RNS Number:7336N
IDOX PLC
20 June 2005
IDOX plc
ANNOUNCEMENT OF INTERIM RESULTS
FOR IMMEDIATE RELEASE 20 June 2005
IDOX plc ("IDOX"), the information and knowledge management company, today
announced its interim results for the half year ended 30 April 2005.
Highlights:
* Turnover up 114% to #7.02m (2004: #3.28m)
* A #0.4m turnaround in profit before tax to #0.21m (2004: loss #0.19m)
* Cash up 54% to #3.72m (2004: #2.41m)
* Earnings per share rose to 0.12p (2004: 0.03p)
* Continued new client wins and successful expansion of services amongst
existing client base
* We expect the Group's performance in the second half of the year to be in line
with market expectations.
Andrew Fraser, Chief Executive of IDOX, said:
"IDOX has continued to build upon its achievements and we are pleased with the
progress that the Company has delivered in this half year. Our strategy of
enhancing our offering through the unique combination of software and content
along with advisory and recruitment services is beginning to pay off. Our track
record of delivering value added services to local government and our recent
successful expansion into other public sector markets, ideally equips us to
benefit from the exciting developments in this area."
ENDS
For further information please contact:
Andrew Fraser, CEO, IDOX plc T: 020 7954 3800
Martin Brooks, Chairman, IDOX plc T: 020 7954 3800
Nadja Vetter / Sofia Rehman, Cardew Group T: 020 7930 0777
Notes to editors
IDOX plc is a fast-growing information and knowledge management company,
specialising in the development and delivery of software products, services and
people for information management and knowledge sharing for both the public and
private sectors. The Group's focus is on managing the world of structured and
unstructured information for, and on behalf of, its clients.
The TFPL Advisory team specialises in devising creative and innovative solutions
to problems associated with records, information, knowledge and content
management. Where a skills gap is identified, the Recruitment teams place
candidates of all levels into permanent, contract, and interim management
positions. Training is also a core offering and is delivered in a variety of
formats using experienced facilitators and leading industry practitioners.
IDOX Software is one of the leading players in the local government market for
managing paper and electronic records. IDOX Software has several modules
designed to capture, manage, store, preserve and deliver information for use
within an organisation, and for access externally - by the public or other
partners.
The Group maintains a comprehensive database of bibliographic abstracts,
supported by the largest collection of information in the UK, on all aspects of
best practice and governance in the public sector. Expert information
professionals identify, summarise and manage a vast resource of information from
all sectors to save member organisations time and money. This outsourced library
service is available via annual subscription.
The Group has a leading position in putting the Local Government Planning
process online (its flagship Managed Services solution) and has developed the
first true end-to-end e-Planning solution for Local Authorities and their
citizens - UKPlanning.
Chairman's Statement
I am pleased to report good progress for the first six months of the financial
year, which puts us in a strong position for the remainder of this year to meet
market expectations.
Our efforts in the first half of the year have focused on improving the Group's
cash generation through ensuring that top line improvements flow to the bottom
line. Our success in this area has been encouraging, as shown by the good
progress achieved in the Group's earnings per share and strong cash generation.
Our achievements in this domain will allow IDOX to enhance value to shareholders
in the short term and extend its strategic options thereafter.
IDOX has continued to extend its presence in the public sector through offering
additional products and services that have a solid record of capability and
dependability. We have concluded, in revisiting our strategy, that local
government continues to be the Group's core market with further considerable
opportunities. With nearly 200 clients, this sector provides IDOX with a solid
platform on which to display its increasingly resource-efficient information and
knowledge management solutions. As a consequence, IDOX is becoming recognised
for its complete portfolio of services and the value enhancing benefits that it
delivers across the length and breadth of the sector. We are also excited by
opportunities now becoming available in the wider government marketplace,
particularly for IDOX's advisory, recruitment and training services.
In addition to underlining our presence in the public sector, the Group's skills
and capabilities are also increasingly applicable to some of the key private
sector industries such as professional services and finance, as well as the not
for profit sector, where opportunities are emerging.
