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IDOX.GB Idox Plc

63.00
0.00 (0.00%)
28 Mar 2024 - Closed
Realtime Data
Share Name Share Symbol Market Type Share ISIN Share Description
Idox Plc AQSE:IDOX.GB Aquis Stock Exchange Ordinary Share GB0002998192
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 63.00 60.00 66.20 63.10 61.50 62.00 13,420 16:29:58
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

IDOX PLC Half-year Report (3693A)

07/06/2016 7:00am

UK Regulatory


Idox (AQSE:IDOX.GB)
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TIDMIDOX

RNS Number : 3693A

IDOX PLC

07 June 2016

7 June 2016

IDOX plc

Half Year Results for the six months ended 30 April 2016

IDOX plc (AIM: IDOX, "Idox", "the Company" or "the Group"), a leading supplier of specialist information management solutions and services, today announces half year results for the six months ended 30 April 2016.

Financial highlights:

   --      Revenues up 26% to GBP37.2m (H1 2015: GBP29.6m) including 5% organic growth 
   --      Adjusted EBITDA* increased 42% to GBP10.1m (H1 2015: GBP7.1m) 
   --      Adjusted EBITDA* margin improved to 27% (H1 2015: 24%) 
   --      Profit before tax was 110% higher at GBP6.5m** (H1 2015: GBP3.1m) 
   --      Adjusted profit before tax*** was 36% up at GBP7.9m (H1 2015: GBP5.8m) 
   --      Adjusted EPS*** 1.97p up 56% (H1 2015 restated: 1.26p) 

-- Cash generated from operating activities before tax as a percentage of Adjusted EBITDA was 145% (H12015: 149%)

-- Net debt as at 30 April 2016 stood at GBP13.9m (H1 2015 GBP9.7m; 31 October 2015: GBP23.2m); GBP9.35m cost of the two acquisitions in H2 2015

   --       Interim dividend of 0.35p (2015: 0.325p) up 8% 

Operational highlights:

   --      Strong performance from Public Sector Software (PSS): 

o Organic growth - 81 new system wins

o Delivered local election solutions in May 2016

o Good progress with digital services platform

   --      Good first time contribution from Reading Room (acquired in H2 2015) 

-- Engineering Information Management (EIM) continued its recovery with 10% organic revenue growth and double digit margins

Current trading:

   --      Visibility of revenues from the European Referendum and a healthy pipeline and order book 

* Adjusted EBITDA is defined as earnings before amortisation, depreciation, restructuring, acquisition, corporate finance and share option costs

** Includes GBP0.7m acquisition credit

*** Adjusted profit before tax and adjusted EPS excludes amortisation on acquired intangibles, restructuring and acquisition costs

Richard Kellett-Clarke, Chief Executive of Idox, commented:

"The Group is pleased to report excellent progress in line with expectations and its strategy. Our strong growth reflected the success of focusing on supporting our customers to deliver efficiency in key areas of our domain expertise; this growth was derived from a combination of solid organic growth and a good contribution from Reading Room."

"Following the strong first half performance, we have additional visibility of revenues from the European Referendum and a healthy pipeline and order book. These together with full year contributions from last year's acquisitions, means the Board is confident of at least meeting market expectations for the financial year as a whole."

Enquiries:

 
                                    +44 (0) 870 333 
 IDOX plc                                      7101 
 
 Richard Kellett-Clarke, 
  Chief Executive 
  Jane Mackie, Chief Financial 
  Officer 
  Andrew Riley, Chief Operations 
  Officer 
 
                                    +44 (0) 20 7496 
 N+1 Singer (NOMAD and Broker)                 3000 
 Shaun Dobson 
  Liz Yong 
                                    +44 (0) 20 3128 
 MHP Communications                            8100 
 Reg Hoare 
  Andrew Leach 
  Charlie Baker 
 

About Idox plc

Idox plc is a supplier of specialist information management solutions to the public sector and to highly regulated asset intensive industries around the world in the wider corporate sector.

Idox 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. Idox 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, and providing elections management solutions. It also supplies in the UK and internationally, decision support content such as grants and planning policy information and corporates compliance services. Idox delivers engineering document control, project collaboration and facility management applications to many leading companies in industries such as oil & gas, architecture and construction, mining, utilities, pharmaceuticals and transportation in North America and around the world.

The Group employs over 665 staff located in the UK, North America, Europe, India and Australia.

For more information see www.idoxplc.com.

Chairman's and Chief Executive's Statement

For the six months ended 30 April 2016

Introduction

The Group is pleased to report excellent progress in line with expectations and its strategy. Our strong revenue and adjusted profit growth (26% and 36% respectively) reflected the success of focusing on supporting our customers to deliver efficiency in key areas of our domain expertise; this growth was derived from a combination of solid organic revenue growth (5%) and a good first time contribution from Reading Room (acquired in H2 2015).

