TIDMIDOX
RNS Number : 1120G
IDOX PLC
26 June 2012
26 June 2012
IDOX plc
Interim adjusted* pre-tax profits up 54% on acquisitions and
organic growth
IDOX plc (AIM: IDOX, 'IDOX' or the 'Group'), a leading supplier
of software and services, announces interim results for the six
months ended 30 April 2012.
Highlights
-- Revenue up 58% to GBP28.6 m (H1 2011: GBP18.1m)
-- Organic revenue growth of 10%
-- International revenues 31% of total (H1 2011: 9%)
-- Adjusted* pre-tax profits up 54% to GBP7.3m (H1 2011:
GBP4.7m), reported pre-tax profit up 76% to GBP3.5m (H1 2011:
GBP2.0m)
-- Adjusted* EPS up 56% at 1.58p (H1 2011: 1.01p); basic EPS 0.69p (H1 2011: 0.41p)
-- Interim dividend up 15% to 0.275p per share (2011: 0.24p)
-- Completed three earnings-enhancing acquisitions in the first
half of 2012 with a further one completed after the period end in
May 2012
-- Net Debt GBP12.1m after funding three acquisitions totalling
GBP15.0m, and increased dividend (H1 2011: net cash GBP4.1m)
-- Revenue blend between Public and Private operations moving towards parity
* Adjusted pre-tax profits & EPS - derived by adding back
exceptional restructuring and corporate finance costs, amortisation
and share option costs.
Martin Brooks, Chairman, said:
"The first half of 2012 saw the Group report significant growth
in both revenue and profitability. As well as the Group recording
strong organic growth, our recent acquisitions have quickly and
effectively been integrated, allowing us to expand our operations
across an international market place. This new international focus
allows revenue to be spread across a number of sectors and
geographies, reducing our reliance on the UK public sector.
"We continue to win major new clients across the Group,
including the Greater London Authority in our Public Sector
division and internationally within our enlarged Engineering
Information Management division including Southern, Occidental and
CH2M Hill. These new customers demonstrate our increasing ability
to win and deliver major contracts to large governmental
organisations and multi-national corporations"
Enquiries:
IDOX plc +44 (0) 20 7332 6000
Martin Brooks, Chairman
Richard Kellett-Clarke, Chief Executive
William Edmondson, Chief Financial
Officer
Investec Investment Bank plc (NOMAD
& Broker) +44 (0) 20 7597 5100
Andrew Pinder / Patrick Robb
FinnCap (Broker) +44 (0) 20 7600 1658
Stuart Andrews / Stephen Norcross
Leander PR +44 (0) 7795 168 157
Christian Taylor-Wilkinson
About IDOX plc
IDOX plc is a supplier of specialist document management
collaboration solutions and services to the UK public sector and
increasingly to highly regulated asset intensive industries around
the world in the wider corporate sector.
Its Public Sector Software Division is the leading applications
provider to UK local government for core functions relating to
land, people and property, such as its market leading planning
systems and election management software. Over 90% of UK local
authorities are now customers. The Group provides public sector
organisations with tools to manage information and knowledge,
documents, content, business processes and workflow as well as
connecting directly with the citizen via the web.
Through the Information Solutions Division IDOX also supplies,
predominantly to the public sector, decision support content such
as grants and planning policy information as well as related
specialist services.
The Engineering Information Management Division delivers
engineering document management and control applications to many
leading companies in industries such as oil & gas, mining,
utilities, pharmaceuticals and transportation around the world.
In addition the Group provides knowledge and content management
skills to customers through its TFPL branded recruitment
division.
The Group employs over 450 staff located in the UK, the USA,
Europe, India and Australia. For more information see
www.idoxplc.com
Overview
IDOX delivered a strong performance in the first half of 2012
against a background of global uncertainty and falling confidence
in the world's major economies. It was particularly pleasing to see
that across the Group there was a meaningful improvement in organic
growth, particularly in the Engineering Information Division, as
well as a 58% Group headline revenue growth rate. This has
translated into a significant rise in adjusted pre-tax profits to
GBP7.3m (H1 2011: GBP4.7m), a 54% uplift.
New initiatives and innovations across the Group have helped to
achieve this excellent result and a new divisional management
structure, together with the creation of lower level profit centre
teams, have accentuated the focus on performance.
The acquisition of CTSpace completed early in the current
financial year has now been fully integrated with McLaren Software,
on schedule, to create the enlarged Engineering Information
Management ("EIM") Division and is operating in line with the post
acquisition strategy.
The year started strongly with the Information Solutions
Division winning the landmark managed services outsourcing contract
for the Greater London Authority (GLA) library. This has been
successfully completed and went live at the end of April 2012,
offering an improved service to GLA internal information service
users.
