IDOX PLC AGM Trading Update & 2016 Prior Year Adjustment (4054U)
March 29 2019 - 3:01AM
UK Regulatory
TIDMIDOX
RNS Number : 4054U
IDOX PLC
29 March 2019
Idox plc
("Idox" or "the Group")
Annual General Meeting Trading Update and 2016 Prior Year
Adjustment
Idox plc (AIM: IDOX), a leading supplier of specialist
information management solutions and services, will be holding its
Annual General Meeting at 10.30am today. At the meeting, the
Chairman will make the following statement:
Trading and Business Update
We are making good progress with our strategy to move the Group
to a more stable footing and build shareholder value. The Board
remains confident in the prospects for the business and is pleased
to confirm that the Group continues to trade in line with market
expectations..
We continue to make financial and operational governance
improvements and have made good progress across a number of fronts
as set out below. As part of this ongoing process we have recently
identified 2016 year end contract documentation irregularities that
will necessitate a modest adjustment to prior year brought forward
balances as set out in the section headed 'Prior year
adjustment'.
We are pleased to advise on our progress across the Group in the
following areas:
-- 'The 4 Pillars' programme. Improving the quality of Revenue,
EBITDA, Cashflow together with the simplification of the
organisation, including:
o implementing appropriate revenue recognition policies,
practices and understanding throughout the organisation to ensure
our revenues match our performance obligations;
o establishing visibility over our data and information to
understand more fully the financial risks and opportunities
throughout our Group; and
o closer integration of previous acquisitions across the
business;
-- Selling. Reassessing our selling methodologies, improving
governance through the appointment of a Chief Process and
Transformation officer, implementing sales governance, establishing
robust pricing models and stratifying our sales resources to match
the profiles of our customer base;
-- Product. Investing in product strategy with the appointment
of a new Product Director, co-ordinating development activity, and
co-ordinating and reviewing existing third-party licensing
arrangements;
-- Services. Addressing historical challenges of low levels of
chargeability for professional services and maximising services
revenue opportunities generally;
-- Infrastructure. Creating more resilient and cost-effective IT
infrastructure that underpins both our Corporate and customer
activities. Improving engagement of our back-office activities with
wider operational activities;
-- Employees. Establishing an employee engagement programme to
improve communication and work practices throughout the
organisation; and
-- KPIs. Identifying and monitoring appropriate KPI's throughout
the organisation and challenging existing operating models using
those KPIs as a guide.
2016 prior year adjustment
As part of our more stringent approach to contract monitoring
and execution, we have recently identified a number of
irregularities in historic customer contracts, signed and
recognised in the year ended 31 October 2016 ("FY16"), that had
been inappropriately amended by a small number of employees. The
effect of these contract irregularities is that revenue and profit
of approximately GBP4.5 million to GBP5.5 million was recognised in
FY16, the majority of which should have been recognised in later
periods. Those employees still with the company have been suspended
pending an investigation into their conduct. Having thoroughly
assessed the financial impact, the Board has concluded that this
issue is historical in nature and will have no impact on the
Group's cash balances or its current year financial performance
although a small adjustment to the opening net assets will be
required, as described below.
Whilst we continue to work through the detail of this issue to
understand the full effect on the previously reported FY16 results,
the expected Group net assets will be adjusted from the opening
balance of GBP49.8m at 1 November 2018 by approximately GBP0.75m.
We anticipate correcting this historical overstatement by way of a
prior year adjustment to the opening 2018 balance sheet in the
Interim and Final accounts for the year ending 31 October 2019.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information please contact:
Enquiries:
Idox plc
+44 (0) 870 333 7101
Chris Stone, Non-Executive Chairman
David Meaden, Chief Executive
Rob Grubb, Chief Financial Officer
N+1 Singer (NOMAD and Broker) +44 (0) 20 7496 3000
Shaun Dobson / Jen Boorer
Tom Salvesen (Corporate Broking)
About Idox plc
For more information see www.idoxplc.com @Idoxgroup
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END
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