Redcentric cutting costs to boost profit

By the Editorial Team · Saturday, October 3, 2026

Redcentric sold its data centre business and used the proceeds to buy back 35 percent of its shares, returning £90 million to shareholders as part of a financial restructuring focused on profitability. The company now concentrates on managed IT services with expectations of flat revenue but slight EBITDA growth through 2027, reflecting a strategic shift toward cost efficiency over expansion.

Redcentric has undertaken a significant financial restructuring aimed at improving profitability and streamlining its operations. In July, the company returned £90 million to shareholders through a buyback of 35 percent of its issued shares at 160p per share. This move followed the sale of its data centre business, which generated the cash used for the buyback and debt reduction.

The disposal of the data centre assets marks a strategic shift for Redcentric. Previously, the company’s operations included both data centre ownership and managed services. Following the sale, it now primarily focuses on providing managed IT services, presenting a more streamlined business model.

Management has characterized the current period as a turning point for the company. While Redcentric forecasts flat revenue growth through the full fiscal year 2027, it expects adjusted cash profit, or EBITDA, to increase slightly over that time frame. This aligns with the company’s broader cost-cutting efforts aimed at boosting profitability rather than expanding top-line revenue.

Despite these measures, the company’s valuation remains relatively subdued. According to analyst consensus data from FactSet, Redcentric currently trades at a forward price-to-earnings ratio of approximately 13 times. This suggests that investors may remain cautious about the company’s near-term growth prospects, reflecting the outlook of modest profit gains amid stagnant revenue.

Overall, Redcentric’s recent activity reflects a shift toward a leaner operational structure and a focus on enhancing profitability through cost management, even amid modest revenue expectations.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.