Despite global macroeconomic uncertainty our principal markets were stable during the period and the Group continued to benefit from its diversified business model and sources of earnings. We are a beneficiary of the EU Referendum on 23 June as a provider of election services to many local councils, whilst there has been no impact due to uncertainty about the outcome of that vote to date. Our energy related markets were flat, as predicted, while there was a change of sales mix in our compliance market but neither held back the progress made at Group level.

First half trading was strong in Public Sector Software, Grants and Engineering Information Management all of which delivered year-on-year revenue growth of between 10% and 30%. The two acquisitions made in the second half of last year - Cloud Amber and Reading Room - were successfully integrated in line with our plan.

Gross margin in the first half was fractionally lower due to the increased mix of lower margin election revenues, with costs in the business as a whole continuing to be tightly managed. We have now fully transferred all operating subsidiaries to our Group Enterprise Resource Planning system and we continue to look for operational improvements across the business.

89% (2015: 88%) of Idox's half year revenues were derived from recurring contracts with customers and from repeat customers from whom the Group had derived revenues in the same period last year; this gives the Group significant revenue visibility and is evidence of Idox's strong relationships and focus on customer service.

Interim dividend

The Board is pleased to declare an interim dividend of 0.35p, representing an increase of 8% over the previous year's interim dividend of 0.325p. This increase is consistent with both our improved performance and our progressive dividend policy to grow dividends in line with earnings growth.

Divisional Review

In previous periods the Group was organised into two main operating segments, Public Sector Software and Engineering Information Management. Following an internal reorganisation the Group is now organised into five operating segments. The Board believes this provides greater transparency as well as operational benefits. The changes are as follows:

 
 Old segments              New segments 
 
 Public Sector Software    Public Sector Software 
 Engineering Information   Engineering Information 
  Management                Management 
                           Grants 
                           Compliance 
                           Reading Room 
 

Public Sector Software (PSS)

The Public Sector Software division (comprising the local government, elections, facilities management and transport (Cloud Amber) businesses) continued to accelerate market share gains with 81 new system wins in the six months, compared to 240 systems in the past three years.

Included in this were some impressive wins by the elections' business including a contract for the Electoral Office for Northern Ireland to supply, implement and support a new electoral management system over a ten year term. This followed on from the Scottish Government eCount project, a particularly proud moment for our substantially Glasgow-based team. Idox has a unique capability in this area with a proven track record compared to its competition and our reputation has attracted interest from overseas partners to pitch for elections counts internationally. We are currently in the middle of delivering the EU Referendum, having delivered the Scottish Government, Council and Police Commissioner elections in May.

The Group continued to make good progress with its digital services platform and extended the solutions using the platform. It provided integration services for the Scottish Online Planning system - with over 72% of all planning applications in Scotland being delivered online and being brokered through our systems. The use of iApply for Planning and Building Control continues to expand and we are on target to launch iApply for Licensing in the second half. The platform is also supporting delivery of our new mobile applications with new products launched in the period for Building Control & Environmental Health Inspection and more to be released in the second half.

Facilities Management had a particularly strong start to the year winning 14 contracts and delivering year-on-year revenue growth of 30%. This was achieved through increased cross-selling into our existing Education, Central and Local Government customer base.

Grants

The Grants business, where there has been investment for growth, reported a near 18% growth in revenues compared to the first half of 2015 with gains across the board.

Compliance

Compliance had a relatively slow start to the year after its strong finish last year, due to a change in sales mix, but has made good progress on its strategic initiatives. It launched sales in the North American market with a first major contract win in Canada with our partners WSP Parsons Brinckerhoff. It also launched a new product in conjunction with our legal partner Freshfields LLP in the UK. The team also continues to be actively involved in the development of the International ISO 19600 Compliance Management System for large businesses.

Reading Room

Reading Room, our newly acquired digital change web consultancy, has had a strong outturn given the significant amount of restructuring, re-training and integration completed in the first six months. Against this backdrop it returned a profit in the six months some 50% higher than that for the whole of the previous year. Notable projects were the go live of Royal.UK, the official website of the Royal Family in the Queen's ninetieth year, and a modernised and more focused Arts Council website. Reading Room also began working with other Group businesses and is delivering transport portals for our other recent acquisition, Cloud Amber, as well as assisting in extending our capabilities in digital services and providing better user experience and customer journeys for our local authority client base.

Engineering Information Management (EIM)

Engineering showed year-on-year growth in revenues driven by further sales to EDF and our installed customer base spending on iterative change to deliver operational efficiency gains. We are seeking to capitalise on this with the launch of our new Onlink and Opidis add on products. The division has also signed its inaugural, and hoped first of many, reseller agreement with Amplexor in Canada.