The first half ended with a number of key customer deals in the
Public Sector Software Division where there were further wins
against incumbent competitors. The EIM Division further broadened
its customer base with contract wins in utilities with Southern
Corporation, in engineering and construction with CH2M Hill, and in
the core oil & gas market with Occidental.
The Group completed two acquisitions either side of the half
year. Opt2Vote, based in Northern Ireland, complements our previous
acquisition in 2010 of Strand Electoral systems to give us a fully
integrated elections solution product. In May 2012 Opt2Vote
successfully provided the e-count solution for Scotland in the
local government elections.
Dutch based Currency Connect, now renamed Innovation Connect,
was acquired in May 2012 to expand the capabilities of our
Information Solutions Division. In addition to grants information
we now have an expanded offering to encompass grants training,
consulting and management. Our existing Dutch grants business has
moved to Goor, Netherlands to join Innovation Connect in a merged
location.
Operational Review
The Public Sector Software Division has completed a wide ranging
review of systems and internal processes to change the way it
delivers services to customers to enable it to continue to improve
performance. These changes will improve customer service and
productivity with the introduction of a new ERP system in the
second half of the year. Three of the four off-premise outsourcing
contracts which closed at the end of last year went live during the
period with the remaining one, Westminster, on track to go live in
June 2012.
The EIM Division has recently launched a new website combining
the legacy McLaren and CTSpace websites and started to offer an
integrated enterprise and Cloud solution to meet customer demand.
The integrated EIM team has now agreed on a combined integrated
roadmap and work has commenced on a range of product enhancements
to improve and broaden the current offering.
The Information Solutions Division's renewal rates were ahead of
last year and its project work pipeline has continued to grow. The
newly-acquired Interactive Dialogues e-learning products are now
being used across the Group as well as launching a new product to
cover corporate training and monitoring of the UK Bribery Act.
The Recruitment Division continues to make progress in a
difficult market with steady growth in permanent and direct
engagement revenues counteracting a fall in contract
recruitment.
This year the Group has started to invest in its development
resources in offices in London, Newbury and Pune as the business
moves forward, adding young graduate talent as part of an
initiative to unlock innovation from the knowledge base of the
business.
Outlook
Orders closed in the first half of the financial year, together
with continued robust recurring revenues and professional services
order backlog, gives us good visibility and confidence in the
achievement of management expectations for the full year despite
the current Eurozone and potentially wider economic turmoil.
We will continue to work in close partnership with UK Local
Government, which strives to find new and innovative cost effective
ways of improving services through shared, hosted services and
collaboration with organisations such as IDOX which provide the
skills and capability to achieve this.
Our revenues are becoming increasingly diversified across both
vertical markets and geographically through our Engineering
Information Management business. We continue to diversify beyond
our core oil & gas markets into global asset intensive markets
such as utilities, construction and nuclear where we have recently
won a small but significant contract in China.
As the Group's strategic direction progresses through
acquisition, organic growth and international expansion, we expect
to report a more even blend of revenue mix across the divisions,
reducing reliance upon the public sector.
Financial review
Revenues and operating profits in the first half of the
financial year were substantially ahead of 2011 as a combination of
organic growth and acquisitions helped deliver a 58% growth in
revenues to GBP28.6m (H1 2011: GBP18.1m) and a 54% increase in
adjusted pre-tax profits (which exclude amortisation, share option
costs and exceptional restructuring and corporate finance costs) to
GBP7.3m (H1 2011: GBP4.7m).
The Public Sector Software division delivered an increase in
revenues of 16% to GBP14.6m (H1 2011: GBP12.6m) with 3% organic
revenue growth after stripping out the impact of the LalPac and
Opt2Vote acquisitions. Revenue from new software and services sales
to local government was encouraging, showing an increase of 17% and
the pipeline of managed service and hosted opportunities continues
to grow. Elections management company Opt2Vote, which was acquired
in March 2012, delivered revenues of GBP1.2m as election activity
and therefore revenue recognition is concentrated around the
election cycle. Recurring revenues on a like-for-like basis
accounted for 65% of revenues (H1 2011: 65%).
The EIM Division which in 2011 comprised McLaren Software was
enlarged through the acquisition of CTSpace in November 2011 and
delivered revenues of GBP8.9m (H1 2011: GBP1.5m), 31% of total
Group revenues of which 46% were recurring (H1 2011: 45%). On an
organic basis McLaren Software's revenues more than doubled to
GBP3.7m, aided by the significant contract win with Oxy Inc. The
integration of CTSpace is now complete and cost synergies with
McLaren Software realised enabling the EIM Division to deliver a
29% EBITDA contribution of GBP2.6m (H1 2011: GBP0.1m).
