Redcentric Plc is a Harrogate-based company that makes money by providing managed IT services to businesses, helping them keep their technology running smoothly. It operates in the information technology services industry, focusing on cloud, network, communications, and cybersecurity solutions for both public and private sector clients, including industries like healthcare, finance, and retail.
The company’s main revenue comes from long-term contracts where it manages clients’ IT needs. Redcentric offers cloud services – such as hosting data on Microsoft Azure or Amazon Web Services (AWS) – and helps businesses migrate to or manage hybrid cloud setups. It also provides network services, like secure connectivity and software-defined wide area networks (SD-WAN), ensuring companies can link their offices or remote workers reliably. On the communications side, Redcentric delivers hosted telephony, unified communications, and call management systems, which help firms improve customer service – for example, supporting a veterinary chain with streamlined call handling. Cybersecurity is another key focus – it offers penetration testing, security monitoring, and protection against threats like ransomware, a growing concern for UK firms, as highlighted in Redcentric’s recent parliamentary insights blog.
Redcentric charges clients through a mix of recurring fees, service contracts, and product sales. Recurring revenue, from ongoing cloud or network management, forms the bulk of its income – in 2024, it reported £213 million in trailing 12-month revenue. The company’s data centres, powered by 100% renewable energy, support high-performance needs like AI workloads, a point it has promoted through industry events. It also partners with tech giants like Fortinet, earning the Fortinet Managed Services Partner of the Year 2024 award, which strengthens its reputation in the market.
Founded in 1997, Redcentric employs around 450 people across the UK, with offices in Harrogate, London, and Reading. It serves clients like the NHS through its HSCN connectivity and has a strong public sector presence. However, it faces competition from firms like Rackspace and Claranet, and the fast-evolving IT landscape – with rising cyber threats and cloud complexity – demands constant innovation to stay ahead.
While IT services may initially seem compelling, they are fundamentally service providers with economics akin to other such businesses. In theory, their capital-light model allows for rapid growth, with personnel management being the primary challenge. However, investors must exercise heightened scrutiny over the financials, as long-term contracts can mask risks: early profitability may give way to losses in later years if poorly structured.
Redcentric’s most notable feature is its largest shareholder, Kestrel Partners, which holds board positions across multiple IT firms, potentially ensuring competent oversight. Still, this advantage does little to elevate Redcentric beyond a steady, unremarkable investment. Lacking the dynamic potential Wonder Stocks prioritises, it does not merit further exploration.