Apart from sharpening its strategic focus, IDOX is also working on strengthening
its senior management, in preparation for the next phase of the Group's
development. In relation to this we will be updating our remuneration policies
to align the interests of senior managers and all other employees with those of
our shareholders. Furthermore, we will be paying particular attention to
improving our risk management and resilience as a consequence of our becoming a
larger and more complex organisation with a considerable pool of valuable
intellectual property to protect. We will report further progress on all these
matters by the financial year end.
Finally, I would like to express my excitement in assuming the role as the new
chairman and look forward to closely working with the Board, our customers and
very talented staff.
Martin Brooks
Chairman
17 June 2005
Chief Executive's Report
Financial Review
IDOX revenues increased from #3.28 million to #7.02 million, an increase of
114%, for the six months ended 30 April 2005. Profit before tax amounted to
#0.21 million (2004: loss of #0.19 million). Earnings per share was 0.12 pence
(2004: 0.03 pence). The gross margin for the period was 63%, down from 85% in
2004, as anticipated after the TFPL acquisition.
Net cash at 30 April 2005 amounted to #3.72 million (2004: #2.41 million). We
are pleased to report that the Group traded profitably for 4 out of the 6 months
under review (2004: 3 out of 6 months). IDOX Software and Information Services
increased its annualised recurring revenue from #2.4 million at the end of April
2004 to #2.7 million at 30 April 2005.
Client Wins and Market Dynamics
The Group continued to increase its market share within local government and,
through its acquisitions, is developing relationships within central government
departments, other public agencies and some private sector organisations.
In the local authority market we have contracted 12 new software clients since
October 2004 and provided information, advisory, training and recruitment
services to many others. The Group has extended its penetration within existing
clients and now has 190 local authority clients out of a possible 468 in the UK.
In the six month period the Group has provided knowledge and information
management advisory, training and interim management services to over 60 central
government departments and agencies.
As a result of our acquisition strategy, 80% of IDOX's revenue has been derived
from the public sector (including local authorities). The Group believes that it
has the potential to continue to expand its offering in the local authority
market. This expansion will be through both our existing customer base and into
new clients where there are large numbers of information projects and systems
still to be procured. Our strong presence in this market will enable us to
continue to win work.
The drive for efficiency and effectiveness, the Freedom of Information Act, the
Children's Bill, Priority Service Outcomes, the e-Government deadlines and other
similar initiatives will all continue to create opportunities for the Group in
local authorities and the wider public sector. The recent approval of our
Records Management Software product by The National Archives will further
strengthen our position in local authorities and open new opportunities in other
government departments and agencies.
We believe that the strength of our knowledge and information management
capability, combined with our technical expertise, will provide IDOX with a
solid platform from which to further extend its innovative solutions in the
public and, where appropriate, the private sector.
Product and Service Offerings
The Group's respective divisions have made considerable progress during the
period. We are particularly pleased with The National Archives approval of
IDOX's Records Management Software product. In addition, our recent acquisitions
have allowed us to benefit from the development of a new content management and
audit service.
The Group's capability now includes advisory services, specialist information
recruitment and training, content provision, information and records management
software and managed services. This unique blend has earned the Group
recognition as a major information and knowledge management specialist within
local government departments and public sector agencies.
Product and Services Development
IDOX believes that its new Records Management Software will open new market
segments such as central government. This product will provide IDOX's customers
with the capability of meeting the Public Records Offices' 2002 specification
concerning compliance with the Freedom of Information Act and other related
legislation. To date there are less than 10 companies in the country with this
accreditation. This state of the art J2EE application, designed using the very
latest software development techniques, provides significant technical and
operational benefits to our clients.
Our outsourced library service is now enabling us to create and manage
specialist web-based libraries for a range of public sector clients. To date, 17
local authorities now outsource to us the processing and presentation of their
planning applications on the web.
In response to client demand we have combined our consultancy expertise in
content management and information architecture with our technical capability to
develop a new web and content management audit service. Our team has developed
specialist tools and techniques to identify and collect large quantities of
content in many different platforms, clean it, structure it and migrate it to
new platforms, making it easier to access.
