TIDMIDOX
RNS Number : 3632I
IDOX PLC
14 June 2011
14 June 2011
IDOX plc
Interim pre-tax adjusted* profits up 56% on building
momentum
IDOX plc (AIM: IDOX, 'the Group', 'IDOX'), the supplier of
software and services to the UK public sector, announces interim
results for the six months ended 30 April 2011.
Highlights
-- Revenue up 21% to GBP18.1m (H1 2010: GBP15.0m)
-- Recurring revenues now 65% (H1 2010: 61%) of Group
revenue
-- EBITDA margins up to 29% (H1 2010: 23%) on improved gross
margins and tight cost control
-- Adjusted* pre-tax profits up 56% to GBP4.7m (H1 2010:
GBP3.0m), reported pre-tax profit down 8% to GBP2.0m (H1 2010:
GBP2.1m) due to higher non-cash intangible amortisation and share
option charges
-- Adjusted* EPS up 63% at 1.01p, basic EPS 0.41p (H1 2010:
0.42p)
-- Interim dividend up 140% to 0.24p per share (2010: 0.1p)
-- New orders in core public sector software business up 11%,
increased mix of longer term shared and managed service
contracts
-- Completed and integrated four earnings-enhancing acquisitions
in 2010 and a fifth closed in early May
-- Cash GBP4.1m after funding four acquisitions, increasing
dividend and paying off remaining debt early.
Martin Brooks, Chairman, said:
"With a strong contracted sales pipeline already secured,
adjusted pre-tax profits up by 56% and revenue up by 21% compared
to the first half of last year, Idox is well positioned to deliver
a strong performance for the full trading year.
"The Group's excellent cash generating capabilities have been
well utilised to pay down all its debt early, drive the ongoing
process of earnings enhancing acquisitions and provide a further
big hike in the interim dividend."
* Adjusted pre-tax profits & EPS - derived by adding back
exceptional restructuring and corporate finance costs, amortisation
and share option costs
Enquiries:
IDOX plc +44 (0) 20 7332 6000
Martin Brooks, Chairman
Richard Kellett-Clarke, Chief Executive
William Edmondson, Chief Financial
Officer
Investec Investment Banking (Nomad) +44 (0) 20 7597 5000
Andrew Pinder
Patrick Robb
Cara Griffiths
finnCap +44 (0) 20 7600 1658
Charles Cunningham (Corporate Finance)
Stephen Norcross (Corporate Broking)
College Hill +44 (0) 20 7457 2020
Adrian Duffield/Kay Larsen
Overview
Idox continues to perform strongly and widen its public sector
and industrial offerings in large-scale document and information
management. The Group is building on an excellent start in the
engineering drawings business following the acquisition of McLaren
Software in late 2010 and further new opportunities are emerging in
both the Software and Information Solutions businesses. The
reinvigoration of the McLaren Software business under the Group's
ownership has also seen Idox enjoy its first reporting period of
meaningful international revenues.
At the same time, local government new business has continued
the recovery reported in the second half of last year, with an
increasing proportion of longer-term shared and managed service
contracts as part of the overall revenue mix.
Financial review
Revenues and operating profits saw strong progression in the
first half of the financial year as acquisitions helped deliver a
21% growth in revenues to GBP18.1m (H1 2010: GBP15.0m) and a 56%
increase in adjusted pre-tax profits (which exclude amortisation,
share option costs and exceptional charges) to GBP4.7m (H1 2010:
GBP3.0m).
Overall, 65% (H1 2010: 61%) of Group revenues are now recurring
giving the Group increased earnings visibility and driving cash
generation in the first half.
The Public Sector Software business delivered an increase in
revenues of 9% to GBP12.5m (H1 2010: GBP11.5m) and improved
recurring revenues to 66% (H1 2010: 59%), reflecting good progress
in winning longer-term recurring maintenance and managed-service
contracts over the past year in addition to the contribution from
Strand Electoral systems, acquired in May 2010. New software and
services sales to local government during the first half were
encouraging and, as software and services are delivered in the
second half of the year, the Group expects to see a return to
organic growth within the business.
McLaren Software, acquired in December 2010, delivered a maiden
contribution to revenue of GBP1.5m, aided by the $1.4m Chevron
Gorgon contract where implementation commenced in March. The
business is now integrated and its cost base refocused, enabling
McLaren to deliver a modest EBITDA contribution in the first half
with an expectation that this will accelerate further in the second
half.