Our technology

With the accelerated development of our digital services platform, new engineering operational solutions from our French company and increased capability in hosting and managed services, we continue to develop relevant solutions delivering savings, productivity gains, and a better user and operator experience for customers. As we further develop these capabilities and bolster our reputation as experts at digital change we continue to create opportunities for future growth.

Our markets

Public sector spending constraints continue to drive this market to consider new and innovative ways of doing things as well as encouraging further consolidation around core domain expert suppliers. The flat engineering market is now mirroring the public sector in focusing on enhancement and operational and digital changes to drive efficiency. Our ability to deliver efficiency gains and cost savings to customers leaves us well positioned to benefit from these market drivers.

Group strategy

Our intention is to continue Idox's transformation into a much larger business that is a market leader in its core markets. This will be achieved via a combination of organic growth and selective acquisitions, funded from the Group's cash flows and financial facilities. This is intended to deliver double digit annual growth with a short to medium term objective to grow the Group from its current GBP63m in annual revenue to GBP100m at sustainable margins.

Outlook

Following the strong first half performance, we have additional visibility of revenues from the European Referendum and a healthy pipeline and order book. These together with full year contributions from last year's acquisitions, means the Board is confident of at least meeting market expectations for the financial year as a whole.

   Laurence Vaughan                                          Richard Kellett-Clarke 
   Chairman                                                         Chief Executive 

6 June 2016

Chief Financial Officer's Review

For the six months ended 30 April 2016

Financial Review

Group revenues grew by 26% to GBP37.2m (H1 2015: GBP29.6m) driven by organic growth of 5% and the impact of two acquisitions Cloud Amber Ltd and Reading Room Ltd. 26% of Group revenues were generated outside of the UK (H1 2015: 34%) with a change in geographical mix due to the two acquisitions, which have a majority customer base in the UK. Gross profit earned increased 25% to GBP32.3m (H1 2015: GBP25.9m) and the Group saw a slight decrease in gross margin from 88% to 87% as a result of lower margin election print revenue related to May local elections and the EU Referendum. Earnings before interest, tax, amortisation, depreciation, restructuring, acquisition, corporate finance and share option costs ("Adjusted EBITDA") increased by 42% to GBP10.1m (H1 2015: GBP7.1m) with EBITDA margins increasing to 27% (H1 2015: 24%).

Performance by segment

In previous periods, the Group was organised into two main operating segments. Following an internal reorganisation the Group is now organised into five operating segments.

The PSS division, which accounted for 55% of Group revenues (H1 2015: 57%), delivered revenues of GBP20.5m (H1 2015: GBP17.0m) due to 11% organic growth and the contribution of Cloud Amber. Product and services revenue grew by 25% (organic: 8%) to GBP8.1m (H1 2015: GBP6.5m). Election revenues accounted for GBP4.1m (H1 2015: GBP2.2m) of PSS revenues with the division delivering on the Scottish eCount project, May local elections and preparation work on the EU Referendum. Recurring revenues within the PSS division were 40% (H1 2015: 49%) decreasing due to the contribution of election revenue in the period. Divisional Adjusted EBITDA increased by 27% to GBP7.9m (H1 2015: GBP6.2m), delivering a 39% EBITDA margin (H1 2015: 37%).

The EIM division accounted for 18% of Group revenues (H1 2015: 21%) with revenue increasing 10% to GBP6.8m (H1 2015: GBP6.2m). Recurring revenues within the EIM division were 58% (H1 2015: 61%) decreasing slightly due to an improvement in licence sales. Adjusted EBITDA for the EIM business increased to GBP1.2m (H1 2015: (GBP0.17m)). EBITDA margin increased to 17% (H1 2015: (3%)) reflecting the restructuring in the division carried out in 2015 and organic revenue growth in the period.

The Grants division saw double digit revenue growth in the period of 18%. The Compliance division had a decrease in revenues from GBP3.5m to GBP2m due to a change in sales mix. There was initial revenue contribution in the period from Reading Room of GBP4.5m.

Profit before tax

Adjusted EBITDA increased 42% to GBP10.1m (H1 2015: GBP7.1m). Cost of sales increased 16% excluding acquisitions with part of this increase due to higher election print costs on the prior period. Administrative expenses increased by 10% to GBP25.2m (H1 2015: GBP22.9m) or excluding acquisitions decreased by 10%. Staff costs increased by 15% to GBP17.4m (H1 2015: GBP15.1m) or excluding acquisitions decreased by 9% due to the restructuring carried out in the EIM division in 2015.

Finance income decreased to GBP0.03m (H1 2015: GBP0.59m) as the prior period includes GBP0.4m of exchange gain on translation of intercompany balances. Financing costs increased 20% to GBP0.6m (H1 2015: GBP0.5m) and includes interest payable of GBP0.42m (H1 2015: GBP0.36m).

