RNS Number:4512V
IDOX PLC
12 December 2005
IDOX plc
FINAL RESULTS
FOR IMMEDIATE RELEASE 12 December 2005
IDOX plc ("IDOX"), the information and knowledge management company, today
announced its final results for the year ended 31 October 2005.
Highlights:
* Turnover up 48% to #14.16m (2004: #9.56m)
* Profit before tax up 878% to #0.88m (2004: profit #0.09m)
* Cash up 69% to #4.72m (2004: #2.80m)
* Earnings per share up 270% to 0.85p (2004: 0.23p)
* Completion of core development of new Electronic Document and Records
Management System and accreditation by The National Archive
* The Board is confident of the Company's cash generation and will take
steps to facilitate payment of a regular dividend in calendar 2005/2006.
Andrew Fraser, Chief Executive of IDOX, said:
"I am pleased to report that IDOX is moving towards healthy profits and strong
cash generation. Developments in the period under review have further
strengthened the Company's position in the local authority and wider public
sector market. The recruitment aspect to our business continues to perform well.
Enhancements to our software suite received critical government accreditation
and we experienced growing demand for our information solutions products that
are reflected in a number of significant contract wins over the last 12 months.
IDOX is now in an excellent position to continue the growth of all three
business lines."
- ENDS -
For further information please contact:
Martin Brooks, Chairman 0870 333 7101
Andrew Fraser, CEO 0870 333 7101
Richard Kellett-Clarke, CFO 0870 333 7101
Nadja Vetter / Emma Consett, Cardew Group 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, information
solutions and people for information management and knowledge sharing, primarily
for the public sector enabling them to better manage their information.
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. Its flagship UKPlanning Managed Services solution delivers the first
true end-to-end e-Planning solution to enable Local Authorities to provide the
Government Planning process online
The Information solutions unit consists of a specialist consultancy that
specialises in advising and devising creative and innovative solutions to
problems associated with records, information, knowledge and content management.
In-house and external training for clients using experienced facilitators and
leading industry practitioners. A community for professionals; via subscription,
providing them with a comprehensive database of bibliographic abstracts, and the
largest collection of information in the UK, on all aspects of best practice,
governance in the public sector. Our Experts identify, summarise and manage a
vast resource of information to save member organisations time and money.
The focus for the recruitment team is to find and place information
professionals to deliver knowledge management, information management and
records management projects - this might be for interim management and project
teams, permanent or temporary posts.
IDOX plc
Chairman's Statement
For the year ended 31 October 2005
I am delighted to announce a strong set of results for the year ended 31 October
2005, during which significant and sustainable profits were achieved by IDOX plc
at pre and post tax level, accompanied by excellent cash generation. These
results, together with a strong sales pipeline, give the Board sufficient
confidence in the business going forward to anticipate the declaration of a
dividend during 2006. This will require a reduction in the share capital for
which shareholder and legal approval will be sought at the next Annual General
Meeting of the Group. As a result of the improvement in trading performance the
Group recognised the deferred tax asset which resulted in a one off gain to the
profit and loss account.
The Group's three business lines, Software, Information Solutions and
Recruitment, have all made considerable progress during the period under review.
The local authority market remains the Group's primary focus whilst it continues
to develop its presence in the wider public sector with relationships gained
through the companies the Group has acquired. The strength of IDOX's information
and knowledge management capability, combined with its technical expertise,
provides IDOX with a solid platform from which to further extend its innovative
information solutions in the public and, where appropriate, the private sector.
During the year, significant steps have been taken in an ongoing process to
strengthen the business ready for the next stage of IDOX's development. These
include:
* A strategy review testing our assumptions; we have confirmed our belief in the
public sector and our information solutions approach and we will continue to
look to identify strategic opportunities to accelerate IDOX's growth strategy
* A focus on organic growth, profitability, efficiency and cost control; some
benefit has been recognised during this reporting period and there will be
continued focus on this next year
* Strengthening the depth of the executive team through the appointment of
Richard Kellett-Clarke as Chief Financial Officer and Richard Pinder as Group
Sales and Marketing Director
* A comprehensive review of remuneration benefits and incentives undertaken by
independent remuneration consultants, with a view to helping the Board achieve
the optimum alignment between shareholder and employee interests
* The enhancement of a more formalised risk management process in line with
recognised good practice
* The move to modern London offices, on expiry of the existing lease, which will
aid efficiency, working of multi-disciplined teams and provide better facilities
for customers and staff alike.