The Information Solutions business increased revenues by 35% to
GBP2.5m (H1 2010: GBP1.9m), reflecting the impact of the
Grantfinder acquisition in May 2010. Subscription-based recurring
revenues from the grants and policy information business now
account for 67% (H1 2010: 53%) of divisional revenue. With the
completion of the integration of the Grantfinder, J4B and Idox
Information Solutions business into one division the combined
business delivered a four-fold increase in its contribution to
GBP0.4m (2010: GBP0.1m).
Gross margins in the Recruitment business increased by 18%,
reflecting the improved mix of higher margin permanent recruitment
business and a continued improvement in the recruitment market over
the past year. However, as a result of the switch into higher
margin permanent placements, revenues fell in the low-margin
contract recruitment business resulting in total divisional revenue
of GBP1.5m (H1 2010: GBP1.6m).
Gross margins for the Group improved from 81% to 86%, reflecting
a shifting mix across all divisions toward higher-margin recurring
revenues, aided by the acquisitions.
Operating costs increased to GBP10.4m (H1 2010: GBP8.7m) as a
result of acquisitions made over the past year. On a like-for-like
basis, excluding acquisitions, operating costs fell 6% reflecting
continued strong cost control in the business.
EBITDA increased by 51% to GBP5.2m at an improved margin of 29%
(H1 2010: GBP3.4m, 23%) that reflects the strong revenue growth,
increasing gross margins and continued cost control.
Net financing costs were flat at GBP0.2m (H1 2010: GBP0.2m) even
after including a GBP0.1m exceptional non-cash charge relating to
the early repayment of the term loan.
Adjusted pre-tax profits, which exclude exceptional charges,
amortisation and share option costs, were 56% higher at GBP4.7m (H1
2010: GBP3.0m).
Reported pre-tax profits were GBP2.0m (H1 2010: GBP2.1m) due to
increases in non-cash accounting charges. A significantly higher
amortisation charge of GBP1.8m (H1 2010: GBP0.6m) related to the
acquisitions made during the past year coupled with a higher share
option charge of GBP0.5m (H1 2010: GBP0.04m) due to the recent
share price appreciation and new grants of options reduced reported
profits.
Adjusted earnings per share increased by 63% to 1.01p (H1 2010:
0.62p). Basic earnings per share were 0.41p (H1 2010: 0.42p).
The Board continues to pursue a progressive dividend policy and
has increased the interim dividend by 140% to 0.24p (interim 2010:
0.1p). It will be paid on 18 August 2011 to shareholders on the
register at 5 August 2011.
The Group's strong cash generation has enabled it to fund the
acquisitions of McLaren Software, Strand, Grantfinder and LAMP from
cash resources. In addition, the Group paid off its GBP2.5m
remaining term loan, taken out at the time of the acquisition of
CAPS in 2007, one year early leaving the group with no outstanding
debt as at the end of April and cash balances of GBP4.1m.
Since 30 April 2011, a payment of GBP2.3m has been made to
acquire LalPac following clearance from the Office of Fair Trading.
The LalPac acquisition, which provides licensing software into the
local government market, will be immediately earnings
enhancing.
Operational review
The business continues to make good progress on a broad number
of fronts.
The Group's core public sector software business has continued
to evolve and invest to meet the changing needs of its customers in
the local government sector. The move towards devolved spending
authority and the focus on productivity and core services have
created opportunities for the Group to assist further its customers
in meeting government targets through the use of technology.
In the first half, the business invested in new technology and
processes to improve customer service, deliver low risk outcomes
and meet this new demand. The Group has also enhanced its hosting
capability and invested in new processes to ensure resilience and
improved communication and security. As a consequence, the Group
has been awarded 27001 accreditation (Information Security
Management System).
Further investment in Information Technology Infrastructure
Library (ITIL) compliant help desk solutions development resulted
in product improvement and boosted productivity, enabling the Group
to provide innovative solutions to fill gaps left by the withdrawal
of government initiatives in the local government sector, such as
the recently launched Consultee Cloud - a hosted data exchange
system between disparate systems. The Consultee Cloud is currently
applicable to planners and consultee bodies but has wider
applicability for other groupings of stakeholders.