Adjusted profit before tax and adjusted earnings per share are alternative performance measures, considered by the Board to be a better reflection of true business performance than looking at the Group's results on a statutory basis only. These measures are widely used by research analysts covering the company. A full reconciliation between underlying profit and the profit attributable to shareholders is provided in the following table:

 
 
 
                                             6 months to       6 months     12 months 
                                                                     to            to 
                                           30 April 2016       30 April    31 October 
                                                                   2015          2015 
                                             (unaudited)    (unaudited)     (audited) 
 Adjusted profit before tax                       GBP000         GBP000        GBP000 
 
 Profit before tax for the period                  6,536          3,062         9,763 
 Add back: 
 Amortisation on acquired intangibles              1,782          2,016         3,778 
 Acquisition credits                               (668)          (143)          (34) 
 Restructuring costs                                 209            841         1,025 
                                        ----------------  -------------  ------------ 
 Adjusted profit for the period                    7,859          5,776        14,532 
                                        ----------------  -------------  ------------ 
 

Reported profit before tax increased 110% to GBP6.5m (H1 2015: GBP3.1m). Restructuring charges of GBP0.2m (H1 2015: GBP0.8m) relates to the integration of Reading Room. Acquisition credits of GBP0.7m include GBP0.7m income relating to an adjustment to the final consideration for Cloud Amber.

The Group continues to invest in developing innovative technology solutions and has incurred capitalised Research and Development costs of GBP0.97m (H1 2015: GBP0.42m). Research and Development costs expensed in the period were GBP1.7m (H1 2015: GBP2.5m).

Taxation

The Group's effective tax rate for the period was 7% compared to 20% for 2015. The decrease in the effective rate of tax is a result of four main factors; large share option exercises in the period, the write-off of an element of deferred consideration, the decrease in the deferred tax rate to 18% and repayment of tax following amended FY13 R&D claims. Unrelieved trading losses of GBP2.7m from overseas, mainly in the US, remain available to offset against future taxable trading profits in the relevant jurisdictions. The Board believes that the Group will benefit from these tax losses in the future.

Earnings per share and dividends

Adjusted earnings per share increased to 1.97p (H1 2015 restated: 1.26p). Diluted adjusted earnings per share increased to 1.85p (H1 2015 restated: 1.23p).

Basic earnings per share increased to 1.71p (H1 2015: 0.65p). Diluted earnings per share increased to 1.61p (H1 2015: 0.64p).

The Board proposes an interim dividend of 0.35p. The interim dividend will be paid on 19 October 2016 to shareholders on the register at 7 October 2016.

Balance sheet and cashflows

The Group's balance sheet continued to strengthen during the period and at 30 April 2016 net assets were GBP59.0m compared to GBP48.8m at 30 April 2015.

Cash generated from operating activities before tax as a percentage of Adjusted EBITDA was 145% (H1 2015: 149%).

The Group ended the period with net debt of GBP13.9m (H1 2015: GBP9.7m; 31 October 2015: GBP23.2m), after utilising the facility for the acquisition of Cloud Amber (GBP3.75m) and Reading Room (GBP5.6m) since H1 2015. The Group's total signed debt facilities at 30 April 2016 stood at GBP37.5m, a combination of a GBP14.5m term loan and GBP23m revolving credit facility, split GBP23.4m the Royal Bank of Scotland and GBP14.1m Silicon Valley Bank.

Deferred income, representing invoiced maintenance and SaaS contracts yet to be recognised in revenue, stood at GBP20.6m at 30 April 2016 (H1 2015: GBP19.7m). Accrued income, representing future cash flows, increased to GBP15.1m (H1 2015: GBP9.1m; 31 October 2015: GBP13.2m). The increase in accrued income since year end is attributable to an increase from the Scottish Government eCount project (GBP1.2m) and the EU Referendum work (GBP0.6m).

Jane Mackie

Chief Financial Officer

6 June 2016

Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 April 2016

 
 
                                                     6 months        6 months      12 months 
                                                        to 30              to             to 
                                                        April 
                                                         2016 
                                                  (unaudited)        30 April     31 October 
                                                                         2015           2015 
                                                       GBP000     (unaudited)      (audited) 
                                         Note                          GBP000         GBP000 
 Revenue                                    3          37,209          29,581         62,575 
 Cost of sales                                        (4,907)         (3,638)        (6,684) 
                                               --------------  --------------  ------------- 
 Gross margin                                          32,302          25,943         55,891 
 Administrative expenses                             (25,164)        (22,959)       (45,347) 
                                               --------------  --------------  ------------- 
 Operating profit                                       7,138           2,984         10,544 
--------------------------------------  -----  --------------  --------------  ------------- 
 Analysed as: 
 Earnings before depreciation, 
  amortisation, restructuring 
  costs, acquisition costs, corporate 
  finance costs and share option 
  costs                                                10,132           7,142         18,215 
 Depreciation                                           (241)           (383)          (785) 
 Amortisation                                         (2,847)         (2,790)        (5,480) 
 Restructuring costs                                    (209)           (841)        (1,025) 
 Acquisition credits                                      668             143             34 
 Corporate finance costs                                  (8)               1              - 
 Share option costs                                     (357)           (288)          (415) 
--------------------------------------  -----  --------------  --------------  ------------- 
 Finance income                                            27             586            445 
 Finance costs                                          (629)           (508)        (1,226) 
                                               --------------  --------------  ------------- 
 Profit before taxation                                 6,536           3,062          9,763 
                                               --------------  --------------  ------------- 
 Income tax expense                         4           (458)           (748)        (1,934) 
                                               --------------  --------------  ------------- 
 Profit for the period                                  6,078           2,314          7,829 
 