Looking to the coming year, it is the Group's intention to continue to build on
the success of the past year and continue to pursue organic growth and resultant
profits while seeking suitable acquisitions that fit its strategic business and
stringent integration criteria.
It remains for me to thank our customers, suppliers and dedicated colleagues in
the Company for helping IDOX to achieve such a successful and transforming year.
Martin Brooks
Chairman
9 December 2005
IDOX plc
Chief Executive's Report
For the year ended 31 October 2005
Financial Review
IDOX revenues increased from #9.56 million to #14.16 million, an increase of 48%
overall, for the twelve months ended 31 October 2005. Profit before tax amounted
to #0.88 million (2004: profit of #0.09 million). Earnings per share was 0.85
pence (2004: 0.23 pence). Net cash at 31 October 2005 amounted to #4.72 million
(2004: #2.80 million). IDOX Software and Information Services increased its
annualised recurring revenue from #2.56 million at the end of October 2004 to
#2.92 million at 31 October 2005.
Market Dynamics
The Group has continued to expand within the local authority market and now has
a presence in over 45% of the 468 local authorities in the UK, with considerable
scope to increase revenues per client. We have broadened and deepened our
offering in this market, strengthening our position as a provider of
corporate-wide information management solutions. In the last 12 months the Group
has provided various software, information and knowledge management services to
over 172 central government departments and agencies. The opportunity pipeline
for our products and services continues to grow and the expected cross-selling
opportunities among our business divisions have begun to materialise.
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 continue to create opportunities for the Group within local
authorities and the wider public sector. The approval this year of our Records
Management Software product by The National Archives has further strengthened
our position in local authorities and will open new opportunities in other
government departments and agencies.
The unique combination of services built through acquisition and organically has
continued to add revenues with growing interest in information architecture and
our content auditing skills. The blend of our technical consultancy skills and
our information consulting capability in this area is beginning to develop new
offerings such as a content audit tool which semi-automates the content auditing
process, reducing the cost and improving the results. As the volume of content
accumulates within organisations the ability to manage, track and control this
becomes a significant problem and we believe the skills base, products and
services IDOX has built represent a significant opportunity.
Product and Service Offerings
The Group's respective business lines have made considerable progress during the
period. The local authority market remained the primary sector with 46% of the
Group's revenue. IDOX continued to strengthen its presence in the wider public
sector as a result of relationships gained through the companies the Group
acquired. This part of the business now represents 27% of the Group's revenues.
IDOX drives 27% of its business from the private sector which will continue to
develop in specific areas, such as professional services, which have proven
successful.
Software
The Software line of our business develops document and records management
software, electronic forms and web publishing solutions to capture and deliver
information via the web. Workflow is used to distribute information around an
organisation, be it an e-form filled in by a member of the public or a scanned
document. In addition to selling our software, the IDOX approach has been to use
these technology platforms to build solutions to meet specific vertical
requirements, such as the UKPlanning Managed Service. This 'software as a
service' model enables IDOX to manage the delivery of the product and services
on behalf of the client. To date, 21 local authorities outsource to us the
administration and presentation of their planning applications on the web.
We are particularly pleased with The National Archives accreditation of IDOX's
Records Management Software product. This product will provide IDOX's customers
with the tools to manage their information assets better and hence comply with
relevant legislation. To date there are only 11 companies with this UK
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 in managing their information assets.
This year the Software teams have also expanded the way in which our technology
is used within a Revenues and Benefits department, working in partnership with
Tonbridge and Malling Borough Council to build the next generation of products
to meet the specific needs of this complex, process-orientated environment.
Together with our work to extend the product in partnership with existing
customers for Housing and Social Services departments, the team have undoubtedly
completed the suite of products needed to deliver corporate solutions to local
government. This achievement provides the Group with the ability to deliver
larger contracts and the potential to address more information management needs
of its existing customers, creating bigger opportunities from its growing
customer base.
