TIDMIDOX
RNS Number : 9131B
IDOX PLC
15 June 2021
15 June 2021
Idox plc
Half Year Results for the six months ended 30 April 2021
Strong performance and advancing strategy to focus on software
businesses
Idox plc (AIM: IDOX, "Idox", "the Company" or "the Group"), a
leading supplier of specialist information management software and
solutions to the public and asset intensive sectors, is pleased to
announce its unaudited half year results for the six months ended
30 April 2021 ("FY21 H1").
Financial highlights
Continuing operations (excluding disposed Idox Content
businesses) :
Revenue
-- Increased by 4% to GBP31.1m (FY20 H1: GBP30.0m);
-- Recurring revenues* decreased by 1% to GBP17.6m (FY20 H1: GBP17.8m), comprising:
o Growth of 1% in Public Sector Software ('PSS') to GBP14.5m, or
2% like-for-like growth when excluding the contribution from 6PM
Malta, exited in FY20 H1;
o A decline of 11% in Engineering Information Management ('EIM')
to GBP3.1m, due to on-going impact from Covid-19 pandemic on some
key asset-heavy sectors.
-- Orderbook for contracted non-recurring software and services
increased by 9% to GBP12.5m (FY20 H1: GBP11.5m)
Profit
-- Adjusted** EBITDA increased by 17% to GBP10.1m (FY20 H1: GBP8.7m).
-- Adjusted** EBITDA margin increased to 33% (FY20 H1: 29%).
-- Adjusted** Profit before tax increased by 45% to GBP6.4m (FY20 H1: GBP4.4m).
-- Adjusted** EPS increased by 98% to 1.13p (FY20 H1: 0.57p).
Cash
-- Net cash*** at 30 April 2021 of GBP7.6m (30 April 2020: net
debt GBP14.3m, 31 October 2020: net debt GBP16.1m), a significant
improvement following continued strong cash generation in the
period and net cash inflow of GBP10.7m from the disposal of our
Content business.
-- Net cash available at 30 April 2021 of GBP19.0m (FY20 H1: net
bank debt GBP2.6m) excluding the 6PM bond of GBP11.4m (FY20 H1:
GBP11.7m).
-- The Group has a bank revolving credit facility of GBP35m.
Total Operations (including disposed Idox Content
businesses):
-- Group revenue decreased by 0.3% to GBP35.0m (FY20 H1:
GBP35.1m) and Group Adjusted** EBITDA increased by 8% to GBP10.4m
(FY20 H1: GBP9.6m).
-- Group statutory profit before tax of GBP7.9m (FY20 H1: GBP0.3m).
Operational highlights
The first half of FY21 has seen continued strategic delivery
following the transformation across the Group over the previous two
financial years.
-- The disposal of our Content businesses in line with our
strategy to focus on pure software businesses.
-- Good progress with our sales and marketing initiatives,
directly increasing levels of customer engagement. We are seeing
improved revenues as a direct consequence of these efforts.
-- Ongoing improvements to margins through higher quality
revenues, improved operational efficiencies and corporate
simplification.
-- Continued progress on prospecting for acquisitions, with
active conversations with further potential targets.
-- High levels of colleague engagement with increased focus on
our collective environmental, social and governance projects.
-- Idox is now firmly in the 'Fly' phase of its 'Walk, Run, Fly' strategy.
Current trading and outlook:
-- Enter second half with good momentum and benefit of acquisition of Aligned Assets.
-- Well placed to continue organic growth and add complementary businesses to our portfolio.
-- Full year financial performance is expected to be slightly
ahead of management previous expectations.
David Meaden, Chief Executive of Idox said:
"We have made good progress as we pursue our strategy of
focussing on software businesses that deliver exceptional value to
customers and which engender long term patronage through their
excellence in managing challenging operational, legislative, and
regulatory issues.
"Operationally, the business continues to perform strongly
within our 'Four Pillars' framework, and we have encouraged a
culture of openness and leadership throughout our business. I am
particularly pleased with the progress from the investment in our
leadership groups, the changes in sales and marketing, and with the
many simplification programmes across our organisation. All of this
has helped deliver much improved quality of revenue, at higher
margins with strong cash generation.
"It has been a busy time with regards corporate activity, as we
completed two disposals and managed an approach for the Group that
ultimately did not proceed to a formal offer. We have also
continued our efforts in sourcing credible acquisitions and were
delighted to complete the acquisition of Aligned Assets in early
June.
The outlook for the business is promising as we continue to
build momentum and improving operational performance. We are now
focussed on our 'fly phase' which we believe will drive exceptional
value for customers, our people, and shareholders."
Notes
* Recurring revenue is defined as existing, contracted annuity
revenues that have a high expectation of renewal for a minimum of
twelve months.
** Where relevant, adjusted measures of profit have been used
alongside statutory definitions. The items that are added back to
statutory profit are: amortisation from acquired intangible assets,
impairment, restructuring costs, acquisition & financing costs
and share option costs. This is in line with management information
requested and presented to the decision makers in our business; and
is consistent with how the business is assessed by our providers of
capital. See note 11 for further details. There have been no
adjustments to any of our reporting metrics for any impact of the
Covid-19 pandemic.
*** Net cash / (debt) is defined as the aggregation of cash,
bank borrowings and long-term bond.
There will be a webcast at 9:30am UK time today for analysts and
investors. To register for the webcast please contact MHP
Communications on idox@mhpc.com .
For further information please contact:
Idox plc +44 (0) 870 333 7101
Chris Stone, Non-Executive Chairman
David Meaden, Chief Executive
Rob Grubb, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker) +44 (0) 20 7418 8900
Edward Knight
Paul Gillam
Nick Prowting
MHP Communications + 44 (0) 203 128 8170
Reg Hoare idox@mhpc.com
James Bavister
Amy O'Sullivan
About Idox plc
For more information see www.idoxplc.com and @Idoxgroup
CHAIRMAN'S STATEMENT
Introduction
It is a great pleasure to be able to present these strong
results. The first six months of this financial year have seen a
lot of activity in corporate matters, and the continuing
complications of managing through lockdown and social distancing,
but this has not distracted the management team from building on
the strong performance of FY20 and achieving a number of new highs
for the business.
At the headline level, reported Group revenues showed a slight
decline, as this included the performance of our Content businesses
for the full period in FY20 H1, but only 5 months in FY21 H1.
However, on a continuing basis, adjusting for this disposal, the
business grew by 4% in revenue, and 17% for adjusted EBITDA; our
main reporting measure. This is a really good performance and fed
through to a very strong period of cash generation. Cash balances
were helped by the proceeds of the two Idox Content division
disposals, which together generated initial net proceeds of
GBP10.7m, with more to come from deferred payments and vendor loan
notes. As result of both good trading and the disposals, we closed
out the period with a net cash balance of GBP7.6m, compared to a
net debt position of GBP14.3m at 30 April 2020.
Looking forward, continued growth in our order book gives us
confidence that this growth trend can be maintained. In particular,
we are seeing high levels of customer engagement in our Public
Sector business, and whilst our Oil and Gas focused EIM business
has been held back by the wider challenges in those markets, it is
encouraging to see that we have continued to add new clients in
that sector, demonstrating the attractiveness of our offer.
