Kick ICT FY25 Results Margin Gains Amid Revenue Dip Backed by Private Equity Growth Plan

Glasgow-headquartered managed service provider Kick ICT closed the year ended 30 September 2025 with a mixed set of numbers: revenue slipped by just over 6% to £27.0 million, EBITDA eased marginally to £4.5 million, yet gross profit ticked up two percent to £16.3 million. The headline reads like a small retreat, but the story beneath the figures is more complex — a period of strategic investment, organisational restructuring and targeted M&A activity supported by private equity that positions the business for a growth push in FY26. Reporting from Channel-focused outlets and company statements corroborate the key figures and leadership changes, while the firm’s own corporate updates and LDC’s investment narrative supply the transactional context behind the numbers.

Background: where these results sit in Kick ICT’s journey​

Kick ICT was founded in 2015 and built a rapid acquisitive growth model to become one of Scotland’s largest independent MSPs. Private equity activity reshaped ownership in late 2023 and early 2024, when LDC (the private equity arm associated with Lloyds Banking Group) put growth capital behind the group — a move management has repeatedly described as funding the next wave of buy-and-build expansion.
The FY25 results cover the 12 months to 30 September 2025. Those figures show a business that, despite a small top-line decline, maintained strong gross profit and adjusted operating profitability. Management describes the-year performance as “strong”, pointing to momentum across managed support and professional services lines, new logo wins, and high client retention. At the same time the company has been actively reorganising its go-to-market and delivery functions: a new demand-generation team, separate new-business and account-management sales tracks, expanded marketing headcount and investment in service delivery were all implemented during the period. Leadership change was another headline: founder and long-term CEO Tom O’Hara’s planned move out of the executive chair was followed by the recruitment of Steven Brown, who formally took the CEO role in February 2026.

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The numbers explained: decline in revenue, rise in gross profit, small EBITDA dip​

What the headline figures show​

• Revenue: fell from £28.7m (FY24) to £27.0m (FY25) — a decline of just over 6%.
• EBITDA: decreased slightly from £4.6m to £4.5m.
• Gross profit: rose from £15.9m to £16.3m, an increase of roughly 2%.

At face value the combination is unusual: revenue declined while gross profit rose. That tells you the margin mix changed — either higher-margin services replaced lower-margin product sales, or operational improvements reduced cost of sales even as top-line volumes softened.

Drivers behind the divergence​

Several factors help explain this divergence:

• Mix shift toward higher-margin recurring services. Management has emphasised momentum in managed support and professional services. Those activities normally carry stronger gross margins than one-off hardware or one-off project revenues, which could lift gross profit even amid lower overall revenue.
• Cost-of-sales efficiencies. Investments in delivery operational capability — improved tooling, standardised service templates, or supplier re-negotiations following earlier acquisitions — can depress cost of sales and lift gross margin.
• Workforce changes and restructuring costs. The company explicitly stated that EBITDA was partly impacted by workforce changes made during the year. Hiring a demand-generation team, hiring a group sales director, doubling marketing resources and re-shaping the sales organisation accelerates operating cost in the near term while aiming to generate higher recurring revenue longer term.
• One-off or timing-driven revenue effects. When a business is both acquisitive and reorganising, timing of deal completions, contract renewals and project milestones can create year-to-year swings in recognized revenue that don’t reflect a durable change in demand.

These dynamics are consistent with a company that is deliberately investing in sales and marketing and accepting near-term margin pressure to secure a stronger recurring-revenue base.

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Strategy under the microscope: product focus, M&A and the private equity backing​

Technology focus: cybersecurity, AI, datacentre, Microsoft Azure​

Kick ICT has publicly signalled where it intends to concentrate its technical and sales efforts: cybersecurity, AI, datacentre solutions, and Microsoft Azure. Those are not accidental choices — each area is a high-demand, high-investment segment where MSPs can leverage partnerships, recurring revenue and higher-value professional services.

• Cybersecurity continues to be a growth vector for MSPs because clients are prioritising protection, monitoring and incident response as part of ongoing managed services.
• AI (broadly defined: assistive automation, LLM-enabled services, observability and analytics) offers new service lines and upsell opportunities, but it requires investment in skills, tooling and vendor relationships.
• Datacentre and Azure work reflect the hybrid-cloud pull in mid-market customers — projects to migrate, secure and optimise cloud estates are multi-year opportunities that tend to increase annual contract values.
• Microsoft ecosystem focus (Azure, Business Central, Dynamics) aligns with Kick’s history of business-application work and the December 2023–2024 private equity era, where inorganic growth in Dynamics capability was a stated objective.