The Information Solutions business has completed the integration
of last year's acquisitions and standardised around a common data
and technical platform. The consulting and projects teams have
further expanded their capability into delivering a variety of web
projects as well as knowledge and information management solutions
involving the integration of Sharepoint technology to deliver
results.
Recruitment continues to make progress in a difficult market
with steady growth in permanent and direct engagement revenues.
There has been some improvement in contract revenues but, as yet,
no recovery in government spend.
McLaren Software, the supplier of engineering document
management and control applications acquired in December 2010, has
had some notable contract wins and is focusing on a number of key
developments related to asset management and complex capital
project control.
During the first half of the year the Group has started to
rationalise and combine office space which, by October, will leave
the Group with just four UK offices - in London, Glasgow, Newbury
and Manchester.
Outlook
The UK Government's Comprehensive Spending Review published last
October and the subsequent local government settlement have
provided a more stable environment for IT spending plans. In
addition, markets for Idox's measured diversification into the
technically related areas of engineering drawings, in sectors such
as Oil and Gas, are upbeat and globally diversified.
However, the wider economic outlook remains uncertain as
European governments in particular struggle to cope with the impact
of the global banking crisis.
The Board is encouraged by the immediate outlook in Idox's
markets and results in the first half of the year which reflect an
improved seasonality compared to prior years. The Board expects
organic growth to return to its businesses over the full year, but
maintains a degree of caution in light of these macroeconomic
uncertainties.
Continued focus on long-term relationships along with products
that yield real economic benefits to the customer and bring high
recurring revenues, margins and attractive cash generation remain
the best defence against such possibilities. The Group expects to
reinforce this process by securing further acquisitions with
similar characteristics in its chosen public sector and corporate
markets.
Consolidated Interim Statement of Comprehensive Income
For the six months ended 30 April 2011
6 months 6 months 12 months
to to to
30 April 30 April 31 October
11 10 10
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Revenue 3 18,108 14,961 31,268
External charges (2,547) (2,881) (5,290)
------------- ------------- ------------
Gross margin 15,561 12,080 25,978
Staff costs (8,339) (7,057) (14,170)
Other operating charges (2,056) (1,605) (3,091)
------------- ------------- ------------
Earnings before
amortisation,
depreciation,
restructuring, corporate
finance and share option
costs 5,166 3,418 8,717
Depreciation (223) (232) (403)
Amortisation (1,823) (636) (2,260)
Restructuring costs (185) (40) (187)
Corporate finance costs (197) (167) (438)
Share option costs (535) (37) (185)
------------- ------------- ------------
Operating profit 2,203 2,306 5,244
Finance income 68 11 15
Finance costs (300) (180) (316)
Profit before taxation 1,971 2,137 4,943
Income tax expense 4 (575) (696) (1,305)
------------- ------------- ------------
Profit for the period 1,396 1,441 3,638
Other comprehensive income
for the period net of
tax 101 - 35
------------- ------------- ------------
Total comprehensive income
for the period
attributable to owners of
the parent 1,497 1,441 3,673
============= ============= ============
Earnings per share
Basic 5 0.41p 0.42p 1.07p
Diluted 5 0.39p 0.42p 1.05p
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Balance Sheet
At 30 April 2011
At At
At 30 April 31 October
30 April 11 10 10
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 403 612 504
Intangible assets 47,149 32,266 44,629
Other long-term financial
assets 70 - 855
Deferred tax assets 539 331 283
------------- ------------- ------------
Total non-current assets 48,161 33,209 46,271
Trade and other receivables 13,159 9,866 5,915
Cash at bank 4,060 14,163 2,004
------------- ------------- ------------
Total current assets 17,219 24,029 7,919
------------- ------------- ------------
Total assets 65,380 57,238 54,190
------------- ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 3,363 2,430 2,784
Other liabilities 23,499 17,809 11,794
Provisions 133 130 133
Current tax 1,349 946 1,052
Borrowings - 1,000 1,000
------------- ------------- ------------
Total current liabilities 28,344 22,315 16,763
Non-current liabilities
Deferred tax liabilities 4,979 3,352 4,549
Borrowings - 2,323 1,866
------------- ------------- ------------
Total non-current liabilities 4,979 5,675 6,415
------------- ------------- ------------
Total liabilities 33,323 27,990 23,178
------------- ------------- ------------
Net assets 32,057 29,248 31,012
============= ============= ============
EQUITY
Called up share capital 3,442 3,442 3,442
Capital redemption reserve 1,112 1,112 1,112
Share premium account 9,903 9,903 9,903
Treasury reserve (154) (206) (455)
Shares options reserve 961 491 630