We will also be looking for further opportunities to grow our
business through smart acquisitions. The acquisition of the Tascomi
business in August 2019 has been successful for all stakeholders.
In early June 2021 we completed the acquisition of Aligned Assets,
an organisation we and our customers know well, bringing 24 new
employees and further well-respected products into the Group. We
hope to be able to complete additional similar acquisitions to
further supplement our organic growth and provide further offerings
to our customers that are complementary to our existing
products.
On the topic of corporate activity, and as was announced at the
time, we received an unexpected approach for the Group, which we
rejected until the proposed offer price was at a point where the
Board felt that, if this were to be confirmed, it was at a level
that shareholders would want to consider. Ultimately, the proposed
offer did not materialise, and I am pleased to note that the
inevitable workload associated with such an approach did not
distract our colleagues from the focus required to deliver the
excellent results described above.
As reported in previous statements, I am very proud of the way
in which all our colleagues at Idox have responded to working
within the constraints imposed by managing the Covid-19 pandemic.
We have not made any reduction in staff numbers or used any of the
government loan or furlough schemes. We did take advantage of the
VAT deferral programme in the early days of the pandemic, but we
are now repaying this deferral in line with HMRC's guidelines. We
have also started repaying some of our loan facilities, after
drawing them fully to ensure flexibility during the period of
uncertainty at the beginning. It is a huge compliment to all of our
staff that the business has performed so well during such an
unusual period.
Dividend
As previously announced, the Group paid a dividend of 0.3p in
April 2021 in respect of the year ending 31 October 2020. Our
current policy is to only declare a final dividend and therefore
there is no interim dividend in respect of FY21 H1 (FY20 H1: nil).
We will keep the level of future dividends under review.
Board
There have been no changes to the Board composition during this
period. We are satisfied with the composition of the Board but
continue to consider the need for additional skills and experiences
on an ongoing basis. The Board considers all three of its
Non-Executive directors independent.
Summary
The Group has made credible progress with its strategy on the
current period, building on the transformation achieved previously.
Idox is now a pure software group, and is well positioned to
progress further with the financial resources at its disposal.
Christopher Stone
Chairman
14 June 2021
CHIEF EXECUTIVE'S STATEMENT
Building momentum
I have written extensively on our transformation here at Idox,
based upon the three phases of 'Walk, Run, Fly' and our four
pillars of Revenue expansion, Margin enhancement, Simplification
and Communication. We have continued to build momentum and I am
pleased to report on another period of strong performance. During
the first six months of FY21 we have continued the process of
focussing on software businesses that deliver exceptional value to
customers and which engender long term patronage through their
excellence in managing challenging operational, legislative, and
regulatory issues. This focus on software has allowed the business
to be more cohesive, operate with more agility, improve outcomes
for customers, improve engagement across our teams and in turn,
deliver value for shareholders.
With our focus on software and organisational simplification, we
have sold the two businesses that formed the Idox Content Division.
The Compliance business based in Germany was sold for a
consideration of GBP9.0m and the Consulting business based in the
Netherlands was sold for an initial consideration of GBP3.6m. This
means that Idox is now exclusively a software business focussed on
key niche areas that have good organic growth prospects.
We are in a strong financial position to add further customers,
technology and recurring income through carefully selected M&A,
further extending Idox's position in markets where it is noted for
its expertise and insight.
I am pleased to report we acquired Aligned Assets in early June
2021 which, like Tascomi in August 2019, is a well-respected
provider of software solutions to local authorities that complement
the existing Idox product portfolio. We are excited about the
addition of new colleagues, technology and customers to our Group
as part of this acquisition and are optimistic the combination will
drive strong growth in both organisations.
Strong progress
During this reporting period we have seen growth in Group
revenues for our continuing operations of 4%, with accompanying
adjusted EBITDA improving by 17% from GBP8.7m to GBP10.1m.
Following strong cash generation, alongside the GBP10.7m net cash
inflow from the business disposals, we moved from a net debt
position this time last year of GBP14.3m to a net cash position of
GBP7.6m.
The focus has now shifted into our 'fly phase' and given our
sure footing we are well placed for growth in our software
operations and have established a strong position from which to add
sensible bolt on acquisitions to our portfolio of offerings.
The 'Four Pillars' programme
Revenue expansion
Despite the continuing and ongoing effects of the pandemic our
core business areas performed well. Naturally some parts of our
business have seen slower demand during the course of the pandemic,
but performance overall has been bolstered by the transformational
activities we have undertaken that have led to better sales
execution and improved integration across the Group, which in turn
have improved margins and bottom-line performance.
Order intake across the Group for the six months ended 30 April
2021 continued to grow, helping to support the in-year revenue
growth and build the future orderbook. In the period we secured
over GBP35m of total contract value with new business and new
product sales, increasing by 10% over the same period last
year.
Sales in local government continued to rise, up 32% on the same
period for new business and incremental customer sales. New wins in
FY21 H1 included Coventry City Council and Warrington Borough
Council, along with the Government of Bermuda choosing to implement
the Idox Cloud Solution for Building Control on the Island. The
Idox Cloud business has seen good growth in FY21 H1 as planned,
with revenues up 27%, with the growth in recurring revenue up 49%
on the same period last year.
In CAFM ('Computer Aided Facility Management' for properties) we
saw the industry struggle with the impacts of Covid-19, albeit with
some green shoots of recovery evident in the new business area.
Sales from new customers were up over 90% on the same period last
year, helping to balance some lower spend seen from within the
existing customer base.
In Elections, a strong performance in the local elections helped
compensate for the higher revenues generated by the general
elections in the comparable half year period, with revenues down
just 6% when compared to the same period in FY20.
Health revenues increased 8% on the comparable period with
increased recurring revenue. This excludes the impact of exiting
6PM Ireland and Malta in FY20 H1, and delivery of the carried
forward order book. Sales orders were down slightly as clients
continued to focus their efforts on managing the Covid-19 pandemic
however we have seen that easing towards the end of the period.
In FY21 H1 Idox launched major updates to the existing Grant
database solutions Grantfinder and ResearchConnect, incorporating a
vastly improved new user interface and search capabilities. In
addition to the launch of the updated solution, Idox also launched
a new product to the Grants market: 'My Funding Central'. Our key
aim is to provide a service to the 10,000 previous subscribers of
the National Council Voluntary Organisation (NCVO) funding portal
following the NCVO withdrawal of this service. My Funding Central
is aimed at organisations with an income of less than GBP1m and
Idox has made this service free to access for Charities and
organisations with an annual income less than GBP30,000.
Sales order intake in EIM ('Engineering Information Management')
was up as the market recovered from the early impacts of the
pandemic last year, in both new business sales and sales of new
product and service to existing customers. New business sales were
supported by a significant new FusionLive sale to Ebla Computer
Consultancy which will be used to help the management of the
expansion of Doha Airport.
Margin enhancement
During the period we have driven the consolidation of all
software business units into a single Idox Software structure,
sharing resources across software development, professional
services and support services enabling better use of Group
resources and operational scale across our full range of software
offerings.
Development teams have been successfully restructured, our
technology footprints have been consolidated where possible and we
have improved resource sharing across our teams. Cost savings and
efficiencies driven through data centre consolidation and greater
sharing of skills and capabilities across the software and
professional services teams continued to take effect.