 Other comprehensive income 
  for the period 
 Items that will be reclassified 
  subsequently to profit or loss: 
 Exchange gains/(losses) on 
  retranslation of foreign operations                     120           (435)          (276) 
                                               --------------  --------------  ------------- 
 Other comprehensive income 
  for the period, net of tax                              120           (435)          (276) 
                                               --------------  --------------  ------------- 
 Total comprehensive income 
  for the period attributable 
  to owners of the parent                               6,198           1,879          7,553 
                                               ==============  ==============  ============= 
 
 Earnings per share attributable 
  to owners of the parent during 
  the period 
 Basic earnings per share                   5           1.71p           0.65p          2.21p 
 Diluted earnings per share                 5           1.61p           0.64p          2.10p 
 

The accompanying notes form an integral part of these financial statements.

Consolidated Interim Balance Sheet

At 30 April 2016

 
                                                  At             At            At 
                                            30 April       30 April    31 October 
                                                               2015          2015 
                                                2016       restated     (audited) 
                                         (unaudited)    (unaudited)        GBP000 
                                              GBP000         GBP000 
 ASSETS 
 Non-current assets 
 Property, plant and equipment                 1,041            777         1,077 
 Intangible assets                            74,174         65,270        74,812 
 Deferred tax assets                           1,841          1,996         1,649 
 Other receivables                             5,631          2,550         4,956 
 Total non-current assets                     82,687         70,593        82,494 
 
 Current assets 
 Trade and other receivables                  30,771         24,395        26,713 
 Cash and cash equivalents                    11,402          9,005         4,084 
 Total current assets                         42,173         33,400        30,797 
                                       -------------  -------------  ------------ 
 Total assets                                124,860        103,993       113,291 
                                       -------------  -------------  ------------ 
 
 LIABILITIES 
 Current liabilities 
 Trade and other payables                      7,561          5,767         7,109 
 Other liabilities                            27,610         25,455        19,083 
 Provisions                                       33             23            29 
 Current tax                                   1,713          1,543         1,815 
 Borrowings                                    3,547          4,447         2,428 
                                       -------------  -------------  ------------ 
 Total current liabilities                    40,464         37,235        30,464 
                                       -------------  -------------  ------------ 
 
 Non-current liabilities 
 Deferred tax liabilities                      3,607          3,644         4,357 
 Borrowings                                   21,750         14,274        24,831 
                                       -------------  -------------  ------------ 
 Total non-current liabilities                25,357         17,918        29,188 
                                       -------------  -------------  ------------ 
 Total liabilities                            65,821         55,153        59,652 
                                       -------------  -------------  ------------ 
 Net assets                                   59,039         48,840        53,639 
                                       =============  =============  ============ 
 
 EQUITY 
 Called up share capital                       3,622          3,587         3,587 
 Capital redemption reserve                    1,112          1,112         1,112 
 Share premium account                        12,291         11,741        11,741 
 Treasury reserve                            (1,258)        (1,271)       (1,271) 
 Shares option reserve                         1,985          1,772         1,900 
 Merger reserve                                1,294          1,294         1,294 
 ESOP trust                                    (260)          (239)         (242) 
 Foreign currency translation 
  reserve                                      (118)          (397)         (238) 
 Retained earnings                            40,371         31,241        35,756 
                                       -------------  -------------  ------------ 
 Total equity                                 59,039         48,840        53,639 
                                       =============  =============  ============ 
 

The accompanying notes form an integral part of these financial statements.