The Information Solutions Division increased revenues by 44% to
GBP3.6m (H1 2011: GBP2.5m), reflecting the positive impact of the
Interactive Dialogues acquisition in November 2011.
Subscription-based recurring revenues from the grants and policy
information business now account for 69% (H1 2011: 67%) of
divisional revenue on a like-for-like basis. The business delivered
EBITDA of GBP0.6m (H1 2011: GBP0.4m), a 61% increase.
Gross margins in the Recruitment Division increased by 18% to
GBP0.8m (H1 2011: GBP0.7m), reflecting the improved mix of higher
margin permanent recruitment business despite a slight decline in
top line revenues to GBP1.4m (H1 2011: GBP1.5m).
Gross margins at the Group level improved from 86% to 88%,
reflecting the shift in mix across all divisions toward
higher-margin recurring revenues, aided by the acquisitions.
Operating costs increased to GBP17.0m (H1 2011: GBP10.4m) as a
result of acquisitions made over the past year. On a like-for-like
basis, excluding acquisitions, operating costs rose by 7%
reflecting investment in software development innovation and sales
investment in growth areas such as Australia.
EBITDA increased by 58% to GBP8.2m at a margin of 29% (H1 2011:
GBP5.2m, 29%) that reflected the strong revenue growth, increasing
gross margins and swift realisation of acquisition synergies.
Net financing costs increased to GBP0.6m (H1 2011: GBP0.2m) as a
result of an increase in acquisition financing facilities.
Reported pre-tax profits were GBP3.5m (H1 2011: GBP2.0m) after
an intangible amortisation charge of GBP2.3m (H1 2011: GBP1.8m)
related to acquisitions coupled with a share option charge of
GBP0.3m (H1 2011: GBP0.5m) and exceptional costs of GBP1.2m (H1
2011: GBP0.4m) related to transactional acquisition costs (GBP0.9m)
and acquisition restructuring charges (GBP0.3m).
Adjusted earnings per share increased by 56% to 1.58p (H1 2011:
1.01p). Basic earnings per share were 0.69p (H1 2011: 0.41p).
The Board continues to pursue a progressive dividend policy
whilst ensuring the balance sheet remains robust to take advantage
of future acquisition opportunities. The interim dividend has been
increased by 15% to 0.275p (interim 2011: 0.24p). It will be paid
on 22 August 2012 to shareholders on the register at 10 August
2012.
The recent acquisitions have been funded from new debt
facilities provided by the Group's existing bankers, Lloyds Banking
Group. A term loan of GBP12m together with a revolving credit
facility of GBP10m and a flexible acquisition facility of a further
GBP10m have been agreed. At 30 April 2012 there was a total
drawdown of GBP23.7m against these facilities. Cash balances at the
end of April were GBP11.6m resulting in a net debt position of
GBP12.1m.
Since 30 April 2012, a payment of GBP3.5m has been made to
acquire Currency Connect, a Dutch- based grants advisory business
which will expand our current grants information service.
Consolidated Interim Statement of Comprehensive Income
For the six months ended 30 April 2012
6 months 6 months 12 months
to to to
30 April 30 April 31 October
12 11 11
(unaudited) (unaudited) (audited)
Note GBP000 GBP000 GBP000
Revenue 3 28,556 18,108 38,605
External charges (3,420) (2,547) (5,157)
------------- ------------- ------------
Gross margin 25,136 15,561 33,448
Staff costs (13,521) (8,339) (17,400)
Other operating charges (3,454) (2,056) (4,487)
------------- ------------- ------------
Earnings before amortisation,
depreciation, restructuring,
corporate finance and share
option costs 8,161 5,166 11,561
Depreciation (337) (223) (499)
Amortisation (2,297) (1,823) (3,738)
Restructuring costs (318) (185) (211)
Corporate finance costs (896) (197) (281)
Share option costs (268) (535) (1,064)
------------- ------------- ------------
Operating profit 4,045 2,203 5,768
Finance income 12 68 247
Finance costs (583) (300) (401)
Profit before taxation 3,474 1,971 5,614
Income tax expense 4 (1,089) (575) (1,089)
------------- ------------- ------------
Profit for the period 2,385 1,396 4,525
Other comprehensive income
for the period net of tax (27) 101 6
------------- ------------- ------------
Total comprehensive income
for the period attributable
to owners of the parent 2,358 1,497 4,531
============= ============= ============
Earnings per share
Basic 5 0.69p 0.41p 1.31p
Diluted 5 0.66p 0.39p 1.28p
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Balance Sheet
At 30 April 2012
At At At
30 April 30 April 11 31 October
12 11
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 673 403 601
Intangible assets 65,017 47,149 48,611
Other long-term financial
assets - 70 -
Deferred tax assets 337 539 495
------------- ------------- ------------
Total non-current assets 66,027 48,161 49,707
Trade and other receivables 21,629 13,159 8,843
Cash at bank 11,628 4,060 -