As highlighted earlier, the sale of the Idox Content businesses,
both of which operated at margins below the Group average, allows
for greater management focus on our software operations and related
services moving forward.
Simplification
Stratification of the sales organisation continues to bring
better customer engagement. The internal sales desk has been
extended to cover all software products and now includes a revenue
assurance function, focussed on customer retention and improving
the renewal processes.
Our CRM implementation continues to support better customer
engagement and is providing improved insights and pipeline
visibility. The CRM now provides timely visibility of the actions
needed to secure every new business or renewal opportunity.
The integration of the professional services teams and
implementation of Idox best practice has improved revenue and
utilisation forecasting. This has resulted in a 5% improvement in
utilisation averages when compared to the same period in FY20,
along with better controls and greater clarity on future revenues
through achievement of milestones. Further projects in this area
aim to reduce the implementation timelines for Idox Cloud based
solutions, providing customers with access to automated data
conversion processes, speeding up the return on their
investment.
The consolidation of the software business units across Idox has
allowed significant simplification of company legal structures and
our associated accounting management system. As a result of these
consolidation activities and the disposal of Idox Content, the Idox
Group now has a single UK trading entity and single UK accounting
management system.
Communication
We have seen a substantial improvement in the engagement of our
people with the business, its values and strategy. Having focussed
heavily on communicating the Group's strategy and long-term plan we
have improved trust and engagement with our teams. This has been
highly significant, particularly during a period of lockdown and
has been valued by everyone.
We continue to provide regular updates through our CEO
broadcasts where various members of the management team participate
to provide a broad range of insights and inputs to the sessions.
Our people across the business are highly engaged providing the
management team with questions on various parts of the business
including performance, market updates and Covid-19 related
matters.
Since the pandemic began, I personally conduct final
conversations with all prospective new team members to outline how
we operate and work at Idox, what they can expect from us and we in
turn from them. This way our ambitions for the business and the
opportunity for individuals to have meaningful careers in a unique
company can be fully aligned from the outset.
During the period, people from across our teams have continued
to drive a co-ordinated program of workplace wellbeing initiatives
providing support, communications, and encouragement across the
business to all colleagues.
The introduction of the Idox Voice initiative provides all
colleagues with a platform to raise ideas or suggestions to help
improve Idox culture. Regular virtual Q&A sessions have been
taking place through Microsoft Teams, providing a real time
platform where individuals can get advice, ask questions and take
part in themed discussions.
Responsible Idox
Conducting business responsibly is core to Idox's business model
and long-term strategic goals. The Board recognises the importance
of our environmental and societal responsibilities in defining and
growing the value of our services and solutions, and building
lasting commercial relationships across the industries and
communities in which we operate. A structured approach to ESG
issues that supports the UN Sustainable Development Goals is
therefore a strategic imperative to maintain relevance and
resilience in our addressable markets in the long-term.
Idox Group recognises the importance of environmental protection
and is committed to operating its business responsibly by operating
an Environmental Management System accredited to BS EN ISO
14001:2015, participating in the Energy Saving Opportunities Scheme
('ESOS'), and meeting the requirements of the Streamlined Energy
and Carbon Reporting ('SECR') regulations. We remain committed to
our current Scope 1,2 and 3 emissions disclosures and will look to
progressing towards reporting this within the Task Force on
Climate-related Financial Disclosures ('TCFD') framework.
In FY21 we formed an ESG steering committee, with the core
responsibility of understanding and monitoring how our business
practices are sustainable in environmental and social terms, as
well as being well governed. The committee, which is attended by
members of the Executive Management team, will consult with the key
internal and external stakeholders of Idox to understand which
issues are most material. This will form the cornerstone of our
sustainability framework that is aligned with our strategic goals,
and set ESG performance metrics and targets that will ensure we can
monitor, manage and report on our performance consistently.
Covid-19 Pandemic
The Group continues to regularly assess the impact of the
Covid-19 pandemic on its immediate trading and longer-term
prospects. The assessments performed and disclosed in our FY20
reporting remain valid. Additionally, Idox has not needed to
participate in any government job retention schemes.
The Group continues to manage carefully the exposures
identified, and support our health, local authority, and private
sector customers to deal with the ongoing impacts arising from the
Covid-19 pandemic.
Outlook
We continue to make excellent progress and our strategy remains
unchanged. We remain clear in our view that a cloud-first approach
across each of our business areas is a strategic necessity and we
will continue to invest selectively to grow our capabilities and
extend our reach in the key software markets in which we have
developed strong patronage. The business has a strong foundation in
property and asset-based solutions and this, along with our focus
on a broader SaaS provision, will continue to underpin our future
strategy and accelerate our growth.
With strong cash generation, the proceeds from the sale of the
Content division and good long-term banking facilities, we are well
placed to continue delivering against our organic growth targets
and to add to our portfolio of offerings where assets are
identified complementary to our core operations. Overall, our
current full year financial performance is expected to be slightly
ahead of management previous expectations reflecting our strong
order book and recurring revenue.
We continue to build momentum across the Group, improving
operational performance and we are now focussed on our 'fly phase'
which we believe will drive exceptional value for customers, our
people, and shareholders.
David Meaden
Chief Executive
14 June 2021
CHIEF FINANCIAL OFFICER'S STATEMENT
Financial review
The first half of FY21 has continued the trend since early FY19
of improved revenue, earnings and cash results. Our commitment to
improving performance within our 'Four Pillars' framework is
leading to higher quality revenues, and our focus on allocating our
capital to strategic priorities has seen us exit our Idox Content
businesses and establish strong financial resources to continue
investing in our Idox Software portfolio.
Within our reporting, where relevant, adjusted measures of
profit have been used alongside statutory definitions. The items
that are added back to statutory profit are: amortisation from
acquired intangible assets, impairment, restructuring costs,
acquisition & financing costs and share option costs. This is
in line with management information requested and presented to the
decision makers in our business; and is consistent with how the
business is assessed by our providers of capital. See note 11 for
further details. There have been no adjustments to any of our
reporting metrics for any impact of the Covid-19 pandemic.
The following table sets out the Revenue and Adjusted EBITDA for
each of the Group's segments.
Idox Content is classified as discontinued operations given the
disposal of its businesses during the period. To enable appropriate
year-on-year comparison for Idox Content, UK Databases previously
included in Idox Content in FY20 H1 has been included within Idox
Software for that period to be consistent with the classification
from FY20 H2 onwards. In addition Corporate costs previously
allocated to Idox Content in FY20 have been reduced by GBP818,000
to better reflect the actual reduction in Corporate costs as a
result of the discontinued operations.