Strategic Alliances
The Group will continue to develop strategic partnerships, where appropriate, in
order to widen its offering to other markets. IDOX has entered into such a
partnership with CAPS Solutions Ltd (a subsidiary of ESRI (UK) Ltd). Discussions
are regularly held with other potential partners.
Personnel
The Group's employees totalled 140 at 30 April 2005, compared with 93 at 30
April 2004. The Group possesses a team and infrastructure capable of delivering
and managing rapid business growth.
A number of small cost efficiencies have been implemented in the last few
months. An example of this is the rationalisation of the software development
team from three offices down to two. The Manchester office will continue to
focus on electronic forms development, while all other software development will
be carried out in our Glasgow office. This provides a more cost-effective and
efficient software development team for the future.
We would also like to welcome Martin Brooks, our new chairman to the Board, who
joined during the period.
Strategy and Outlook
The acquisition strategy has helped to strengthen our sales proposition within
the local authority sector and we have a growing presence in the wider public
sector. We will continue to focus and develop our strengths in these strategic
markets. The diversification of revenue and revenue opportunities from these
acquisitions helps mitigate against the risks associated with our reliance on
the local authority market and a single product line.
We will continue to strengthen our partnership arrangements, and seek
opportunities that will allow us to gain further market penetration in areas
where the Group has limited skill and reference ability.
As a Group we now have the capability to deliver an integrated range of
sophisticated information and knowledge management products and services to the
public and private sectors.
The organic business has continued to grow as IDOX gains market share through
winning new business. The Group will endeavour to further expand its market
share, revenue and profitability through organic growth and appropriate
accretive acquisitions. We believe that IDOX is strongly positioned with a clear
strategy to continue its success and we remain optimistic about future growth
plans.
Andrew Fraser
Chief Executive
17 June 2005
The Interim Report was approved by the Board of Directors on 17 June 2005.
IDOX plc
Consolidated Profit and Loss Account
For the six months ended 30 April 2005
Note 6 months to 6 months to 12 months
-------- 30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Turnover 7,024 3,284 9,555
-------------------- -------- --------- --------- ---------
External charges (2,613) (505) (2,636)
-------------------- -------- --------- --------- ---------
4,411 2,779 6,919
-------- --------- --------- ---------
Staff costs (2,874) (2,068) (4,778)
-------------------- -------- --------- --------- ---------
Other operating
charges (1,371) (937) (2,134)
-------------------- -------- --------- --------- ---------
Operating profit/(loss) 166 (226) 7
-------------------- -------- --------- --------- ---------
Net interest 48 33 82
-------------------- -------- --------- --------- ---------
Profit/(loss) on ordinary
activities before
taxation 214 (193) 89
-------------------- -------- --------- --------- ---------
Tax on profit/(loss)
on ordinary activities (3) - 244 292
-------------------- -------- --------- --------- ---------
Profit for the period
transferred to reserves 214 51 381
-------------------- -------- --------- --------- ---------
Earnings per share
-------------------- -------- --------- --------- ---------
Basic and diluted (4) 0.12p 0.03p 0.23p
-------------------- -------- --------- --------- ---------
IDOX plc
Consolidated Balance Sheet
At 30 April 2005
At At At
30 April 30 April 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Fixed assets
------------------------------ --------- --------- ---------
Intangible fixed assets 4,976 1,590 5,265
------------------------------ --------- --------- ---------
Tangible assets 246 279 247
------------------------------ --------- --------- ---------
5,222 1,869 5,512
--------- --------- ---------
Current assets
------------------------------ --------- --------- ---------
Debtors 3,804 2,172 3,312
------------------------------ --------- --------- ---------
Cash at bank and in hand 3,724 2,414 2,797
------------------------------ --------- --------- ---------
7,528 4,586 6,109
--------- --------- ---------
Creditors:
amounts falling due
within one year (4,182) (3,159) (3,266)