Merger reserve 1,294 1,294 1,294
ESOP trust (91) (84) (93)
Retained earnings 15,590 13,296 15,179
------------- ------------- ------------
Total equity 32,057 29,248 31,012
============= ============= ============
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Statement of Changes in Equity
Issued Capital Share Share
share redemption premium Treasury options Merger ESOP Retained
capital reserve account reserve reserve reserve trust earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 November 2009
(audited) 3,442 1,112 9,903 (212) 454 1,294 (88) 12,268 28,173
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Share options granted - - - - 37 - - - 37
Share repurchase - - - 6 - - - - 6
Equity dividends paid - - - - - - - (413) (413)
ESOP trust - - - - - - 4 - 4
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Transactions with owners - - - 6 37 - 4 (413) (366)
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Profit for the period - - - - - - - 1,441 1,441
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Total comprehensive income for
the period - - - - - - - 1,441 1,441
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Balance at 30 April 2010
(unaudited) 3,442 1,112 9,903 (206) 491 1,294 (84) 13,296 29,248
======== =========== ======== ========= ======== ======== ======= ========= ========
Transfer on exercise of share
options - - - - (9) - - (5) (14)
Purchase of Treasury shares - - - (249) - - - - (249)
Share options granted - - - - 148 - - - 148
Equity dividends paid - - - - - - - (344) (344)
ESOP trust - - - - - - (9) - (9)
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Transactions with owners - - - (249) 139 - (9) (349) (468)
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Profit for the period - - - - - - - 2,197 2,197
Other comprehensive income
Gain on investment - - - - - - - 35 35
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Total comprehensive income for
the period - - - - - - - 2,232 2,232
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Balance at 31 October 2010
(audited) 3,442 1,112 9,903 (455) 630 1,294 (93) 15,179 31,012
======== =========== ======== ========= ======== ======== ======= ========= ========
Share options granted - - - - 466 - - 118 584
Purchase of Treasury shares - - - (218) - - - - (218)
Transfer on exercise of share
options - - - 519 (135) - - - 384
Equity dividends paid - - - - - - - (1,204) (1,204)
ESOP trust - - - - - - 2 - 2
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Transactions with owners - - - 301 331 - 2 (1,086) (452)
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Profit for the period - - - - - - - 1,396 1,396
Other comprehensive income
Gain on investment - - - - - - - 23 23
Exchange differences in reserves - - - - - - - 78 78
-------- ----------- -------- --------- -------- -------- ------- --------- --------
Total comprehensive income for
the period - - - - - - - 1,497 1,497
-------- ----------- -------- --------- -------- -------- ------- --------- --------
At 30 April 2011 (unaudited) 3,442 1,112 9,903 (154) 961 1,294 (91) 15,590 32,057
-------- ----------- -------- --------- -------- -------- ------- --------- --------
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Statement of Cash Flows
For the six months ended 30 April 2011
6 months 6 months
to to 12 months to
30 April 30 April 31 October
2011 (unaudited) 2010 (unaudited) 2010 (audited)
GBP000 GBP000 GBP000
Cash flows from
operating
activities
Profit for the
period before
taxation 1,971 2,137 4,943
Adjustments for:
Depreciation 223 232 403
Amortisation 1,823 636 2,260
Amortisation of
Xtra shares 4 - -
Loss on disposal of
property, plant
and equipment - - 160
Finance income (2) (11) (15)
Finance costs 109 180 189
Debt issue costs
amortisation 134 - 85
Exchange (gain)/
loss (54) - 8
Share option costs 535 37 185
Movement in
receivables (6,712) (3,404) 1,055
Movement in
payables 9,524 8,897 (563)
------------------ ------------------ ----------------
Cash generated by
operations 7,555 8,704 8,710
Tax on profit paid (835) (101) (1,009)
Net cash from
operating
activities 6,720 8,603 7,701
Cash flows from
investing
activities
Acquisition of
subsidiary net of
cash acquired (1,000) - (5,543)
Sale/(purchase) of
listed investment 964 - (820)
Purchase of
property, plant &
equipment (195) (88) (613)
Purchase of
intangible assets (384) (292) (3,470)
Interest received 2 11 15
Net cash used in
investing
activities (613) (369) (10,431)
Cash flows from
financing
activities
Interest paid (110) (137) (189)
Loan repayments (3,000) (500) (1,000)
Equity dividends
paid (1,204) (413) (757)
Sale/(purchase) of
own shares 263 10 (267)
------------------ ------------------ ----------------
Net cash flows from
financing
activities (4,051) (1,040) (2,213)
------------------ ------------------ ----------------
Net movement on
cash and cash
equivalents 2,056 7,194 (4,943)
Cash and cash
equivalents at the
beginning of the
period 2,004 6,947 6,947
Foreign exchange
loss on cash held
in foreign
currency - 22 -
------------------ ------------------ ----------------
Cash and cash
equivalents at the
end of the period 4,060 14,163 2,004
================== ================== ================
The accompanying notes form an integral part of these financial
statements.