Further new business opportunities in the wider public sector continue to
matierialise, such as the recent e-forms implementations in the Metropolitan
Police and the Kent Police. The British Transport Police have recently
subscribed to the IDOX Information Service, demonstrating the potential wider
appeal of our solutions outside the local authority market. As we grow and
develop relationships in the wider public sector we will continue to find new
cross-selling opportunities for all of our business lines.
Information Solutions
IDOX's Information Solutions capability includes advisory and training services
focused on information and knowledge management, content provision for the
public sector arena and information orientated projects. These information
projects typically combine the Group's products and services to deliver a
particular outcome for a client.
We continue to expand our electronic library content to meet the needs of new
customers. For example, NHS Scotland has commissioned us to source, abstract and
add full text material on health inequalities and, as a consequence of four
police forces joining the service, we now source additional content to suit
their needs. Such developments benefit all of our subscribers with new content
as well as bringing in specific new revenue.
We continue to develop our particular expertise in planning, development and
regeneration through several information orientated projects for the Office of
the Deputy Prime Minister, English Partnerships, Communities Scotland and the
new Academy for Sustainable Communities. Our outsourced library service is now
enabling us to create and manage specialist web-based libraries for a range of
public sector clients.
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 across many different platforms, clean it, structure it and migrate it
to new platforms, making it easier to access and manage.
This unique blend of advice, content and technology has earned the Group
recognition as a major information and knowledge management specialist within
local and central government and their agencies.
Recruitment
The focus for the Recruitment team is to find and place information
professionals to deliver knowledge management, information management and
records management projects - this might be for interim management and project
teams, permanent or temporary posts.
Contract recruitment revenues, from placing interim managers, temporary staff
and project teams, was the area of strongest growth on the previous year. IDOX's
recruitment strength is its horizontal approach, helping clients in all sectors
recruit knowledge, information, content and records management staff. In the
last year the division has seen considerable movement of people with private
sector experience into the public and not-for-profit sectors where the demand
for information and records skills has been high.
We anticipate continued strong demand from all sectors in the coming year and
were particularly encouraged by the increase in the number of registered
vacancies from the private sector in the last three months of our financial
year.
The recruitment teams will be working with other parts of the Group to further
extend revenues in the areas of web and content management and information
architecture; areas where roles require strong technical capability combined
with traditional information management skills. During the last 12 months we
have seen a growing interest in the value-added services that we provide,
including career counselling, career management and career workshops to support
employees experiencing change in the workplace.
Strategic Alliances
The Group will continue to develop strategic partnerships, where appropriate, in
order to widen its offering to the public sector and other markets. Discussions
are regularly held with other potential partners and we do expect to announce
contracts with new partner organisations in coming months.
Personnel
The Group's employees totalled 139 at 31 October 2005, virtually unchanged
compared with 140 at 31 October 2004. This is the result of completing core
development projects and the redeployment of resources to customer facing roles.
The Group possesses a team and infrastructure capable of delivering and managing
continued business growth.
Strategy and Outlook
The Group concentrates on the delivery of Information and Knowledge management
solutions in the local authority market while continuing to develop client base
in the wider public sector. The focus of our work is on helping clients manage
their information assets more efficiently, particularly unstructured data. As
the volume and diversity of information continues to grow, organisations have
significant issues to overcome, be that legislation, compliance, efficiency or
maximising the use of the information assets held. A shortage of qualified
expertise in the market gives the Group confidence that we will be able to
continue our growth in our chosen fields and market.
It is anticipated that over the next few years, as both local and central
government bodies continue to deliver their e-Government programmes those
established suppliers, such as IDOX, will have to adapt to efficiency and
cost-saving drivers. The new initiatives such as the Gershon Efficiency Review
aim to reduce expenditure on administration. IDOX believes it is ideally suited
to continue assisting with improvements in efficiency, albeit under the
Transformational Government Agenda.