FY21 FY20 Variance
H1 H1
-----------------
GBP000 GBP000 GBP000 %
Revenue
- Public Sector Software 26,982 25,684 1,298 5%
- Engineering Information
Management 4,148 4,323 (175) (4%)
------- ---------- --------
Idox Software 31,130 30,007 1,123 4%
Idox Content (discontinued) 3,897 5,133 (1,236) (24%)
------- ---------- --------
Total 35,027 35,140 (113) (0.3%)
Revenue Split
- Public Sector Software 77% 73%
- Engineering Information
Management 12% 12%
------- ----------
- Idox Software 89% 85%
- Idox Content (discontinued) 11% 15%
Adjusted EBITDA
- Public Sector Software 9,420 8,102 1,318 16%
- Engineering Information
Management 719 568 151 27%
------- ---------- --------
Idox Software 10,139 8,670 1,469 17%
Idox Content (discontinued) 276 976 (700) (72%)
------- ---------- --------
Total 10,415 9,646 769 8%
Adjusted EBITDA Margin
Split
- Public Sector Software 35% 32%
- Engineering Information
Management 17% 13%
------- ----------
- Idox Software 33% 29%
- Idox Content (discontinued) 7% 19%
------- ----------
- Total 30% 27%
Idox Software
The following table analyses the revenues of Idox Software
between recurring and non-recurring.
Recurring revenue is defined as revenues associated with access
to a specific ongoing service, with invoicing that typically recurs
on an annual basis and underpinned by either a multi-year or
rolling contract. These services include Support & Maintenance,
SaaS fees, Hosting services, and some Managed Service arrangements
which involve a fixed fee irrespective of consumption.
Non-Recurring revenue is defined as revenues without any formal
commitment from the customer to repeat on an annual basis.
FY21 Variance
H1 FY20 H1
---------------
GBP000 GBP000 GBP000 %
Idox Software Revenues
- Recurring (PSS) 14,508 14,356 152 1%
- Recurring (EIM) 3,117 3,489 (372) (11%)
------- -------- ------- ------
17,625 17,845 (220) (1%)
- Non-Recurring (PSS) 12,474 11,328 1,146 10%
- Non-Recurring (EIM) 1,031 834 197 24%
------- -------- ------- ------
13,505 12,162 1,343 11%
31,130 30,007 1,123 4%
------- -------- ------- ------
- Recurring 57% 59%
- Non-Recurring 43% 41%
Recurring revenues continue to grow well in our local government
business (up 9% year on year) but were impacted by small reductions
in elections (planned consolidation of products), in social care
(Covid-19 impacted), health (planned exit from Malta) and EIM
(Covid-19 & corporate activity client-side).
Growth in non-recurring revenues remains strong across our Idox
Software business, as we continue to improve the quality and
frequency of our client engagements following establishment of our
revenue assurance team and consolidation of our professional
services activities under a single leadership structure.
Approximately half the increase was due to client continuations
from existing customers which whilst repeating over time, can
fluctuate from one period to the next.
Adjusted EBITDA increased by 17% to GBP10.1m (FY20 H1: GBP8.7m),
delivering an improved EBITDA margin of 33% (FY20 H1: 29%). This
increase in adjusted EBITDA is a direct consequence of our ongoing
efforts for marginal gains within our 'Four Pillars' framework of
improving the quality of revenues, margins, organisational
simplicity and communication at the same time as focusing capital
on strategic, higher margin activities. Whilst our revenue growth
in the period has been modest overall, we have seen good growth in
our higher-margin areas of scale, notably Local Authority and Idox
Cloud, with slower or slightly negative growth in lower-margin
activities, notably elections.
We continue with our efforts to improve efficiencies through
marginal gains across our sales, development, professional services
and support activities, and leverage our common resources to drive
higher margins through improved economies of scale.
In addition, we are actively seeking bolt-on acquisition
opportunities to further leverage the common resources Idox has
within its infrastructure with new product and cross-sale
opportunity. We strive to replicate the success of Idox Cloud since
the Tascomi acquisition in August 2019, which is up 27% FY21 H1
compared to the same period in FY20.
Idox Content
During the six months ended 30 April 2021, the Group received
separate offers to acquire its Continental Compliance operations,
and its Netherlands Grants Consultancy operations. These operations
collectively comprised the Idox Content division of the Group.
These offers were at an acceptable valuation and given the Group's
desire to prioritise capital on its Idox Software operation, these
disposals were completed in the period.
The Continental Compliance operations were disposed on 12 March
2021 and the Netherlands Grants Consultancy operations were
disposed on 6 April 2021. These dates represent the point the
control and legal ownership of these operations passed to the
acquirers.
Profit / (Loss) Before Tax
The following table provides a reconciliation between adjusted
EBITDA and statutory profit / (loss) before taxation for continuing
operations.
FY21 Variance
H1 FY20 H1
----------------
GBP000 GBP000 GBP000 %
Adjusted EBITDA 10,139 8,670 1,469 17%
Depreciation & Amortisation (5,043) (4,999) (44) 0%
Restructuring costs (160) (1,302) 1,142 (87%)
Acquisition costs (6) (125) 119 (93%)
Financing costs (29) (317) 288 (91%)
Share option costs (784) (394) (390) 99%
Net finance costs (462) (1,357) 895 (66%)
-------- ------------
Profit before taxation 3,655 176 3,479 1,977%
-------- ------------ -------
The reported profit before tax for continuing operations was
GBP3,655,000 (FY20 H1: GBP176,000).
Restructuring costs are analysed as follows:
FY21 Variance
H1 FY20 H1
-----------------
GBP000 GBP000 GBP000 %
Redundancies - 7 (7) (100%)
Disposal of Malta and Ireland
businesses - 426 (426) (100%)
Litigation (11) 33 (44) (133%)
Property - 836 (836) (100%)
Legal fees re Dye and Durham
approach 171 - 171 100%
------- --------
Total restructuring costs 160 1,302 (1,142) (88%)
------- -------- --------
Acquisition costs of GBP6,000 (FY20 H1: GBP0.1m) relates to the
final settlements in relation to the acquisition of Idox Cloud
(formerly Tascomi) in August 2019.
Financing costs of GBP29,000 (FY20 H1: GBP0.3m) relate to
professional fees incurred as part of the ongoing bank facility
agreement. The comparative period costs relate to refinancing in
December 2019.
Share option costs of GBP0.8m (FY20 H1: GBP0.4m) relate to the
accounting charge for awards made under the Group's Long-term
Incentive Plan.
Net finance costs have decreased to GBP0.5m (FY20 H1: GBP1.4m)
as a result of a foreign exchange gain on the revaluation of the
euro denominated bond and less interest being payable in respect of
the Group's banking facilities which were fully drawn at 30 April
2020 as part of our Covid-19 pandemic defensive actions but have
since been largely repaid.
Cashflow
Cash generated from operating activities after tax as a
percentage of Adjusted EBITDA was 175% (FY20 H1: 179%). The Group
generally continues to have high levels of adjusted EBITDA to cash
conversion due to the timing of our local authority renewals across
March and April every year resulting in strong seasonality to our
cashflows. The Group's April period end is typically the cash high
point for the Group in any given year as a result of the timing of
these local authority renewals.
The Group continues to invest in developing commercial-ready
innovative technology solutions across the Idox Software portfolio
and has incurred capitalised development costs of GBP2.2m (FY20 H1:
GBP2.2m).
Free cashflow at 30 April 2021 was GBP13.7m (FY20 H1: GBP12.1m).
Free cashflow has improved in the year due to improvements in
underlying profitable trading and working capital management.