------------- ------------- ------------
Total current assets 33,257 17,219 8,843
------------- ------------- ------------
Total assets 99,284 65,380 58,550
------------- ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 4,276 3,363 2,304
Other liabilities 27,957 23,499 13,315
Provisions 72 133 117
Current tax 1,487 1,349 975
Derivative financial instruments 35 - -
Borrowings 2,300 - 2,408
------------- ------------- ------------
Total current liabilities 36,127 28,344 19,119
Non-current liabilities
Deferred tax liabilities 6,257 4,979 5,060
Borrowings 21,400 - -
------------- ------------- ------------
Total non-current liabilities 27,657 4,979 5,060
------------- ------------- ------------
Total liabilities 63,784 33,323 24,179
------------- ------------- ------------
Net assets 35,500 32,057 34,371
============= ============= ============
EQUITY
Called up share capital 3,463 3,442 3,463
Capital redemption reserve 1,112 1,112 1,112
Share premium account 10,017 9,903 10,017
Treasury reserve (107) (154) (204)
Shares options reserve 1,556 961 1,366
Merger reserve 1,294 1,294 1,294
ESOP trust (92) (91) (93)
Foreign currency translation
reserve 14 - 41
Retained earnings 18,243 15,590 17,375
------------- ------------- ------------
Total equity 35,500 32,057 34,371
============= ============= ============
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Statement of Changes in Equity
Called Capital Share Treasury Share Merger ESOP Foreign Retained Total
up redemption premium reserve options reserve trust currency earnings
share reserve account reserve retranslation
capital reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
GBP000
Balance at 1
November 2010
(audited) 3,442 1,112 9,903 (455) 630 1,294 (93) - 15,179 31,012
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Share options
granted - - - - 466 - - - 118 584
Share of Treasury
sales - - - 519 - - - - - 519
Purchase of
Treasury shares - - - (218) - - - - - (218)
Transfer on
exercise of share
options - - - - (135) - - - - (135)
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
Available-for-sale
financial
assets - transfer
to profit
for period - - - - - - - - 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
======== =========== ======== ========= ======== ======== ======= ============== ========= ========
Issue of share
capital 21 - 114 - - - - - - 135
Transfer on
exercise of share
options - - - - (123) - - - 243 120
Sale of Treasury
shares - - - 453 - - - - (501) (48)
Share options
granted - - - - 528 - - - (118) 410
Purchase of
Treasury shares - - - (503) - - - - - (503)
Equity dividends
paid - - - - - - - - (832) (832)
ESOP trust - - - - - - (2) - (2)
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Transactions with
owners 21 - 114 (50) 405 - (2) - (1,208) (720)
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Profit for the
period - - - - - - - - 3,129 3,129
Other comprehensive
income
Exchange gains on
retranslation
of foreign
operations - - - - - - - 41 (78) (37)
Available-for-sale
financial
assets - transfer
to profit
for period - - - - - - - - (58) (58)
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Total comprehensive
income for
the period - - - - - - - 41 2,993 3,034
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Balance at 31
October 2011
(audited) 3,463 1,112 10,017 (204) 1,366 1,294 (93) 41 17,375 34,371
======== =========== ======== ========= ======== ======== ======= ============== ========= ========
Called Capital Share Treasury Share Merger ESOP Foreign Retained Total
up redemption premium reserve options reserve trust currency earnings
share reserve account reserve retranslation
capital reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
GBP000
Share options
granted - - - - 227 - - - - 227
Purchase of
Treasury
shares - - - (37) - - - - - (37)
Transfer on
exercise of
share
options - - - - (37) - - - (272) (309)
Sale of
Treasury
sales - - - 134 - - - - - 134
Equity
dividends
paid - - - - - - - - (1,245) (1,245)
ESOP trust - - - - - - 1 - - 1
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Transactions
with owners - - - 97 190 - 1 - (1,517) (1,229)
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Profit for the
period - - - - - - - - 2,385 2,385
Other
comprehensive -
income
Gain on
investment - - - - - - - - -
Exchange
differences
in reserves - - - - - - - (27) - (27)
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
Total
comprehensive
income for
the period - - - - - - - (27) 2,385 2,358
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
At 30 April
2012
(unaudited) 3,463 1,112 10,017 (107) 1,556 1,294 (92) 14 18,243 35,500
-------- ----------- -------- --------- -------- -------- ------- -------------- --------- --------
The accompanying notes form an integral part of these financial
statements.