This technology mix positions Kick to sell higher-value, recurring-managed services while also packaging transformation projects that raise average contract value — a classic MSP growth playbook.

M&A: more buyouts planned for FY26​

Management reaffirmed plans to pursue further buyouts across all divisions in FY26, leveraging LDC’s investment made in 2024. The company already hinted at a post-year-end acquisition of a Microsoft Business Central customer base — a tactical purchase that strengthens Dynamics and ERP-related services. With private equity backing, Kick has “M&A firepower” but must avoid common pitfalls of acquisitive scale-up: integration complexity, cultural mismatch, customer attrition and the risk of overpaying when market multiples compress.

Organizational changes and go-to-market sharpening​

The FY25 period saw a mix of hires and internal structural changes:

• Appointment of a dedicated group sales director.
• Creation of a demand generation team and a restructured sales organisation separating new-business and account management roles.
• Marketer headcount doubled and service-delivery investment increased.

These moves are expensive in the short term but intended to create repeatable new-business pipelines and deeper penetration within existing clients. The critical near-term test: whether those investments translate to improved win rates, larger average contract values, and measurable improvement in recurring revenue growth in FY26.

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Strengths: what Kick ICT has going for it​

• High client retention and recurring revenue focus. Management reports high client retention and new logos across core offerings — a powerful combination for predictable cash flow and valuation upside.
• Strategic private equity backing. LDC’s 2024 investment provides both capital and M&A capability; that enables acquisitions to expand capability quickly across geography or technology stacks.
• Focused expansion into high-growth tech areas. Investment in cybersecurity, Azure and Business Central gives the company both defensive and offensive sales arguments: protect the estate, modernise it in the cloud, and run business-critical apps under management.
• Professionalisation of sales and marketing. The separation of new-business hunting roles from account management and the creation of a demand-generation function are best-practice moves for scaling mid-market MSP sales engines.
• Track record of acquisitive growth. Previous roll-ups and platform-style acquisitions provide experience in deal origination and integration that newer roll-up players often lack.

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Risks and areas of concern: what to watch closely​

• Integration and execution risk from M&A
• Every acquisition brings cultural, contractual and systems alignment work. If processes and people aren’t integrated quickly, churn — of both customers and key staff — can erode the value of the deal.
• Short-term profitability pressure from investments
• Doubling marketing headcount, hiring new leadership, and building demand-generation are all front-loaded costs. With EBITDA down slightly, the company must show the investments convert into measurable revenue gains in FY26 to justify valuation multiples.
• Dependence on a concentrated set of platform partners
• A focused bet on Microsoft (Azure, Dynamics, Business Central) creates strategic alignment but also vendor concentration risk. Licensing model changes, shifting partner incentives or tougher competition in partner-led ecosystems can compress margins.
• Private equity growth expectations
• LDC will expect an acceleration in scale and returns. That push can lead to aggressive acquisition targets or price-sensitive deals. Too-rapid M&A can overstretch management bandwidth.
• Talent and retention pressures in cybersecurity/AI
• These markets are talent-constrained. Scaling technical teams quickly risks degraded delivery quality unless hiring is selective and complemented by managed services automation.
• Market competition and consolidation
• The MSP market in the UK has been consolidating. Larger, better-funded competitors can outbid on large deals or use scale to compress vendor pricing, making mid-market competition tougher.

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How credible are the figures and claims?​

The FY25 top-line and profitability figures were reported by Channel-focused trade press following company statements; the company’s own news pages and LDC’s portfolio materials corroborate the broader strategic points: LDC invested to underwrite M&A, and senior leadership changes (founder stepping back and a new CEO joining) were publicly announced. That said, there are caveats:

• Kick ICT’s Companies House filings at the time of the FY25 coverage were last made up to 30 September 2024, so formal statutory accounts for the 2025 year may not have been available immediately in public filings when trade press reported the FY25 trading update. This timing difference is important: press numbers are typically accurate to company trading statements, but analysts and buyers will look for statutory accounts to validate headline numbers and detailed profit-and-loss and balance-sheet movements.
• Where precise line-item reconciliations are material (for example, the drivers of the gross-profit improvement or one-off workforce-related charges), those are best confirmed by audited accounts or the company’s full-year management commentary. Until those are published, treat some of the detailed breakdowns as management-provided and therefore not yet vetted by independent auditors.