FY21
H1 FY20 H1
GBP000 GBP000
Net cashflow (1,876) 25,274
Add back:
Disposals (10,730) -
Debt repayments, drawdowns
and fees 25,000 (13,236)
Net cost of staff shares schemes
/ (Issue of shares) (69) 63
Equity dividends paid 1,331 -
--------- ---------
Free cashflow 13,656 12,101
--------- ---------
The Group ended the period with net cash of GBP7.6m (FY20 H1:
net debt of GBP14.3m), a significant improvement following
continued strong cash generation in the period and net cash inflow
of GBP10.7m from the disposal of our Content business. Net cash
comprised cash of GBP29.2m less bank borrowings of GBP10.2m and the
Maltese listed bond of GBP11.4m.
The Group's total signed debt facilities at 30 April 2021
consisted of a revolving credit facility of GBP35m and GBP10m
accordion facility with the Royal Bank of Scotland plc, Silicon
Valley Bank and Santander UK plc (the "Lenders").
The Group has carefully assessed the ongoing impact of the
Covid-19 pandemic on the business and on our customers. Idox is
fundamentally resilient due to the Group's high recurring revenue
base, its focus on public sector markets and the high proportion of
staff that routinely work from home. The Group retains significant
liquidity with cash and available committed bank facilities and has
strong headroom against financial covenants. We continue to monitor
the situation and adapt our approach as required.
Rob Grubb
Chief Financial Officer
14 June 2021
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
Restated* Restated*
6 months 12 months
to to
6 months
to 30 April 30 April 31 October
2021 2020 2020
Note (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing operations
Revenue 3 31,130 30,007 57,284
Cost of sales (10,055) (9,149) (14,752)
-------------- ------------- ------------
Gross profit 21,075 20,858 42,532
Administrative expenses (16,958) (19,325) (38,540)
-------------- -------------
Operating profit 4,117 1,533 3,992
Analysed as:
Adjusted EBITDA 11 10,139 8,670 17,238
Depreciation & Amortisation (5,043) (4,999) (10,063)
Restructuring costs (160) (1,302) (1,748)
Acquisition costs (6) (125) (125)
Financing costs (29) (317) (306)
Share option costs (784) (394) (1,004)
--------------------------------------- ----- -------------- ------------- ------------
Finance income 801 134 181
Finance costs (1,263) (1,491) (2,358)
Profit before taxation 3,655 176 1,815
Income tax charge 5 (650) (1,265) (1,338)
Profit / (loss) for the period
from continuing operations 3,005 (1,089) 477
Discontinued operations
Profit for the year from discontinued
operations 6 4,284 107 799
Profit / (loss) for the period
attributable to the owners of
the parent 7,289 (982) 1,276
Other comprehensive income /
(loss) for the period
Items that will be reclassified
subsequently to profit or loss:
Exchange movement on translation
of foreign operations net of
tax 401 180 (97)
Other comprehensive income /
(loss) for the period, net of
tax 401 180 (97)
-------------- ------------- ------------
Total comprehensive income /
(loss) for the period attributable
to owners of the parent 7,690 (802) 1,179
============== ============= ============
Earnings per share attributable to owners
of the parent during the period
From continuing operations
Basic 7 0.68p (0.25)p 0.11p
Diluted 7 0.67p (0.25)p 0.11p
From continuing and discontinued
operations
Basic 7 1.66p (0.23)p 0.29p
Diluted 7 1.62p (0.23)p 0.29p
* The comparatives have been restated due to the Content
business being reclassified as discontinued operations. There has
been no change to the overall results.
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED INTERIM BALANCE SHEET
At 30 April
At 31 October
2021 Restated* 2020
At 30 April
Note (unaudited) 2020 (unaudited) (audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and
equipment 1,179 1,171 1,183
Intangible assets 8 71,386 83,505 81,652
Right-of-use-assets 2,066 3,986 3,726
Investment - 18 18
Deferred tax assets 1,450 1,403 1,111
Total non-current assets 76,081 90,083 87,690
--------------
Current assets
Trade and other receivables 20,088 22,526 18,700
Current tax receivable - 316 1,117
Cash and cash equivalents 29,159 32,268 30,812
Total current assets 49,247 55,110 50,629
------------- ------------------- --------------
Total assets 125,328 145,193 138,319
------------- ------------------- --------------
Liabilities
Current liabilities
Trade and other payables 7,372 7,856 6,084
Deferred consideration - 101 57
Other liabilities 33,388 34,779 26,839
Provisions 1,967 1,552 1,261
Current tax payable 126 - -
Lease liabilities 701 1,337 1,188
Total current liabilities 43,554 45,625 35,429
------------- ------------------- --------------
Non-current liabilities
Deferred tax liabilities 3,445 4,503 3,907
Deferred consideration - - 27
Lease liabilities 1,485 3,033 2,695
Other liabilities 934 1,091 1,791
Provisions - - 612
Bonds in issue 11,364 11,746 11,848
Borrowings 10,207 34,863 35,052
------------- ------------------- --------------
Total non-current liabilities 27,435 55,236 55,932
------------- ------------------- --------------
Total liabilities 70,989 100,861 91,361
------------- ------------------- --------------
Net assets 54,339 44,332 46,958
============= =================== ==============
Equity
Called up share capital 4,463 4,446 4,450
Capital redemption
reserve 1,112 1,112 1,112
Share premium account 41,466 41,348 41,356
Treasury reserve (594) (621) (621)
Share option reserve 3,068 2,210 2,618
Other reserves 7,528 7,528 7,528
ESOP trust (379) (366) (373)
Foreign currency translation
reserve 320 116 (161)
Accumulated losses (2,645) (11,441) (8,951)
------------- ------------------- --------------
Equity attributable to the
owners of the parent 54,339 44,332 46,958
============= =================== ==============
* The comparatives have been restated to fully disclose lease
liabilities that were previously included in other liabilities.