Consolidated Interim Statement of Cash Flows
For the six months ended 30 April 2012
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2012 (unaudited) 2011 (unaudited) 2011 (audited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period before taxation 3,474 1,971 5,614
Adjustments for:
Depreciation 337 223 499
Amortisation 2,297 1,827 3,738
Finance income (12) (2) (247)
Finance costs 456 109 146
Debt issue costs amortisation 57 134 134
Exchange gain (27) (54) (5)
Share option costs 228 535 994
Movement in receivables (8,492) (6,712) (2,050)
Movement in payables 10,907 9,524 (1,371)
------------------ ------------------ ----------------
Cash generated by operations 9,225 7,555 7,452
Tax on profit paid (903) (835) (2,132)
Net cash from operating activities 8,322 6,720 5,320
Cash flows from investing activities
Acquisition of subsidiaries net
of cash acquired (15,022) (1,000) (4,263)
Sale of available-for-sale financial
assets - 964 1,038
Purchase of property, plant &
equipment (200) (195) (568)
Purchase of intangible assets (495) (384) (668)
Finance income 12 2 29
Net cash used in investing activities (15,705) (613) (4,432)
Cash flows from financing activities
Interest paid (348) (110) (134)
New loans 23,700 - -
Loan related costs (475) - -
Loan repayments - (3,000) (3,000)
Equity dividends paid (1,245) (1,204) (2,036)
(Purchase)/sale of own shares (213) 263 (130)
------------------ ------------------ ----------------
Net cash flows from/(used in)
financing activities 21,419 (4,051) (5,300)
------------------ ------------------ ----------------
Net movement on cash and cash
equivalents 14,036 2,056 (4,412)
Cash and cash equivalents at the
beginning of the period (2,408) 2,004 2,004
Cash and cash equivalents at the
end of the period 11,628 4,060 (2,408)
================== ================== ================
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 2012
1. GENERAL INFORMATION
IDOX plc is a supplier of specialist document management
collaboration solutions and services to the UK public sector and
increasingly to highly regulated asset intensive industries around
the world in the wider corporate sector. 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 Chancery Exchange,10 Furnival Street,
London, EC4A 1AB. The registered number of the company is
03984070.
2. BASIS OF PREPARATION
The financial information for the period ended 30 April 2012 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 2011
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 2012. The Group financial statements for the year ended 31
October 2011 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
In previous periods, the Group was organised into three main
business segments. Following the acquisition and integration of
McLaren Software Group and CT Space Group, the Group now includes
an Engineering Software segment. As at 30 April 2012, the Group is
primarily organised into four main business segments, which are
detailed below. Segmental analysis for the comparative period to 30
April 2011 has been restated to show results for all four business
segments.
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.
-- Public Sector Software - delivering software and service
solutions to mainly local government customers across a broad range
of departments
-- Engineering Software - delivering engineering document
management and control solutions to asset intensive industry
sectors
-- 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 corporate finance costs. 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 2012 are as
follows:
UK Europe US & Canada Australia Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenues from
external customers 19,654 2,534 5,825 543 28,556
-------- -------- ------------ ---------- --------
Public
Sector Engineering Information
Software Software Solutions Recruitment Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenues from external
customers 14,603 8,934 3,599 1,420 28,556
Cost of sales (1,907) (544) (321) (648) (3,420)
---------- ------------- ------------- ------------- ---------
Gross profit 12,696 8,390 3,278 772 25,136
Operating costs (7,826) (5,826) (2,639) (684) (16,975)
---------- ------------- ------------- ------------- ---------
Profit before interest,
tax, depreciation, amortisation,
share option and restructuring
costs 4,870 2,564 639 88 8,161
---------- ------------- ------------- ------------- ---------
Depreciation (161) (121) (51) (4) (337)
Amortisation (1,462) (494) (337) (4) (2,297)
Share options costs (209) (30) (17) (12) (268)
Restructuring (111) (35) (172) - (318)
Profit before interest
and tax 2,927 1,884 62 68 4,941
Interest receivable - 1 3 - 4
---------- ------------- ------------- ------------- ---------
Segment profit (see reconciliation
below) 2,927 1,885 65 68 4,945
========== ============= ============= ============= =========
The segment results for the 6 months to 30 April 2011 (restated)
are as follows:
UK Europe US Australia Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenues from
external customers 16,522 284 622 680 18,108
-------- -------- -------- ---------- --------
Public
Sector Engineering Information
Software Software Solutions Recruitment Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenues from external
customers 12,589 1,517 2,515 1,487 18,108
Cost of sales (1,478) (83) (154) (832) (2,547)
---------- ------------- ------------- ------------- ---------
Gross profit 11,111 1,434 2,361 655 15,561
Operating costs (6,674) (1,285) (1,965) (471) (10,395)
---------- ------------- ------------- ------------- ---------
Profit before interest,
tax, depreciation, amortisation,
share option and restructuring
costs 4,437 149 396 184 5,166
---------- ------------- ------------- ------------- ---------
Depreciation (167) (7) (46) (3) (223)
Amortisation (1,226) (231) (362) (4) (1,823)
Share options costs (461) (38) (22) (14) (535)
Restructuring - (185) - - (185)
Profit before interest
and tax 2,583 (312) (34) 163 2,400
Interest receivable 1 - 2 - 3
---------- ------------- ------------- ------------- ---------
Segment profit (see reconciliation
below) 2,584 (312) (32) 163 2,403
========== ============= ============= ============= =========
Reconciliations of reportable profit:
6 months 6 months
to to
30 April 30 April
2012 (unaudited) 2011 (unaudited)
GBP000 GBP000
Total profit for reportable segments 4,945 2,403
Corporate finance
costs (896) (197)
Other financial
costs (575) (235)
---------------- ------------------
Profit before
taxation 3,474 1,971
================ ==================
Other financial costs relate to bank interest, exchange
differences and bank facility fee amortisation, which have not been
included in reportable segments. Amortisation arising on IFRS
intangible assets has been allocated to business segments in 2012
and the 2011 comparatives have been restated.
4. TAX ON PROFIT ON ORDINARY ACTIVITIES
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2012 (unaudited) 2011 (unaudited) 2011
GBP000 GBP000 (audited)
GBP000
Current tax
Corporation tax on profits for
the period 1,602 1,132 2,046
Foreign tax on overseas companies - - 8
Under provision in respect of
prior periods 2 - 3
---------------- ------------------- -------------
Total current tax 1,604 1,132 2,057
---------------- ------------------- -------------
Deferred tax
Origination and reversal of
timing differences (239) (557) (715)
Amortisation of intangibles
difference in tax rate (275) - (120)
Adjustments in respect of prior
periods (1) - (133)
---------------- ------------------- -------------
Total deferred tax (515) (557) (968)
---------------- ------------------- -------------
Total tax charge 1,089 575 1,089
---------------- ------------------- -------------
Unrecognised trading losses of GBP6,061,000 (30 April 2011:
GBP8,938,000), which when calculated at the standard rate of
corporation tax in the United Kingdom of 24%, amounts to
GBP1,455,000 (30 April 2011: GBP2,324,000). These remain available
to offset against future taxable trading profits. Unrecognised
capital losses of GBP4,210,000 (30 April 2011: GBP4,210,000) remain
available to offset against future capital profits. These deferred
tax assets are not recognised as they are considered to have fair
value of GBPnil.
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 6 months 12 months
to to to
30 April 30 April 31 October
12 11 11
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit for the period 2,385 1,396 4,525
Basic earnings per share
Weighted average number of shares
in issue 345,262,291 343,332,330 344,267,741
Basic earnings per share 0.69p 0.41p 1.31p
--------------- --------------- --------------
Diluted earnings per share
Weighted average number of shares
in issue used in basic earnings
per share calculation 345,262,291 343,332,330 344,267,741
Dilutive share options 16,437,508 11,941,507 9,096,287
--------------- --------------- --------------
Weighted average number of shares
in issue used in dilutive earnings
per share calculation 361,699,799 355,273,837 353,364,028
Diluted earnings per share 0.66p 0.39p 1.28p
--------------- --------------- --------------
Normalised earnings
per share
6 months 6 months 12 months
to to to
30 April 30 April 31 October
12 11 11
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit for the period 2,385 1,396 4,525
Adjusting items:
Share option costs 268 535 1,064
Restructuring costs 318 185 211
Amortisation 2,297 1,823 3,738
Corporate finance costs 896 197 281
Taxation on above items (692) (664) (1,303)
------------------- --------------- -----------------
Adjusted profit for the period 5,472 3,472 8,516
------------------- --------------- -----------------
Normalised basic earnings per
share 1.58p 1.01p 2.47p
Normalised diluted earnings
per share 1.51p 0.98p 2.41p
6. DIVIDENDS
During the period a dividend was paid in respect of the year
ended 31 October 2011 of 0.36p per Ordinary share at a total cost
of GBP1,245,000 (2010: 0.35p, GBP1,204,000).