------------------------------ --------- --------- ---------
Net current assets 3,346 1,427 2,843
------------------------------ --------- --------- ---------
Total assets less current
liabilities 8,568 3,296 8,355
------------------------------ --------- --------- ---------
Creditors:
amounts falling due
after more than one year (20) (30) (20)
------------------------------ --------- --------- ---------
Net assets 8,548 3,266 8,335
------------------------------ --------- --------- ---------
Capital and reserves
------------------------------ --------- --------- ---------
Called up share capital 1,872 1,537 1,821
------------------------------ --------- --------- ---------
Capital redemption reserve 1,112 1,112 1,112
------------------------------ --------- --------- ---------
Share premium account 8,162 5,159 7,614
------------------------------ --------- --------- ---------
Shares to be issued 1,400 - 2,000
------------------------------ --------- --------- ---------
Other reserves 1,294 1,294 1,294
------------------------------ --------- --------- ---------
ESOP trust (79) (79) (79)
------------------------------ --------- --------- ---------
Profit and loss account (5,213) (5,757) (5,427)
------------------------------ --------- --------- ---------
Shareholders' funds 8,548 3,266 8,335
------------------------------ --------- --------- ---------
IDOX plc
Consolidated Cash Flow Statement
For the six months ended 30 April 2005
Note 6 months to 6 months to 12 months
----- 30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Net cash inflow/(outflow) from
operating activities (5) 1,000 (185) (801)
--------------------------- ----- --------- --------- ---------
Returns on investments and servicing
of finance
--------------------------- ----- --------- --------- ---------
Interest received 48 35 82
--------------------------- ----- --------- --------- ---------
Net cash inflow from
returns on investments
and servicing of finance 48 35 82
--------------------------- ----- --------- --------- ---------
Taxation - 244 244
--------------------------- ----- --------- --------- ---------
Capital expenditure and financial
investment
--------------------------- ----- --------- --------- ---------
Purchase of tangible fixed
assets (121) (149) (240)
--------------------------- ----- --------- --------- ---------
Sale of tangible fixed
assets - - 12
--------------------------- ----- --------- --------- ---------
Purchase of investment - (51) (51)
--------------------------- ----- --------- --------- ---------
Net cash outflow from capital
expenditure and financial
investment (121) (200) (279)
--------------------------- ----- --------- --------- ---------
Acquisitions
--------------------------- ----- --------- --------- ---------
Purchase of companies - - (1,668)
--------------------------- ----- --------- --------- ---------
Net cash balances acquired with
companies - - 380
--------------------------- ----- --------- --------- ---------
Deferred consideration
paid for previous acquisition - (127) (10)
--------------------------- ----- --------- --------- ---------
Net cash outflow from
acquisitions - (127) (1,298)
--------------------------- ----- --------- --------- ---------
Financing
--------------------------- ----- --------- --------- ---------
Issue of shares - - 2,202
--------------------------- ----- --------- --------- ---------
Net cash inflow from
financing - - 2,202
--------------------------- ----- --------- --------- ---------
Increase/(decrease) in cash 927 (233) 150
--------------------------- ----- --------- --------- ---------
IDOX plc
Notes on the Interim Report
For the six months ended 30 April 2005
1 BASIS OF PREPARATION
The interim financial information has been prepared in accordance with
applicable United Kingdom accounting standards and under the historical cost
convention. The principal accounting policies of the Group are set out in the
Group's 2004 annual report and financial statements. The policies remain as
stated in the annual report for the year ended 31 October 2004. The financial
information set out in this report does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985. The figures for the year ended
31 October 2004 have been extracted from the statutory accounts, which have been
filed with the Registrar of Companies. The auditors' report on those financial
statements was unqualified and did not contain a statement under section 237(2)
of the Companies Act 1985. The interim financial statements have been reviewed
by the Company's auditors. A copy of the auditors' review report is attached to
the Interim Report.