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Called Foreign
up Capital Share Share currency
share redemption premium Treasury options Other ESOP translation Accumulated Non-controlling
capital reserve account reserve reserve reserves trust reserve losses interests Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
1 November
2019 (audited) 4,446 1,112 41,348 (621) 1,837 7,528 (365) (64) (10,500) (110) 44,611
Share option
charge - - - - 414 - - - - - 414
Exercise /
lapses of share
options - - - - (41) - - - 41 - -
ESOP trust - - - - - - (1) - - - (1)
Disposal of
investment - - - - - - - - - 110 110
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Transactions
with owners
and
non-controlling
interests - - - - 373 - (1) - 41 110 523
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Loss for the
period - - - - - - - - (982) - (982)
Other
comprehensive
income
Exchange
movement
on translation
of foreign
operations - - - - - - - 180 - - 180
Total
comprehensive
loss for the
period - - - - - - - 180 (982) - (802)
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
At 30 April
2020
(unaudited) 4,446 1,112 41,348 (621) 2,210 7,528 (366) 116 (11,441) - 44,332
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Issue of share
capital 4 - 8 - - - - - - - 12
Share options
charge - - - - 640 - - - - - 640
Exercise /
lapses of share
options - - - - (232) - - - 232 - -
ESOP trust - - - - - - (7) - - - (7)
Transactions
with owners 4 - 8 - 408 - (7) - 232 - 645
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Profit for
the period - - - - - - - - 2,258 - 2,258
Other
comprehensive
income
Exchange
movement
on translation
of foreign
operations - - - - - - - (277) - - (277)
Total
comprehensive
profit for
the period - - - - - - - (277) 2,258 - 1,981
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Balance at
31 October
2020 (audited) 4,450 1,112 41,356 (621) 2,618 7,528 (373) (161) (8,951) - 46,958
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Issue of share
capital 13 - 110 - - - - - - - 123
Share option
charge - - - - 893 - - - - - 893
Exercise /
lapses of share
options - - - 27 (443) - - - 428 - 12
ESOP trust - - - - - - (6) - - - (6)
Equity dividends
paid - - - - - - - - (1,331) - (1,331)
Transactions
with owners 13 - 110 27 450 - (6) - (903) - (309)
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
Profit for
the period - - - - - - - - 7,289 - 7,289
Other
comprehensive
loss
Recycled
exchange
movements on
disposal of
subsidiaries - - - - - - - 80 (80) - -
Exchange
movement
on translation
of foreign
operations - - - - - - - 401 - - 401
Total
comprehensive
profit for
the period - - - - - - - 481 7,209 - 7,690
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
At 30 April
2021
(unaudited) 4,463 1,112 41,466 (594) 3,068 7,528 (379) 320 (2,645) - 54,339
--------- ------------ -------- ---------- --------- ---------- -------- ------------ ------------- ----------------- --------
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED INTERIM CASHFLOW STATEMENT
Restated*
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2021 2020 (unaudited) 2020 (audited)
Note (unaudited)
GBP000 GBP000 GBP000
Cash flows from operating
activities
Profit for the period before
taxation 7,935 289 2,702
Adjustments for:
Depreciation of property,
plant and equipment 467 393 817
Depreciation of right-of-use
assets 610 576 1,240
Amortisation of intangible
assets 4,420 4,704 9,282
(Gain) / loss on disposal
of subsidiary 6 (4,592) - 380
Finance income (801) (89) (5)
Finance costs 1,205 2,014 2,210
Debt issue costs amortisation 73 (323) 189
Research and development
tax credit (100) (114) (134)
Share option costs 903 414 1,057
Loss on disposal of leases - - 36
Movement in stock - 54 54
Movement in receivables (2,879) (2,662) 1,192
Movement in payables 10,386 11,647 4,329
---------------- ------------------- ------------------
Cash generated by operations 17,627 16,903 23,349
Tax on loss refunded / (tax
on profit paid) 148 (872) (2,000)
Net cash from operating activities 17,775 16,031 21,349
Cash flows from investing
activities
Disposal of subsidiaries 10,730 - (200)
Purchase of property, plant
and equipment (790) (490) (931)
Purchase of intangible assets (2,307) (2,333) (5,998)
Finance income 19 89 5
------------------
Net cash used in investing
activities 7,652 (2,734) (7,124)
Cash flows from financing
activities
Interest paid (363) (655) (1,644)
New loans 5,000 39,012 38,575
Loan related costs - (14) (48)
Loan repayments (30,000) (25,762) (25,762)
Principal lease payments (678) (541) (1,545)
Equity dividends paid (1,331) - -
Issue of own shares 69 (63) (118)
---------------- -------------------
Net cash flows from financing
activities (27,303) 11,977 9,458
Net movement in cash and
cash equivalents (1,876) 25,274 23,683
Cash and cash equivalents
at the beginning of the period 30,812 7,023 7,023
Exchange (losses) / gains on cash
and cash equivalents 223 (29) 106
Cash and cash equivalents at the
end of the period 29,159 32,268 30,812
============ =================== ======================
* The comparatives have been restated to fully disclose lease
liabilities that were previously included in movement in
payables.
The accompanying accounting policies and notes form an integral
part of these financial statements.
NOTES TO THE INTERIM ACCOUNTS
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, limited by shares, which is listed on
the AIM Market of the London Stock Exchange and is incorporated and
domiciled in the UK. The address of its registered office is 2nd
Floor, 1310 Waterside, Arlington Business Park, Theale, Reading,
RG7 4SA. The registered number of the Company is 03984070. There is
no ultimate controlling party.
The financial statements are prepared in pounds sterling .
2 Basis of preparation
The financial information for the period ended 30 April 2021 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 2020
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified.
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 2021. The Group financial statements for the year ended 31
October 2020 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
Group has not applied IAS 34 'Interim Financial Reporting', which
is not mandatory for AIM companies, in the preparation of these
interim financial statements.
Going concern
The Directors, having made suitable enquiries and analysis of
the accounts, consider that the Group has adequate resources to
continue in business for the foreseeable future. In making this
assessment, which covers a minimum period of twelve months from
approval of these accounts, the Directors have considered the
Group's trading budget, cash flow forecasts, available headroom and
projected financial covenants on the banking facility, and levels
of recurring revenue.
Idox along with most companies has been impacted by the Covid-19
pandemic and recurring national lockdowns, however the impact on
our Group has in the main been limited to the initial disruption of
the early stages of the emerging challenges, including restrictions
on physical movement. We have largely seen our operations return to
their pre-Covid-19 pandemic levels across our Group.
We remain cautious in respect of the ongoing impact of the
Covid-19 pandemic and the recurring national lockdowns. From our
experience of the impact of the Covid-19 pandemic since March 2020,
we are confident we are fundamentally resilient to the challenges
of the Covid-19 pandemic due to the Group's high recurring revenue
base, its focus on public sector markets and the high proportion of
staff that routinely work from home.
On the basis of the above considerations, the Directors have a
reasonable expectation that the Group will have adequate resources
to continue in business for the foreseeable future and therefore
continue to adopt the going concern basis in preparing the interim
financial statements.
3 Segmental analysis
During the period ended 30 April 2021, the Group was organised
into three operating segments which are detailed below.
Financial information is reported to the chief operating
decision maker, which comprises the Chief Executive Officer and the
Chief Financial Officer, monthly with revenue and operating profits
split by business unit. Each business unit is deemed an operating
segment as each offers different products and services.
-- Idox Software: Public Sector Software (PSS) - delivering
specialist information management solutions and services to the
public sector.
-- Idox Software: Engineering Information Management (EIM) -
delivering engineering document management and control solutions to
asset intensive industry sectors.
-- Idox Content - delivering funding and compliance solutions to
corporate, public and commercial 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, Group
interest payments and Group acquisition costs. The assets and
liabilities of the Group are not reviewed by the chief operating
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 2021 were:
Continuing Discontinued
operations operations
PSS EIM total Content Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 26,982 4,148 31,130 3,897 35,027
-------- -------- ------------ ------------- --------
Adjusted EBITDA (note
11) 9,420 719 10,139 276 10,415
-------- -------- ------------ ------------- --------
Depreciation & Amortisation (4,778) (265) (5,043) (454) (5,497)
Restructuring costs (127) (33) (160) - (160)
Acquisition costs (6) - (6) - (6)
Share option costs (771) (13) (784) (119) (903)
-------- -------- ------------ ------------- --------
Adjusted segment operating
profit 3,738 408 4,146 (297) 3,849
-------- -------- ------------ ------------- --------
Financing costs (29) - (29)
Gain from sale of discontinued
operations - 4,592 4,592
Finance income 801 - 801
Finance costs (1,263) (15) (1,278)
------------ ------------- --------
Profit before tax 3,655 4,280 7,935
------------ ------------- --------
The corporate recharge to the business unit is allocated on a
head count basis with the exception of Content, which has had
corporate costs reduced to avoid stranded costs.