The Group has positioned itself to take advantage of the need to deliver
efficient content management solutions by uniquely being able to supply not just
the software but the three key components needed:
* 'fit for purpose' software products
* the skills and know-how for content delivery
* the people to deliver consistency in order to gain a return on investment.
The Group is continuing to augment its product and service offering and gain
market share, delivering increased revenues and profitability through organic
growth and appropriate accretive acquisitions.
Andrew Fraser
Chief Executive
9 December 2005
This announcement was approved by the Board of Directors on 9 December 2005.
IDOX plc
Consolidated Profit and Loss Account
For the year ended 31 October 2005
2005 2004
Note #000 #000
_____________________________________________________________________________
Turnover 2 14,155 9,555
External charges (5,048) (2,636)
________ ________
9,107 6,919
Staff costs (5,665) (4,778)
Other operating charges (2,685) (2,134)
________ ________
Operating profit 757 7
Interest receivable 119 82
________ ________
Profit on ordinary activities before taxation 876 89
Tax on profit on ordinary activities 3 700 292
________ ________
Profit for the year transferred to reserves 1,576 381
Earnings per share - basic and diluted (pence) 4 0.85p 0.23p
All operations are attributable to continuing operations. There are no
recognised gains or losses other than those set out above.
IDOX plc
Consolidated Balance Sheet
At 31 October 2005
2005 2004
#000 #000
______________________________________________________________________________
Fixed assets
Intangible assets 4,602 5,265
Tangible assets 325 247
________ ________
4,927 5,512
________ ________
Current assets
Debtors 4,132 3,312
Cash at bank and in hand 4,722 2,797
________ ________
8,854 6,109
Creditors: amounts falling due within one year (3,960) (3,266)
________ ________
Net current assets 4,894 2,843
________ ________
Total assets less current liabilities 9,821 8,355
Creditors: amounts falling due after more than one year (10) (20)
________ ________
Net assets 9,811 8,335
________ ________
Capital and reserves
Called up share capital 1,873 1,821
Capital redemption reserve 1,112 1,112
Share premium account 8,162 7,614
Shares to be issued 1,300 2,000
Other reserves 1,294 1,294
ESOP trust (79) (79)
Profit and loss account (3,851) (5,427)
________ ________
Shareholders' funds 9,811 8,335
________ ________
IDOX plc
Consolidated Cash Flow Statement
For the year ended 31 October 2005
2005 2004
Note #000 #000
__________________________________________________________________________________________________
Net cash inflow/(outflow) from operating activities 5 2,126 (801)
Returns on investments and servicing of finance
Interest received 119 82
______ ______
Net cash inflow from returns on investments and servicing of finance 119 82
Tax credit received - 244
Capital expenditure and financial investment
Purchase of tangible fixed assets (320) (240)
Sale of tangible fixed assets - 12
Purchase of investment (ESOP trust) - (51)
______ ______
Net cash outflow from capital expenditure and financial investment (320) (279)
Acquisitions
Purchase of companies during the year - (1,668)
Deferred consideration - (10)
Net cash balances acquired with the company - 380
______ ______
Net cash outflow from acquisitions - (1,298)
Financing
Issue of shares - 2,300
Costs for issue - (98)
______ ______
Net cash inflow from returns on investments and servicing of finance - 2,202
______ ______
Increase in cash 1,925 150
______ ______
IDOX plc
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 October 2005
2005 2004
#000 #000
________________________________________________________________
Profit for the financial year 1,576 381
Additions to ESOP trust - (51)
Shares issued 600 2,739
Shares to be issued (600) 2,000
Adjustment in estimate of shares to be issued (100) -
_______ _______
Net increase in shareholders' funds 1,476 5,069
Shareholders' funds at 1 November 2004 8,335 3,266
_______ _______
Shareholders' funds at 31 October 2005 9,811 8,335
_______ _______
IDOX plc
Notes to the announcement
For the year ended 31 October 2005
1 BASIS OF PREPARATION
The financial statements have been prepared in accordance with applicable United
Kingdom accounting standards and under the historical cost convention.
The principal accounting policies have remained unchanged from those set out in
the Group's 2004 annual report and accounts.