Notes to the Interim Consolidated Financial Statements
For the six months ended 30 April 2011
1. GENERAL INFORMATION
IDOX plc is a leading supplier of software and services for the
management of local government and other organisations. The company
is a public limited company which is listed on the Alternative
Investment Market and is incorporated and domiciled in the UK. The
address of its registered office is 160 Queen Street, London, EC4V
4BV. The registered number of the company is 03984070.
2. BASIS OF PREPARATION
The financial information for the period ended 30 April 2011 set
out in this interim report does not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 October 2010
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain statements under Section 498(2) or Section 498(3) of the
Companies Act 2006.
The interim financial information has been prepared using the
same accounting policies and estimation techniques as will be
adopted in the Group financial statements for the year ending 31
October 2011. The Group financial statements for the year ended 31
October 2010 were prepared under International Financial Reporting
Standards as adopted by the European Union. These interim financial
statements have been prepared on a consistent basis and format. The
provisions of IAS 34 'Interim Financial Reporting' have not been
applied in full.
3. SEGMENTAL ANALYSIS
As at 30 April 2011, the Group is primarily organised into three
main business segments, which are detailed below.
Financial information is reported to the Board on a business
unit basis with revenue and operating profits split by business
unit. Each business unit is deemed a reportable segment as each
offer different products and services.
-- Software - delivers software and service solutions to mainly
local government customers across a broad range of departments
-- Information Solutions - delivering both an information
service and consultancy services to a diverse range of customers
across both private and public sectors
-- Recruitment - providing personnel with information,
knowledge, records and content management expertise to a diverse
range of customers
Segment revenue comprises sales to external customers and
excludes gains arising on the disposal of assets and finance
income. Segment profit reported to the board represents the profit
earned by each segment before the allocation of taxation, interest
payments and share option charges. The assets and liabilities of
the Group are not reviewed by the chief decision-maker on a segment
basis.
The Group does not place reliance on any specific customer and
has no individual customer that generates 10% or more of its total
Group revenue.
The segment results for the 6 months to 30 April 2011 are as
follows:
UK Netherlands US Australia Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenues from
external customers 16,522 284 622 680 18,108
-------- ------------ -------- ---------- --------
Information
Software Solutions Recruitment Total
GBP000 GBP000 GBP000 GBP000
Revenues from external
customers 14,106 2,515 1,487 18,108
Cost of sales (1,561) (154) (832) (2,547)
--------- ------------ ------------ ---------
Gross profit 12,545 2,361 655 15,561
Operating costs (7,959) (1,965) (471) (10,395)
--------- ------------ ------------ ---------
Profit before interest,
tax, depreciation,
amortisation, share option
and restructuring costs 4,586 396 184 5,166
--------- ------------ ------------ ---------
Depreciation (174) (46) (3) (223)
Amortisation (586) (40) (4) (630)
Share options costs (499) (22) (14) (535)
Restructuring (185) - - (185)
Profit before interest
and tax 3,142 288 163 3,593
Interest receivable 1 2 - 3
--------- ------------ ------------ ---------
Segment profit (see
reconciliation below) 3,143 290 163 3,596
========= ============ ============ =========
The segment results for the 6 months to 30 April 2010 are as
follows:
UK Netherlands Total
GBP000 GBP000 GBP000
Revenues from
external customers 14,687 274 14,961
-------- ------------ --------
Information
Software Solutions Recruitment Total
GBP000 GBP000 GBP000 GBP000
Revenues from external
customers 11,543 1,866 1,552 14,961
Cost of sales (1,686) (196) (999) (2,881)
--------- ------------ ------------ --------
Gross profit 9,857 1,670 553 12,080