The segment results for the 6 months to 30 April 2020 were:
Continuing Discontinued
operations operations
PSS* EIM total Content* Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 25,684 4,323 30,007 5,133 35,140
-------- -------- ------------ ------------- --------
Adjusted EBITDA (note
11) ** 8,102 568 8,670 976 9,646
-------- -------- ------------ ------------- --------
Depreciation & Amortisation (4,256) (743) (4,999) (674) (5,673)
Restructuring costs (1,302) - (1,302) (149) (1,451)
Acquisition costs (125) - (125) - (125)
Share option costs (394) - (394) (20) (414)
-------- -------- ------------ ------------- --------
Adjusted segment operating
profit 2,025 (175) 1,850 133 1,983
-------- -------- ------------ ------------- --------
Financing costs (317) - (317)
Finance income 134 - 134
Finance costs (1,491) (20) (1,511)
------------ ------------- --------
Profit before tax 176 113 289
------------ ------------- --------
* UK Databases has been reclassified from Idox Content to Idox
Software (Public Sector Software) in FY20 H1 to enable appropriate
year-on-year comparison.
** Corporate costs for Idox Content have been reduced by
GBP818,000 to better reflect the actual reduction in Corporate
costs as a result of the discontinued operations. These costs have
been allocated to PSS and EIM on a headcount basis.
The segment revenues by geographic location were as follows:
Continuing Discontinued Total Group
GBP000 GBP000 GBP000
FY21 H1: Revenues from external
customers:
United Kingdom 26,679 46 26,725
North America 2,836 27 2,863
Europe 1,149 3,824 4,973
Australia 187 - 187
Rest of World 279 - 279
----------- ------------- ------------
31,130 3,897 35,027
=========== ============= ============
Continuing Discontinued Total Group
GBP000 GBP000 GBP000
FY20 H1: Revenues from external
customers:
United Kingdom 24,751 154 24,905
North America 3,216 52 3,268
Europe 1,328 4,926 6,254
Australia 311 - 311
Rest of World 401 1 402
----------- ------------- ------------
30,007 5,133 35,140
=========== ============= ============
4 Dividends
During the period a dividend was paid in respect of the year
ended 31 October 2020 of 0.3p per ordinary share at a total cost of
GBP1,331,000 (FY20 H1: GBPNil) .
The directors do not propose a dividend in respect of the
interim period ended 30 April 2021 (FY20 H1: GBPNil).
5 Tax on profit on ordinary activities
12 months
to
6 months 6 months 31 October
to to 2020
30 April 30 April
Continuing operations 2021 (unaudited) 2020 (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
UK corporation tax on profit /
loss for the year 1,116 761 936
Foreign tax on overseas companies 294 62 (16)
Under / (over) provision in respect
of prior periods (53) - 317
------------------- ------------------- ------------
Total current tax 1,357 823 1,237
------------
Deferred tax
Origination and reversal of timing
differences (723) 141 738
Adjustment for rate change 16 301 (181)
Adjustments in respect of prior
periods - - (467)
Other - - 11
------------------- ------------------- ------------
Total deferred tax (707) 442 101
------------------- ------------------- ------------
Total tax charge 650 1,265 1,338
=================== =================== ============
12 months
to
6 months 6 months 31 October
to to 2020
30 April 30 April
Total operations 2021 (unaudited) 2020 (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
UK corporation tax on profit /
loss for the year 1,136 757 1,065
Foreign tax on overseas companies 294 62 (16)
Under / (over) provision in respect
of prior periods (88) - 235
------------------- ------------------- ------------
Total current tax 1,342 819 1,284
------------
Deferred tax
Origination and reversal of timing
differences (712) 151 774
Adjustment for rate change - 301 (169)
Adjustments in respect of prior
periods 16 - (473)
Other - - 10
------------------- ------------------- ------------
Total deferred tax (696) 452 142
------------------- ------------------- ------------
Total tax charge 646 1,271 1,426
=================== =================== ============
Unrelieved trading losses of GBP350,000 overseas remain
available to offset against future taxable trading profits
(excluding unrecognised losses of GBP641,000 in the UK and
GBP9,667,000 overseas).
6 Discontinued operations
During the six months ended 30 April 2021, the Group received
separate offers to acquire its Continental Compliance operations,
and its Netherlands Grants Consultancy operations. These operations
collectively comprised the Idox Content division of the Group.
These offers were at an acceptable valuation and given the Group's
desire to prioritise capital on its Idox Software operation, these
disposals were completed in the period.
The Continental Compliance operations were disposed on 12 March
2021 and the Netherlands Grants Consultancy operations were
disposed on 6 April 2021. These dates represent the point the
control and legal ownership of these operations passed to the
acquirers.
The results of the discontinued operations, which have been
excluded in the consolidated income statement, were as follows:
12 months
6 months 6 months to
to 30 April to 30 April 31 October
2021 (unaudited) 2020 (unaudited) 2020 (audited)
GBP000 GBP000 GBP000
Revenue 3,897 5,133 10,733
Expenses (4,209) (5,020) (9,846)
Gain on disposal 4,592 - -
Profit before tax 4,280 113 887
Attributable tax expense 4 (6) (88)
Net loss attributable to discontinued
operations 4,284 107 799
================== ================== ================
During the period, Content contributed GBP0.0m (FY20 H1:
(GBP0.1m)) to the Group's net operating cash flows and contributed
GBP10.7m (HY20 H1: GBPNil) in respect of investing and financing
activities.
7 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:
Restated* Restated*
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2021 2020 2020
Continuing operations (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit / (loss) for the period 3,005 (1,089) 477
------------- ------------- ------------
Basic earnings per share
Weighted average number of shares
in issue 439,422,715 432,170,594 439,245,132
------------- ------------- ------------
Basic earnings per share 0.68p (0.25)p 0.11p
============= ============= ============
Weighted average number of shares
in issue 439,422,715 432,170,594 439,245,132
Add back:
Dilutive share options 9,809,942 1,295,912 7,279,721
Weighted average allotted, called
up and fully paid share capital 449,232,657 433,466,506 446,524,853
------------- ------------- ------------
Diluted earnings per share
Diluted earnings per share 0.67p (0.25)p 0.11p
============= ============= ============
Diluted earnings per share cannot further dilute the loss
attributable to the owners, therefore, diluted earnings per share
during a loss-making period is the same as basic earnings per
share.