The financial information set out in this announcement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
consolidated balance sheet at 31 October 2005 and the consolidated profit and
loss account, consolidated cash flow statement and associated notes for the year
ended 31 October 2005 have been extracted from the statutory accounts upon which
the auditors opinion is unqualified and does not include any a statement under
section 237 of the Companies Act 1985.
Those financial statements have not yet been delivered to the Registrar of
Companies.
2 SEGMENTAL ANALYSIS
Turnover, operating profit and net assets by class of business are set out
below:
2005 2004
#000 #000
______________________________________________________
Turnover
Information management solutions 9,070 7,142
Information management recruitment 5,085 2,413
________ _______
14,155 9,555
________ _______
Operating profit
Information management solutions 1,005 111
Information management recruitment 315 275
________ _______
1,320 386
Goodwill amortisation (563) (379)
________ _______
757 7
________ _______
Net assets
Information management solutions 4,717 2,416
Information management recruitment 492 654
________ _______
5,209 3,070
Goodwill 4,602 5,265
________ _______
9,811 8,335
________ _______
3 TAX ON profit ON ORDINARY ACTIVITIES
The tax credit is made up as follows:
2005 2004
#000 #000
________________________________________________________________________________
Current tax
UK corporation tax 2 (27)
Research and development tax credit - (244)
_______ _______
Total current tax 2 (271)
Deferred tax - origination and reversal of timing differences (702) (21)
_______ _______
Tax on profit on ordinary activities (700) (292)
_______ _______
Unrelieved trading losses of #1,974,000 (2004: #3,337,000) which, when
calculated at the standard rate of corporation tax in the United Kingdom of 30%,
amounts to #592,000 (2004: #1,001,000). These remain available to offset against
future taxable trading profits. 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 may be subject to claw back by the HMRC but if this
occurred 2/3 of the tax losses surrendered in respect of that year would be
reinstated.
During the year the Group recognised deferred tax asset of #702,000 (2004:
#21,000). This was due to the improvement in the trading performance for the
past year and the strong sales pipeline for the forthcoming year.
Factors affecting the tax charge/(credit) in the period:
2005 2004
#000 #000
_________________________________________________________________________
Profit on ordinary activities before taxation 876 89
______ ______
Profit on ordinary activities multiplied by
the standard rate of corporation tax in the UK of 30% 263 27
Effects of:
Prior year adjustment 2 -
Expenses not deductible for tax purposes 154 22
Depreciation in excess of capital allowances 45 72
Other timing differences (21) 19
Difference in tax rates - (4)
Research and development - (244)
Decrease in tax losses (441) (163)
______ ______
2 (271)
______ ______
4 EARNINGS PER SHARE
The earnings per ordinary share is calculated by reference to the profit
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during each period, as follows:
2005 2004
#000 #000
_____________________________________________________________________________
Profit for the year 1,576 381
Weighted average number of shares in issue 185,229,865 166,384,328
Dilutive effect of share options 357,474 -
___________ ___________
Total 185,587,339 166,384,328
___________ ___________
Earnings per share - basic and diluted (pence) 0.85p 0.23p
5 NET CASH inflow/(OUTFLOW) FROM OPERATING ACTIVITIES
2005 2004
#000 #000
____________________________________________________________________________
Operating profit 757 7
Depreciation 242 256
Goodwill amortisation 563 379
Goodwill adjustment - 34
Loss on sale of fixed assets - 1
Increase in debtors (118) (739)
Increase/(decrease) in creditors 682 (739)
________ _______
Net cash inflow/(outflow) from operating activities 2,126 (801)
________ _______
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2005 2004
#000 #000
_____________________________________________________________________________
Increase in cash in the year, being movement in
net funds in the year 1,925 150
Net funds at 1 November 2004 2,797 2,647
_______ ________
Net funds at 31 October 2005 4,722 2,797
_______ ________
7 FURTHER COPIES
Copies of this announcement and the full annual 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, 2nd floor, Times Square,
160 Queen Victoria Street, London, EC4V 4 BF, Tel: 0870 333 7101. Copies of the
full financial statements will be posted to shareholders on 12 December 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
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