A dividend of 0.275p per ordinary share at a total cost of
GBP952,000 has been proposed in respect of the interim period ended
30 April 2012 (2011: 0.24p, GBP823,000).
7. ACQUISITIONS
Interactive Dialogues Limited
On 7 November 2011, the Group acquired Interactive Dialogues
Limited and Interactive Dialogues NV ("ID") for a total
consideration of EUR2.2m (GBP1.9m) in cash. ID is a leading
supplier of e-learning and information solutions in Europe enabling
organisations to conduct 'dialogues' with employees, customers and
suppliers to achieve legislative compliance in areas such as
Competition Law and the UK Bribery Act. The acquisition of ID
extends the range of solutions available within the Idox
Information Solutions business and provides Idox with an e-learning
platform that will be used to support customers across the
Group.
An initial payment of EUR2m has been made on completion and a
further EUR0.2m is payable one year after completion subject to the
fulfilment of certain conditions. ID had revenues of EUR2.4m for
the year ended 31 May 2011.
Goodwill arising on the acquisition of ID has been capitalised
and consists largely of the workforce value, synergies and
economies of scale expected from combining the operations of ID
with Idox. None of the goodwill recognised is expected to be
deductible for income tax purposes. The purchase of ID has been
accounted for using the acquisition method of accounting.
Provisional
fair value
Book value adjustments Fair value
GBP000 GBP000 GBP000
Intangible assets 8 935 943
Property, plant and equipment 17 - 17
Trade receivables 349 - 349
Other receivables 283 - 283
Cash at bank 199 - 199
------------ ------------- ------------
TOTAL ASSETS 856 935 1,791
Trade payables (59) - (59)
Other creditors (263) - (263)
Accruals (179) - (179)
Deferred tax liability - (224) (224)
------------ -------------
TOTAL LIABILITIES (501) (224) (725)
------------ -------------
NET ASSETS 1,066
Purchased goodwill capitalised 850
------------
Total consideration 1,916
------------
Satisfied by:
Cash to vendor 1,742
Earn out consideration 174
------
Total consideration 1,916
------
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.
The revenue included in the consolidated interim statement of
comprehensive income since 7 November 2011, contributed by ID was
GBP1,372k . ID also contributed a profit after tax of GBP367k for
the same period. If ID had been included from 1 November, it would
have contributed revenue of GBP1,372k and a profit after tax of
GBP342k.
Acquisition costs of GBP82k have been written off in the
consolidated interim statement of comprehensive income.
CTSpace
On 15 November 2011, the Group acquired CTSpace, an engineering
and construction sector document management and control business,
for GBP11.6m in cash from Sword Group.
CTSpace provides document management and collaboration workflow
applications for the global construction and engineering industry
and will complement the McLaren Software business that IDOX
acquired in December 2010. CTSpace provides both Software as a
Service ('SaaS') and on-premise enterprise solutions, the latter of
which leverage an organisation's existing investment in leading
enterprise content management ('ECM') platforms such as IBM
FileNet(R), EMC Documentum(R) or Microsoft SharePoint(R). When
deployed with leading enterprise content management platforms,
CTSpace's products provide an integrated, best practice environment
that supports a project's entire lifecycle.
Goodwill arising on the acquisition of CTSpace has been
capitalised and consists largely of the workforce value, synergies
and economies of scale expected from combining the operations of
CTSpace with Idox. None of the goodwill recognised is expected to
be deductible for income tax purposes. The purchase of CTSpace has
been accounted for using the acquisition method of accounting.
Provisional
fair value
Book value adjustments Fair value
GBP000 GBP000 GBP000
Intangible assets 6,065 (894) 5,171
Property, plant and equipment 360 (212) 148
Trade receivables 2,390 (112) 2,278
Other receivables 758 (24) 734
Corporation tax 590 - 590
Cash at bank 239 - 239
------------ ------------- ------------
TOTAL ASSETS 10,402 (1,242) 9,160
Trade payables (350) 4 (346)
Deferred revenue (2,768) - (2,768)
Other creditors (587) (16) (603)
Corporation tax (502) - (502)
Deferred tax liability - (1,202) (1,202)
------------ -------------
TOTAL LIABILITIES (4,207) (1,214) (5,421)
------------ -------------
NET ASSETS 3,739
Purchased goodwill capitalised 7,848
------------
Total consideration satisfied by
cash to vendor 11,587
------------
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. Other
adjustments relate to depreciation, bad debt provision and accrued
income to bring these in line with Idox Group policies.
The fair value of trade debtors is equal to the gross
contractual amounts receivable. All debts have been reviewed and
are considered recoverable.