In short: the high-level figures and strategic facts are credible and consistent across company statements and trade reporting, but detailed forensic validation should await the audited FY25 accounts and any accompanying management commentary.

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What FY26 will reveal (and what investors, customers and partners should watch)​

Kick ICT has set out an explicit playbook for FY26: pursue further buyouts across divisions, expand into new markets, and broaden product and service portfolios. LDC’s capital backing remains central to that plan. To judge whether the company’s strategy is working, monitor these indicators:

• Recurring revenue growth rate (quarter-on-quarter and year-on-year)
• Customer retention and net revenue retention (NRR) — are existing accounts growing?
• Contribution margin by service line (managed support vs professional services vs product)
• EBITDA margin trajectory after restructuring costs — are investments paying off?
• Pace and quality of acquisitions — number, size, valuation multiples, and post-acquisition retention of customers and staff
• Sales pipeline conversion rates and blended contract values for new logos
• Delivery KPIs — SLA attainment, incident response times, and Net Promoter Score (NPS) or customer satisfaction metrics
• Leverage and debt servicing metrics if any acquisition-related debt is being used

These metrics tell whether the business is improving scale economics and converting investment into durable growth rather than simply jacking up costs.

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Strategic scenarios: upside and downside​

Upside scenario​

If Kick ICT’s investments — both organic (sales, marketing, delivery uplift) and inorganic (Dynamics/Business Central customer-base buyouts) — convert into larger recurring contract volumes and higher average deal sizes, the group can re-accelerate top-line growth while maintaining improved gross margins. Private equity support would then enable value-accretive tuck-ins that expand both geographic reach and technical capability, improving valuation multiples at exit.
Key enablers: disciplined deal selection, strong post-acquisition integration, retention of key technical talent, and demonstrable sales pipeline conversion.

Downside scenario​

If acquisitions prove costly to integrate, or if the investments in sales and marketing fail to yield proportionate new business, Kick risks margin compression and lower-than-expected growth. Vendor concentration in the Microsoft stack could expose the group to partner-program dislocation or competitive pressure. Private equity timelines can also compress management incentives to deliver near-term scale at the cost of margin control.
Key threats: integration failure, talent loss, pricing pressure, and execution slippage on sales enablement.

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Practical takeaways for each stakeholder group​

• For customers: The increased investment in cybersecurity, Azure and Dynamics should broaden the scope of services available and could deliver deeper managed-service outcomes. However, large-scale organisational change sometimes creates short-term operational friction; customers should insist on clear SLAs during integration periods and watch for changes in account-management continuity after acquisitions.
• For investors and potential sellers: Kick’s LDC backing and articulated buy-and-build approach creates a plausible path to scale. Sellers contemplating a tie-up should evaluate Kick’s integration track record and the cultural fit, particularly in Dynamics/Business Central pockets.
• For employees and recruits: Investment in sales, marketing and demand generation signals growth ambitions — a positive for career opportunities. But rapid acquisition and restructure cycles can create uncertainty; clarity around role expectations and retention incentives will matter.
• For partners (vendors and channel allies): Kick’s deeper focus in Azure, Business Central and cybersecurity indicates a reliable route to market for vendor solutions, though partner engagement models may evolve as Kick centralises procurement for post-acquisition portfolios.

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Final assessment: cautious optimism with disciplined execution required​

Kick ICT’s FY25 is emblematic of many mid-market, PE-backed MSPs in a consolidation phase: near-term revenue softness, controlled profit pressure from investment, and a deliberate pivot toward higher-margin, higher-growth service lines. The rise in gross profit amid a slight revenue dip suggests a beneficial shift in revenue mix, while the modest EBITDA impact is a direct cost of transformation.
The company’s public messaging — expanded sales capability, demand generation, targeted technology pillars and continued M&A — is coherent and strategically sensible. LDC’s involvement provides capital and deal-making muscle that can accelerate scale if applied judiciously.
But the win for Kick ICT will be measured in FY26 by two things: first, whether the increased investment in go-to-market and delivery converts into sustained recurring revenue growth; and second, whether acquisitions and integrations are executed cleanly enough to enhance margins rather than erode them. If both happen, the FY25 result will look like a sensible pause — a deliberate recalibration on the road to a larger, more valuable platform. If they don’t, the modest decline recorded in FY25 could be the first sign of a harder challenge to come.
Either way, the story is no longer just about last year’s numbers; it’s about whether Kick ICT can turn investment and private equity backing into repeatable, profitable scale. The next four quarters will provide the clearest evidence.

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Source: CRN UK Kick ICT delivers mixed results in FY25