Consolidated Interim Statement of Changes in Equity

For the six months ended 30 April 2016

 
                                                                                                     Foreign 
                    Called       Capital      Share                                                 currency 
                        up    redemption    premium    Treasury             Merger      ESOP   retranslation    Retained 
                     share       reserve    account     reserve            reserve     trust         reserve    earnings     Total 
                   capital        GBP000     GBP000      GBP000             GBP000    GBP000          GBP000      GBP000    GBP000 
                    GBP000 
 Balance at 1 
  November 
  2014 
  (audited)          3,587         1,112     11,741     (1,001)   1,636      1,294     (213)              38      30,396    48,590 
 Share options 
  granted                -             -          -           -     182          -         -               -           -       182 
 Transfer on 
  exercise 
  of share 
  options                -             -          -           -    (46)          -         -               -           -      (46) 
 Purchase of 
  treasury 
  shares                 -             -          -       (270)       -          -         -               -           -     (270) 
 Deferred tax 
  movement 
  on share 
  options                -             -          -           -       -          -         -               -          43        43 
 Equity 
  dividends 
  paid                   -             -          -           -       -          -         -               -     (1,512)   (1,512) 
 ESOP trust              -             -          -           -       -          -      (26)               -           -      (26) 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 Transactions 
  with 
  owners                 -             -          -       (270)     136          -      (26)               -     (1,469)   (1,629) 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 Profit for the 
  period                 -             -          -           -       -          -         -               -       2,314     2,314 
 Other 
  comprehensive 
  income 
  Exchange 
  losses on 
  retranslation 
  of foreign 
  operations             -             -          -           -       -          -         -           (435)           -     (435) 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 Total 
  comprehensive 
  income for 
  the period             -             -          -           -       -          -         -           (435)       2,314     1,879 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 At 30 April 
  2015 
  (unaudited)        3,587         1,112     11,741     (1,271)   1,772      1,294     (239)           (397)      31,241    48,840 
                 =========  ============  =========  ==========  ======  =========  ========  ==============  ==========  ======== 
 Share options 
  granted                -             -          -           -     128          -         -               -           -       128 
 Deferred tax 
  movement 
  on share 
  options                -             -          -           -       -          -         -               -         156       156 
 ESOP trust              -             -          -           -       -          -       (3)               -           -       (3) 
 Equity 
  dividends 
  paid                   -             -          -           -       -          -         -               -     (1,156)   (1,156) 
 Transactions 
  with 
  owners                 -             -          -           -     128          -       (3)               -     (1,000)     (875) 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 Profit for the 
  period                 -             -          -           -       -          -         -               -       5,515     5,515 
 Other 
  comprehensive 
  income 
  Exchange 
  gains on 
  retranslation 
  of foreign 
  operations             -             -          -           -       -          -         -             159           -       159 
 Total 
  comprehensive 
  income for 
  the period             -             -          -           -       -          -         -             159       5,515     5,674 
                 ---------  ------------  ---------  ----------  ------  ---------  --------  --------------  ----------  -------- 
 Balance at 31 
  October 
  2015 
  (audited)          3,587         1,112     11,741     (1,271)   1,900      1,294     (242)           (238)      35,756    53,639 
                 =========  ============  =========  ==========  ======  =========  ========  ==============  ==========  ======== 
 
 
                                                                                                        Foreign 
                    Called       Capital      Share                  Share                             currency 
                        up    redemption    premium    Treasury    options     Merger      ESOP   retranslation    Retained 
                     share       reserve    account     reserve    reserve    reserve     trust         reserve    earnings     Total 
                   capital        GBP000     GBP000      GBP000     GBP000     GBP000    GBP000          GBP000      GBP000    GBP000 
                    GBP000 
 Issue of share 
  capital               35             -        550           -          -          -         -               -           -       585 
 Share options 
  granted                -             -          -           -        355          -         -               -           -       355 
 Transfer on 
  exercise 
  of share 
  options                -             -          -          13      (270)          -       (6)               -         259       (4) 
 Equity 
  dividends 
  paid                   -             -          -           -          -          -         -               -     (1,885)   (1,885) 
 Deferred tax 
  movement 
  on share 
  options                -             -          -           -          -          -         -               -         163       163 
 ESOP trust              -             -          -           -          -          -      (12)               -           -      (12) 
                 ---------  ------------  ---------  ----------  ---------  ---------  --------  --------------  ----------  -------- 
 Transactions 
  with 
  owners                35             -        550          13         85          -      (18)               -     (1,463)     (798) 
                 ---------  ------------  ---------  ----------  ---------  ---------  --------  --------------  ----------  -------- 
 Profit for the 
  period                 -             -          -           -          -          -         -               -       6,078     6,078 
 Other 
  comprehensive 
  income 
  Exchange 
  gains on 
  retranslation 
  of foreign 
  operations             -             -          -           -          -          -         -             120           -       120 
 Total 
  comprehensive 
  income for 
  the period             -             -          -           -          -          -         -             120       6,078     6,198 
                 ---------  ------------  ---------  ----------  ---------  ---------  --------  --------------  ----------  -------- 
 At 30 April 
  2016 
  (unaudited)        3,622         1,112     12,291     (1,258)      1,985      1,294     (260)           (118)      40,371    59,039 
                 ---------  ------------  ---------  ----------  ---------  ---------  --------  --------------  ----------  -------- 
 

The accompanying notes form an integral part of these financial statements.