2 SEGMENTAL ANALYSIS
Turnover, operating profit and net assets by class of business are set out
below:
6 months to 6 months to 12 months
30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Turnover
----------------------------
Information Management
Solutions 4,464 3,284 7,142
---------------------------- --------- --------- ---------
Information Management
Recruitment 2,560 - 2,413
---------------------------- --------- --------- ---------
7,024 3,284 9,555
--------- --------- ---------
Operating profit/(loss)
---------------------------- --------- --------- ---------
Information Management
Solutions 318 (137) 111
---------------------------- --------- --------- ---------
Information Management
Recruitment 137 - 275
---------------------------- --------- --------- ---------
455 (137) 386
--------- --------- ---------
Goodwill amortisation (289) (89) (379)
---------------------------- --------- --------- ---------
166 (226) 7
--------- --------- ---------
Net assets
---------------------------- --------- --------- ---------
Information Management
Solutions 3,014 1,676 2,416
---------------------------- --------- --------- ---------
Information Management
Recruitment 558 - 654
---------------------------- --------- --------- ---------
3,572 1,676 3,070
--------- --------- ---------
Goodwill 4,976 1,590 5,265
---------- --------- --------- ---------
8,548 3,266 8,335
--------- --------- ---------
3 TAX ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES
The tax credit is made up as follows:
6 months to 6 months to 12 months
30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Current tax
---------------------------- --------- --------- ---------
UK corporation tax - - (27)
---------------------------- --------- --------- ---------
Research and development
tax credits - (244) (244)
---------------------------- --------- --------- ---------
Total current tax - (244) (271)
---------------------------- --------- --------- ---------
Deferred tax - origination
and reversal of timing
differences - - (21)
---------------------------- --------- --------- ---------
Tax on profit/(loss)
on ordinary activities - (244) (292)
---------------------------- --------- --------- ---------
During the year ended 31 October 2004, #1,514,000 of tax losses relating to
prior periods (years ended 31 October 2001 and 31 October 2002) were surrendered
in exchange for the research and development tax credit. The tax credits in
relation to the year ended 31 October 2002 may be subject to claw back by the
Inland Revenue but if this occurred 2/3 of the tax losses surrendered in respect
of that year would be reinstated.
4 EARNINGS PER SHARE
The earnings per share is calculated by reference to the earnings attributable
to ordinary shareholders divided by the weighted average number of shares in
issue during each period, as follows:
6 months to 6 months to 12 months to
30 April 2005 30 April 2004 31 October 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Profit for the period 214 51 381
---------------------------- --------- --------- ---------
Weighted average number
of shares in issue 182,949,266 153,324,507 166,384,328
---------------------------- --------- --------- ---------
Basic and diluted
earnings per share 0.12p 0.03p 0.23p
---------------------------- --------- --------- ---------
The share options are anti dilutive under FRS 14.
5 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
6 months to 6 months to 12 months
30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Operating profit/(loss) 166 (226) 7
---------------------------- --------- --------- ---------
Depreciation 122 124 256
---------------------------- --------- --------- ---------
Goodwill amortisation 289 89 379
---------------------------- --------- --------- ---------
Goodwill adjustment - - 34
---------------------------- --------- --------- ---------
Loss on sale of fixed assets - 1 1
---------------------------- --------- --------- ---------
Increase in debtors (492) (643) (739)
---------------------------- --------- --------- ---------
Increase/(decrease) in
creditors 915 470 (739)
---------------------------- --------- --------- ---------
Net cash inflow/(outflow) from
operating activities 1,000 (185) (801)
---------------------------- --------- --------- ---------
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
6 months to 6 months to 12 months
30 April 30 April to 31 October
2005 2004 2004
(unaudited) (unaudited) (audited)
#000 #000 #000
--------- --------- ---------
Increase/(decrease) in cash
in the period, being movement
in net funds in the period 927 (233) 150
---------------------------- --------- --------- ---------
Net funds at 1 November 2004 2,797 2,647 2,647
---------------------------- --------- --------- ---------
Net funds at 30 April 2005 3,724 2,414 2,797
---------------------------- --------- --------- ---------
7 FURTHER COPIES
Copies of this announcement and the interim report and accounts are available,
free of charge, for a period of one month from the Company's Nominated Adviser
and Broker Noble & Company Limited, 120 Old Broad Street, London, EC2N 1AR, Tel:
020 7763 2200 or from IDOX plc, 17-18 Britton Street, London EC1M 5TL, Tel: 020
7954 3800. Copies of the interim report and accounts will be posted to
shareholders on 20 June 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
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