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2021 2020 2020
Total operations (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Profit / (loss) for the period 7,289 (982) 1,276
------------- ------------- ------------
Basic earnings per share
Weighted average number of shares
in issue 439,422,715 432,170,594 439,245,132
------------- ------------- ------------
Basic earnings per share 1.66p (0.23)p 0.29p
============= ============= ============
Weighted average number of shares
in issue 439,422,715 432,170,594 439,245,132
Add back:
Dilutive share options 9,809,942 1,295,912 7,279,721
6 months Restated* Restated*
to 6 months 12 months
to to
30 April 30 April 31 October
2021 2020 2020
Adjusted earnings per share (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Adjusted profit for the period
(see note 11) 5,221 2,475 6,576
Weighted average number of shares
in issue - basic 439,422,715 432,170,594 439,245,132
Weighted average number of shares
in issue - diluted 449,232,657 433,466,506 446,524,853
Adjusted basic earnings per share 1.16p 0.57p 1.50p
Adjusted diluted earnings per share 1.13p 0.57p 1.47p
* The comparatives have been restated due to the Content
business being reclassified as discontinued operations. There has
been no change to the overall results.
8 Intangibles
Customer Trade Development
Goodwill relationships names Software costs Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 31 October 2020 48,019 11,131 3,353 7,504 11,645 81,652
Foreign exchange - - - - (9) (9)
Additions - - - 95 2,218 2,313
Disposals (7,421) (390) (115) (130) (94) (8,150)
Amortisation - (687) (323) (1,340) (2,070) (4,420)
At 30 April 2021 40,598 10,054 2,915 6,129 11,690 71,386
======== ============== ====== ======== =========== =======
No impairment charge was incurred during H1 2021 (H1 2020:
GBPNil).
9 Long-term incentive plan (LTIP)
During the period, 3,387,735 options were granted under the
LTIP.
The Group recognised a total charge of GBP892,622 (H1 2020:
GBP413,602) for equity-settled share-based payment transactions
related to the LTIP during the period. The total cost was in
relation to outstanding share options and share options granted in
the year.
The number of options in the LTIP scheme is as follows:
30 April 30 April 31 October
2021 2020 2020
No. No. No.
Outstanding at the beginning of
the period 12,435,871 8,429,410 8,429,410
Granted 3,387,735 854,303 4,366,064
Forfeited (265,345) - -
Exercised (999,428) - (359,603)
-------------------------------------- ----------- ---------- -----------
Outstanding at the end of the period 14,558,833 9,283,713 12,435,871
-------------------------------------- ----------- ---------- -----------
Exercisable at the end of the period 4,941,749 - 2,450,196
-------------------------------------- ----------- ---------- -----------
10 Post balance sheet events
Acquisition of Aligned Assets Holdco Limited
On 7 June 2021, the Group announced the acquisition of Aligned
Assets Holdco Limited ("Aligned Assets").
Aligned Assets are market leaders in the address management
field, provide cutting edge solutions ranging from high-speed
matching and cleansing, to sub-second predictive searching, as well
as solutions for managing, sharing and viewing address data
including in augmented reality. For local authorities, the business
provides specialist cloud-based solutions for creating and managing
Local Land and Property Gazetteers (LLPG) and Local Streets
Gazetteers (LSG), as well as street naming and numbering. Aligned
Assets is based in Woking and has 24 employees.
The Group paid initial cash consideration is GBP7.5m for the
purchase of Aligned Assets, increasing to a total maximum of
GBP10.5m, comprising earn-out amounts of up to GBP1.5m payable in
cash and GBP1.5m payable in equity over two years. The size of
earn-out is dependent on progress against targets associated with
retention of existing recurring revenues, winning new revenues, and
delivery of technical advancements and integrations with the
existing Idox Group product set. The consideration will be funded
from Idox's existing financial resources, which were bolstered by
the disposal of its Content division in March 2021.
Changes to UK Corporation tax rate
The Finance (No.2) Act 2015 reduced the main rate of UK
corporation tax to 19%, effective from 1 April 2017. A further
reduction in the UK corporation tax rate to 17% was expected to
come into effect from 1 April 2020 (as enacted by Finance Act 2016
on 15 September 2016). However, legislation introduced in the
Finance Act 2020 (enacted on 22 July 2020) repealed the reduction
of the corporation tax, thereby maintaining the current rate of
19%. Deferred taxes on the balance sheet have been measured at 19%
(2019 - 19%) which represents the future corporation tax rate that
was enacted at the balance sheet date.
The UK Budget 2021 announcements on 3 March 2021 included
measures to support economic recovery as a result of the ongoing
Covid-19 pandemic. These included an increase to the UK's main
corporation tax rate to 25%, which is due to be effective from 1
April 2023. The Finance Bill 2021 was substantively enacted on 24
May 2021. However as this was not substantively enacted at the
balance sheet date this has not been reflected in the measurement
of deferred tax balances at the period end. If the Company's /
Group's deferred tax balances at 30 April 2021 end were remeasured
at 25% this would result in further a deferred tax charge of
GBP486,000.
11 Alternative Performance Measures
Where relevant, adjusted measures of profit have been used
alongside statutory definitions. The main items that are added back
to statutory profit are: amortisation from acquired intangible
assets, impairment, restructuring costs, acquisition &
financing costs and share option costs. These items are excluded
from statutory measures of profit to present a measure of cash
earnings from underlying activities on an ongoing basis. This is in
line with management information requested and presented to the
decision makers in our business; and is consistent with how the
business is assessed by our providers of capital.
The following tables set out the Alternative Performance
Measures in respect of continuing operations:
6 months 6 months 12 months
to 30 April to 30 April to 31 October
Continuing operations 2021 (unaudited) 2020 (unaudited) 2020 (unaudited)
GBP000's GBP000's GBP000's
Adjusted EBITDA
Statutory measure as reported - Operating
Profit 4,117 1,533 3,992
Add back:
Depreciation & Amortisation 5,043 4,999 10,063
Restructuring costs 160 1,302 1,748
Acquisition 6 125 125
Financing costs 29 317 306
Share option costs 784 394 1,004
---------------------- ------------------ ------------------
Adjusted EBITDA 10,139 8,670 17,238
====================== ================== ==================
Adjusted EBIT
Statutory measure as reported - Operating
Profit 4,117 1,533 3,992
Add back:
Amortisation from acquired intangibles 1,737 2,066 4,010
Restructuring costs 160 1,302 1,748
Acquisition 6 125 125
Financing costs 29 317 306
Share option costs 784 394 1,004
---------------------- ------------------ ------------------
Adjusted EBIT 6,833 5,737 11,185
====================== ================== ==================
Adjusted PBT
Statutory measure as reported - PBT 3,655 176 3,992
Add back:
Amortisation from acquired intangibles 1,737 2,066 4,010
Restructuring costs 160 1,302 1,748
Acquisition 6 125 125
Financing costs 29 317 306
Share option costs 784 394 1,004
---------------------- ------------------ ------------------
Adjusted PBT 6,371 4,380 11,185
====================== ================== ==================
Adjusted PAT
Statutory measure as reported - PAT 3,005 (1,089) 477
Add back:
Amortisation from acquired intangibles 1,737 2,066 4,010
Restructuring costs 160 1,302 1,748
Acquisition 6 125 125
Financing costs 29 317 306
Share option costs 784 394 1,004
Tax effect (640) (640) (1,094)
---------------------- ------------------ ------------------
Adjusted PAT 5,081 2,475 6,576
====================== ================== ==================
EBITDA Earnings before interest, tax, PBT Profit before
depreciation and amortisation taxation
EBIT Earnings before interest and tax PAT Profit after
taxation
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END
IR FIFIERLIELIL
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