Summary

  • Redcentric has fixed the final cash consideration for its data-centre sale at £124.90 million and received the last £9.46 million.
  • That receipt is a completed disposal cash flow, not recurring MSP revenue; the audited FY26 results on 28 September will be the next evidence on the business that remains.

Redcentric no longer has to estimate what its data-centre disposal will produce. On 18 September, the company confirmed final cash consideration of £124.90 million. A £9.46 million balancing payment followed the £115.4 million received on 30 April.

The certainty is important, but it applies to a finite transaction. It does not show what the remaining managed-services provider earns from serving customers, how much cash those contracts generate or how long they renew. Treating the settlement as evidence of recurring earnings would combine two different economic events.

Three cash facts, three different meanings

The first fact is the sale itself. When Redcentric announced the disposal, it described an estimated value range of £115 million to £127 million. The sold data-centre business had generated FY25 revenue of £44.6 million and adjusted EBITDA of £16.6 million, while property lease costs were £8.2 million. Redcentric therefore highlighted £8.4 million of lease-adjusted adjusted EBITDA and an implied multiple of about 15.1 times at the upper value. Those operating figures belonged to the business being sold.

The second fact is capital already returned. Redcentric's tender offer bought and cancelled 56.25 million shares for £90 million. Cancellation changes the number of shares over which future earnings are spread, but it does not improve the operating result by itself. A later programme authorised up to £1.5 million of additional share purchases.

The third is an option, not a payment. The August announcement said Redcentric expected to update shareholders on reintroducing a progressive dividend policy and on possible further buybacks after the settlement. It did not declare a dividend. Until the board specifies an amount, record date and payment date, the distinction matters.

The remaining business has its own evidence base

Redcentric gave an unaudited view of the continuing MSP in June. FY26 revenue was about £132.1 million, against £135.1 million in FY25; about 88% was described as recurring. Gross margin was about 61.0%, compared with 61.6%, while adjusted EBITDA of about £17.5 million was slightly above the £17.2 million expectation cited by the company. The trading update explicitly excluded the data-centre operation.

These figures are more relevant to the future earnings base than the disposal receipt, but they are not the last word. A high recurring share says revenue is contractually repeated; it does not disclose retention, price changes, service credits, support intensity or cash collection. A stable gross margin can coexist with higher central costs or investment. Adjusted EBITDA also requires a bridge to statutory profit and operating cash.

The same date discipline applies to balance-sheet numbers. Redcentric reported £77.9 million of net cash on 29 May, excluding borrowings and IFRS 16 lease liabilities, after receiving the initial sale payment. That snapshot preceded the £90 million tender, subsequent buyback activity and the final balancing receipt. It should not be presented as today's cash balance.

Redcentric will publish audited FY26 results on 28 September. The settlement has removed one uncertainty from that presentation. It has not answered the operating questions for management.