Operating costs (6,547) (1,598) (517) (8,662)
--------- ------------ ------------ --------
Profit before interest, tax,
depreciation, amortisation
share option and
restructuring costs 3,310 72 36 3,418
--------- ------------ ------------ --------
Depreciation (188) (44) - (232)
Amortisation (108) - - (108)
Share option costs (37) - - (37)
Restructuring (30) - (10) (40)
Profit before interest
and tax 2,947 28 26 3,001
Interest receivable 6 3 - 9
--------- ------------ ------------ --------
Segment profit (see
reconciliation below) 2,953 31 26 3,010
--------- ------------ ------------ --------
Reconciliations of reportable profit:
6 months 6 months
to to
30 April 30 April
2011 (unaudited) 2010 (unaudited)
GBP000 GBP000
Total profit for reportable segments 3,596 3,010
Amortisation (1,193) (528)
Corporate finance
costs (197) (167)
Other financial
costs (235) (178)
------------------ ------------------
Profit before
taxation 1,971 2,137
================== ==================
Other financial costs relate to loan interest, exchange
differences and amortisation, which have not been included in
reportable segments. Amortisation arising on IFRS intangible assets
is not allocated to business segments.
4. TAX ON PROFIT ON ORDINARY ACTIVITIES
6 months to 12 months to
6 months to 30 April 31 October
30 April 2011 2010 2010
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
Corporation tax on profits for
the period 1,132 860 1,909
Over provision in respect of
prior periods - - (37)
------------ ------------ -------------
Total current tax 1,132 860 1,872
------------ ------------ -------------
Deferred tax
Origination and reversal of
timing differences (557) (164) (373)
Amortisation of intangibles
difference in tax rate - - (198)
Adjustments in respect of prior
periods - - 4
------------ ------------ -------------
Total deferred tax (557) (164) (567)
------------ ------------ -------------
Total tax charge 575 696 1,305
------------ ------------ -------------
Unrecognised trading losses of GBP8,937,870 (30 April 2010:
GBP116,415), which when calculated at the standard rate of
corporation tax in the United Kingdom of 26%, amounts to
GBP2,323,846 (30 April 2010: GBP32,596). The increase in trading
losses is due to the acquisition of McLaren Group. These remain
available to offset against future taxable trading profits of a
subsidiary. Unrecognised capital losses of GBP4,210,189 (30 April
2010: Nil) remain available to offset against future capital
profits.
5. 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 12 months
to to
6 months to 30 April 31 October
30 April 11 10 10
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit for the period 1,396 1,441 3,638
Basic earnings per share
Weighted average number of shares
in issue 343,332,330 341,967,979 341,003,888
Basic earnings per share 0.41p 0.42p 1.07p
------------ -------------- --------------
Diluted earnings per share
Weighted average number of shares
in issue used in basic earnings
per share calculation 343,332,330 341,967,979 341,003,888
Dilutive share options 11,941,507 4,150,752 5,841,718
------------ -------------- --------------
Weighted average number of shares
in issue used in dilutive
earnings per share calculation 355,273,837 346,118,731 346,845,606
Diluted earnings per share 0.39p 0.42p 1.05p
------------ -------------- --------------
Adjusted earnings per
share
6 months 6 months 12 months
to to to
30 April 30 April 31 October
11 10 10
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit for the period 1,396 1,441 3,638
Adjusting items:
Share option costs 535 37 185
Restructuring costs 185 40 187
Amortisation 1,823 636 2,260
Corporate finance costs 197 167 438
Taxation on above items (664) (199) (737)
------------- -------------- -----------------
Adjusted profit for the period 3,472 2,122 5,971
------------- -------------- -----------------
Adjusted basic earnings per 1.01p 0.62p 1.75p
share
Adjusted diluted earnings per 0.98p 0.61p 1.72p
share
The weighted average number of shares in issue has increased due
to a reduction in Treasury shares held.
6. DIVIDENDS
During the period a dividend was paid in respect of the year
ended 31 October 2010 of 0.35p per Ordinary share at a total cost
of GBP1,204,000 (2009: 0.12p, GBP413,000).
