratio is 1.39, pointing towards a high leverage position which could pose financial risk. The return on equity is negative at -6.32%, reflecting recent profitability issues. The equity ratio stands at 29.53%, indicating a relatively low level of equity financing. The balance sheet shows a mixed picture with high leverage and negative ROE as potential concerns.

Cash Flow

The operating cash flow to net income ratio is quite strong at -5.64, implying efficient cash generation relative to accounting profits. Free cash flow growth is notable at 44.33%, marking significant improvement in cash availability. The free cash flow to net income ratio is -2.52, which emphasizes concerns about translating net income into free cash flow.

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	14.80M	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	45.46M	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: Positive
• RSI: Neutral
• STOCH: Positive

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 131.45, below the 50-day MA of 133.97, and below the 200-day MA of 126.03, indicating a bearish trend. The MACD of -3.31 indicates Positive momentum. The RSI at 33.00 is Neutral, neither overbought nor oversold. The STOCH value of 2.90 is Positive, 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	―	£133.38M	8.68	24.53%	15.39%	-27.01%	-49.07%
TRD	―	£51.39M	29.71	41.96%	2.03%	52.51%	―
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
TIA	―	£30.93M	―	-67.57%	―	-12.11%	-106.04%
RCN	―	£196.70M	56.82	4.99%	3.00%	-17.17%	―
TPX	―	£14.18M	-1.50	-21.01%	―	-8.22%	61.58%

Redcentric Corporate Events

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.

The most recent analyst rating on (GB:RCN) stock is a Hold with a £134.00 price target. To see the full list of analyst forecasts on Redcentric stock, see the GB:RCN Stock Forecast page.

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.

The most recent analyst rating on (GB:RCN) stock is a Hold with a £134.00 price target. To see the full list of analyst forecasts on Redcentric stock, see the GB:RCN Stock Forecast page.

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.

The most recent analyst rating on (GB:RCN) stock is a Hold with a £134.00 price target. To see the full list of analyst forecasts on Redcentric stock, see the GB:RCN Stock Forecast page.

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.

The most recent analyst rating on (GB:RCN) stock is a Hold with a £134.00 price target. To see the full list of analyst forecasts on Redcentric stock, see the GB:RCN Stock Forecast page.

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.

Redcentric to Announce Final Results for FY 2025

Redcentric plc has announced that it will release its audited final results for the year ended 31 March 2025 on 24 September 2025. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and stakeholder decisions.

Redcentric plc in Talks to Sell Data Centre Business Unit

Redcentric plc has confirmed that it is in advanced discussions regarding the potential sale of its business unit, Redcentric Data Centres Limited. While no transaction is guaranteed, the move could significantly impact the company’s operations and market positioning, particularly within the data centre sector, affecting its stakeholders and strategic direction.

Redcentric Appoints New CFO to Drive Growth

Redcentric plc has appointed Tony Ratcliffe as its new Chief Financial Officer and Executive Director. With over 25 years of experience in senior financial management in fast-growing technology and service companies, Tony is expected to bring valuable expertise to Redcentric, aiding in business growth and shareholder value enhancement.