Consolidated Interim Statement of Cash Flows

For the six months ended 30 April 2016

 
                                                 6 months        6 months          12 months 
                                                       to              to                 to 
                                                 30 April        30 April         31 October 
                                                     2016            2015     2015 (audited) 
                                                              (unaudited) 
                                              (unaudited)          GBP000             GBP000 
                                                   GBP000 
 Cash flows from operating 
  activities 
 Profit for the period before 
  taxation                                          6,536           3,062              9,763 
 Adjustments for: 
 Depreciation                                         241             383                785 
 Amortisation                                       2,847           2,790              5,480 
 Acquisition credits                                (722)               -              (156) 
 Finance income                                      (27)           (118)              (135) 
 Finance costs                                        462             446                892 
 Debt issue costs amortisation                         50              50                100 
 Share option costs                                   356             182                309 
 Movement in receivables                          (4,549)         (5,938)            (7,070) 
 Movement in payables                               9,438           9,764              (225) 
                                            -------------  --------------  ----------------- 
 Cash generated by operations                      14,632          10,621              9,743 
 Tax on profit paid                               (1,337)           (920)            (1,670) 
 Net cash from operating activities                13,295           9,701              8,073 
 Cash flows from investing 
  activities 
 Acquisition of subsidiaries                            -               -            (9,350) 
 Cash acquired on acquisition 
  of subsidiaries                                       -               -                433 
 Purchase of property, plant 
  & equipment                                       (274)           (226)              (559) 
 Purchase of intangible assets                    (1,980)           (752)            (1,826) 
 Finance income                                        27             118                135 
 Net cash used in investing 
  activities                                      (2,227)           (860)           (11,167) 
 Cash flows from financing 
  activities 
 Interest paid                                      (445)           (230)              (579) 
 New loans                                          2,000           2,000             13,000 
 Loan related costs                                  (42)            (89)              (178) 
 Loan repayments                                  (4,011)         (5,019)            (7,538) 
 Equity dividends paid                            (1,885)         (1,512)            (2,668) 
 Purchase of own shares                              (18)           (342)              (344) 
 Sale of own shares                                   585               -                  - 
                                            -------------  --------------  ----------------- 
 Net cash flows used in financing 
  activities                                      (3,816)         (5,192)              1,693 
 Net movement on cash and 
  cash equivalents                                  7,252           3,649            (1,401) 
 Cash and cash equivalents 
  at the beginning of the period                    4,084           5,855              5,855 
 Exchange gains/(losses) on 
  cash and cash equivalents                            66           (499)              (370) 
 Cash and cash equivalents 
  at the end of the period                         11,402           9,005              4,084 
                                            =============  ==============  ================= 
 

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 2016

   1.   GENERAL INFORMATION 

Idox plc is a supplier of specialist information management solutions to the public sector and to highly regulated asset intensive industries around the world in the wider corporate sector. The company is a public limited company which is quoted on the Alternative Investment Market and is incorporated and domiciled in the UK. The address of its registered office is 1310 Waterside, Arlington Business Park, Theale, Reading, RG7 4SA. The registered number of the company is 03984070.

   2.     BASIS OF PREPARATION 

The financial information for the period ended 30 April 2016 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 2015 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unmodified 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 2016. The Group financial statements for the year ended 31 October 2015 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.

Restatement of comparatives

The Group have restated the consolidated balance sheet for 2015 to reflect a change in the amounts recoverable on contracts which are receivable in greater than one year. Amounts recoverable on contracts are included in trade and other receivables and represent revenue recognised in excess of payments on account. The Group have classified GBP641k from current assets to non-current assets following a review of 2015 balances.

The Group have revised the adjusted earnings per share calculation to conform to common practice within the industry. The calculation now adjusts for amortisation on acquired intangibles, acquisition costs, restructuring costs and the tax effect on these. This was first applied in the Group's statutory financial statements for the year ended 31 October 2015. The impact of this is a reduction in the period to 30 April 2015 adjusted EPS from 1.49p to 1.26p and a reduction in the adjusted diluted EPS from 1.46p to 1.23p.

   3.     SEGMENTAL ANALYSIS 

In previous periods, the Group was organised into two main operating segments. Following the acquisition and integration of Cloud Amber Limited and Reading Room Limited and an internal reorganisation the operating segments were revised. As at 30 April 2016 the Group is primarily organised into five operating segments, which are detailed below. Segmental analysis for the comparative period to 30 April 2015 has been restated to show results for all five business segments.

Financial information is reported to the chief operating decision maker, which comprises the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, monthly on a business unit basis with revenue and operating profits split by business unit. Each business unit is deemed an operating segment as each offers different products and services.