A dividend of 0.24p per ordinary share at a total cost of
GBP823,000 has been proposed in respect of the interim period ended
30 April 2011 (2010: 0.10p, GBP344,000).
7. ACQUISITIONS
On 13 December 2010, the Group acquired the entire share capital
of McLaren Software Group Limited for a consideration of GBP3.
McLaren is a leading supplier of engineering document management
and control applications serving many leading international
companies in industries including oil & gas, mining, utilities,
pharmaceuticals and transportation.
The acquisition of McLaren extends Idox's core skills in
planning and building document management into the related area of
engineering drawings. This will provide Idox with the opportunity
of broadening its activities into complementary UK and
international markets in both the private and public sector,
particularly where the management of complex engineering systems
interacts with regulatory oversight.
Goodwill arising on the acquisition of McLaren has been
capitalised and consists largely of the workforce value, synergies
and economies of scale expected from combining the operations of
McLaren Group with Idox. None of the goodwill recognised is
expected to be deductible for income tax purposes. The purchase of
McLaren has been accounted for using the acquisition method of
accounting.
Provisional
fair value
Book value adjustments Fair value
GBP000 GBP000 GBP000
Intangible assets - 2,812 2,812
Property, plant and
equipment 31 (19) 12
Trade receivables 448 - 448
Other receivables 121 (37) 84
----------- ------------- -----------
TOTAL ASSETS 600 2,756 3,356
Trade payables 65 - 65
Deferred revenue 1,276 - 1,276
Other creditors 1,410 10 1,420
Bank debt 1,000 - 1,000
Deferred tax liability - 731 731
----------- -------------
TOTAL LIABILITIES 3,751 741 4,492
----------- -------------
NET DEFICIT (1,136)
Purchased goodwill
capitalised 1,136
-----------
Total consideration 3
-----------
The fair values stated above are provisional. The fair value
adjustment for the intangible assets relates to customer
relationships, trade names and software. A related deferred tax
liability has also been recorded as a fair value adjustment.
The fair value of trade debtors is equal to the gross
contractual amounts receivable. All debts have been reviewed and
are considered recoverable.
Other adjustments made relate to accrued income adjustment to
bring in line with group policy and consultancy fees.
The revenue included in the consolidated interim statement of
comprehensive income since 13 December 2010 contributed by McLaren
Group was GBP1,517k. McLaren group also contributed a loss after
tax of GBP96k for the same period. If McLaren Group had been
included from 1 November, it would have contributed revenue of
GBP1,849k and a loss after tax of GBP455k.
Acquisition costs of GBP125k have been written off in the
consolidated interim statement of comprehensive income.
8. POST BALANCE SHEET EVENTS
On 5 May 2011 the Group acquired the entire share capital of
LalPac Ltd ('LalPac') for a gross consideration of up to GBP2.6m
payable in cash from existing resources.
LalPac is one of the UK's leading providers of licensing
management software and services, supplying 131 local authorities
covering the full range of licensing including Taxi, Private Hire,
Gambling and General Licensing functions. LalPac reported revenues
of GBP1.5m in 2010 (unaudited), of which more than 85% is
recurring.
Due to the acquisition completing so close to the period end,
there has been insufficient time available to enable the
identification of all assets, liabilities and contingent
liabilities existing at the date of acquisition and to perform a
full and reliable fair value exercise thereon. Consequently, full
disclosure as set out in IFRS 3(R) "Business combinations" has not
been given as it is impracticable to provide this information.
Independent Review Report to IDOX plc
For the six months ended 30 April 2011
Introduction
We have been engaged by the company to review the financial
information in the half-yearly financial report for the six months
ended 30 April 2011 which comprises the Consolidated Interim
Statement of Comprehensive Income, the Consolidated Interim Balance
Sheet, the Consolidated Interim Statement of Changes in Equity, the
Consolidated Interim Statement of Cash Flows and the related notes.
We have read the other information contained in the half yearly
financial report which comprises only the highlights, overview,
financial review, operational review and current trading and
outlook and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the company those matters we are required to state
to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules of the London
Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly financial report are consistent with those which will
be adopted in the annual accounts having regard to the accounting
standards applicable for such accounts.
As disclosed in Note 2,the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial information in the half-yearly
financial report has been prepared in accordance with the basis of
preparation in Note 2.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 April 2011
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
GRANT THORNTON UK LLP AUDITOR
London
13 June 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFUFWDFFSESM
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