The revenue included in the consolidated interim statement of
comprehensive income since 15 November 2011, contributed by CTSpace
was GBP5,216k. CTSpace also contributed a profit after tax of
GBP540k for the same period. If CTSpace had been included from 1
November, it would have contributed revenue of GBP5,617k and a
profit after tax of GBP407k.
Acquisition costs of GBP488k have been written off in the
consolidated interim statement of comprehensive income.
Opt2Vote
On 27 March 2012, the Group acquired Opt2Vote Ltd, one of the
UK's leading providers of electoral managed services and innovative
democracy solutions, for a maximum cash consideration of
GBP3.5m.
Opt2Vote provides expertise and knowledge across all areas of
election management and specialises in the provision of managed
services solutions and innovation in areas such as e-Counting and
Early Voting. Opt2Vote supplies electronic vote counting solutions
to the 32 Scottish local authorities as well as managed print
services to UK councils. It is based in Londonderry, Northern
Ireland. Opt2Vote products and services will complement solutions
provided by Strand Electoral Software, acquired by IDOX in 2010 and
will enable the Group to deliver a comprehensive range of
democratic solutions and managed services.
Goodwill arising on the acquisition of Opt2Vote has been
capitalised and consists largely of the workforce value, synergies
and economies of scale expected from combining the operations of
Opt2Vote with Idox. None of the goodwill recognised is expected to
be deductible for income tax purposes. The purchase of Opt2Vote has
been accounted for using the acquisition method of accounting.
Provisional
fair
Book value value adjustments Fair value
GBP000 GBP000 GBP000
Intangible assets - 1,857 1,857
Property, plant and equipment 44 - 44
Trade receivables 181 - 181
Corporation tax 103 - 103
Other receivables 51 - 51
Cash at bank 633 - 633
------------ ------------------- ------------
TOTAL ASSETS 1,012 1,857 2,869
Trade payables (81) - (81)
Other creditors (73) - (73)
Accruals (307) - (307)
Deferred tax liability - (446) (446)
TOTAL LIABILITIES (461) (446) (907)
------------ -------------------
NET ASSETS 1,962
Purchased goodwill capitalised 1,538
------------
Total consideration 3,500
------------
Satisfied by:
Cash to vendor 2,700
Deferred consideration 800
------
Total consideration 3,500
------
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.
The revenue included in the consolidated interim statement of
comprehensive income since 27 March 2012, contributed by Opt2Vote
was GBP1,228k . Opt2Vote also contributed a profit after tax of
GBP508k for the same period. If Opt2Vote had been included from 1
November, it would have contributed revenue of GBP1,737k and a
profit after tax of GBP163k.
Acquisition costs of GBP58k have been written off in the
consolidated interim statement of comprehensive income.
During the period a retention payment of GBP64,000 was made in
relation to the acquisition of Grantfinder Limited in May 2010.
8. POST BALANCE SHEET EVENTS
On 3 May 2012 the Group acquired Currency Connect Holdings BV
('Currency Connect'), a significant Dutch based grants advisory
business, for a maximum cash consideration of EUR4.7m
(GBP3.8m).
Currency Connect provides expertise and knowledge that helps
clients obtain funding for innovation projects through grant-based
subsidies and research & development tax credits. It monitors
and informs customers of innovation subsidies, prepares grant
applications and administers the end-to-end process. In addition,
Currency Connect provides grants management software and advises
clients on process change to enable them to accelerate their
innovation and consequent eligibility for related grants.
IDOX will pay an initial consideration of EUR4.3m (GBP3.5m),
with a further payment of EUR0.4m (GBP0.3m) in 2013 dependent on
the achievement of certain performance conditions. Currency Connect
reported revenue of EUR2.7m (GBP2.2m) and operating profit of
EUR1.1m (GBP0.9m) in the year ended 31 December 2011 and has
EUR0.3m (GBP0.25m) of cash. The acquisition will be funded from
IDOX's cash and existing debt facilities.
IDOX Information Solutions is already the leading grants
information provider in both the UK and the Netherlands. This
acquisition will extend the current offering, particularly in the
growing innovation funding space. Leveraging Currency Connect's
advanced processes, software and skills will accelerate the move
into providing a full grants consultancy service in the UK, the
Netherlands and other European Union countries such as Germany and
France, utilising IDOX's existing infrastructure.
Full IFRS(3) disclosure has not been included in the financial
statements due to the timing of the acquisition.
Independent Review Report to IDOX plc
For the six months ended 30 April 2012
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 2012 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,
operational review, outlook and financial review 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 2012
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
GRANT THORNTON UK LLP AUDITOR
London
26 June 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSBRGDLUGDBGDU
Idox (LSE:IDOX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Idox (LSE:IDOX)
Historical Stock Chart
From Oct 2023 to Oct 2024