-- Public Sector Software (PSS) - delivering specialist information management solutions and services to the public sector

-- Engineering Information Management (EIM) - delivering engineering document management and control solutions to asset intensive industry sectors

   --       Grants (GRS) - delivering funding solutions to private and third sector customers 

-- Compliance (COMP) - delivering compliance solutions to corporate, public and commercial customers

-- Reading Room (RR) - delivering digital consultancy services to public, private and third sector 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 revenues by geographic location were as follows:

 
                                       6 months   6 months 
                                          to 30      to 30 
                                          April      April 
                                           2016       2015 
                                         GBP000     GBP000 
 Revenues from external customers: 
 United Kingdom                          27,677     19,569 
 North America                            2,929      3,205 
 Europe                                   5,692      6,179 
 Australia                                  459        240 
 Rest of World                              452        388 
                                      ---------  --------- 
                                         37,209     29,581 
                                      =========  ========= 
 

The segment results for the 6 months to 30 April 2016 were:

 
 
 
                                                       PSS         EIM         GRS        COMP          RR      Total 
                                                   GBP'000     GBP'000     GBP'000     GBP'000     GBP'000     GBP000 
 
 Revenue                                            20,526       6,751       3,467       1,985       4,480     37,209 
                                                ----------  ----------  ----------  ----------  ----------  --------- 
 
   Profit before interest, tax, depreciation, 
   amortisation, share option costs, 
   acquisition costs and restructuring costs         7,908       1,175         556       (189)         682     10,132 
                                                ----------  ----------  ----------  ----------  ----------  --------- 
 
   Adjusted segment operating profit                 6,409         499         343       (387)         306      7,170 
                                                ----------  ----------  ----------  ----------  ----------  --------- 
 Finance income                                                                                                    27 
 Finance costs                                                                                                  (629) 
 Unallocated corporate finance costs                                                                             (32) 
                                                ----------  ----------  ----------  ----------  ----------  --------- 
 Profit before Tax                                                                                              6,536 
                                                ----------  ----------  ----------  ----------  ----------  --------- 
 

The segment results for the 6 months to 30 April 2015 (restated) were:

 
 
 
                                                PSS         EIM         GRS        COMP          RR      Total 
                                            GBP'000     GBP'000     GBP'000     GBP'000     GBP'000     GBP000 
 
 Revenue                                     16,979       6,150       2,928       3,524           -     29,581 
                                         ----------  ----------  ----------  ----------  ----------  --------- 
 
   Profit before interest, tax, 
   depreciation, 
   amortisation, share option costs, 
   acquisition costs and restructuring 
   costs                                      6,206       (171)         525         582           -      7,142 
                                         ----------  ----------  ----------  ----------  ----------  --------- 
 
   Adjusted segment operating profit          3,802     (1,164)          63         282           -      2,983 
                                         ----------  ----------  ----------  ----------  ----------  --------- 
 Finance income                                                                                            586 
 Finance costs                                                                                           (508) 
 Unallocated corporate finance costs                                                                         1 
                                         ----------  ----------  ----------  ----------  ----------  --------- 
 Profit before Tax                                                                                       3,062 
                                         ----------  ----------  ----------  ----------  ----------  --------- 
 
 
 
   4.     TAX ON PROFIT ON ORDINARY ACTIVITIES 
 
                                         6 months             6 months      12 months 
                                               to                   to             to 
                                         30 April             30 April     31 October 
                                 2016 (unaudited)     2015 (unaudited)           2015 
                                           GBP000               GBP000      (audited) 
                                                                               GBP000 
 Current tax 
 Corporation tax on profits 
  for the period                            1,355                1,140          2,310 
 Foreign tax on overseas 
  companies                                   184                  333            498 
 Over provision in respect 
  of prior periods                          (334)                  (4)          (259) 
                              -------------------  -------------------  ------------- 
 Total current tax                          1,205                1,469          2,549 
                                                   -------------------  ------------- 
 
 Deferred tax 
 Origination and reversal 
  of timing differences                     (550)                (759)          (555) 
 Adjustment for rate change                 (195)                   38              - 
 Adjustments in respect 
  of prior periods                            (2)                    -           (60) 
                              -------------------  -------------------  ------------- 
 
 Total deferred tax                         (747)                (721)          (615) 
                              -------------------  -------------------  ------------- 
 Total tax charge                             458                  748          1,934 
                              -------------------  -------------------  ------------- 
 
 

Unrelieved trading losses of GBPnil in the UK and GBP2,699,000 overseas remain available to offset against future taxable trading profits (excluding unrecognised overseas losses of GBP139,000).

   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 
                                         2016     2015 restated          2015 
                                  (unaudited)       (unaudited)     (audited) 
                                       GBP000            GBP000        GBP000 
 
   Profit for the period                6,078             2,314         7,829 
 
   Basic earnings per share 
 Weighted average number 
  of shares in issue              356,283,980       354,847,015   354,730,817 
 
 Basic earnings per share               1.71p             0.65p         2.21p 
                                -------------  ----------------  ------------ 
 
 
   Diluted earnings per share 
 Weighted average number 
  of shares in issue used 
  in basic earnings per share 
  calculation                     356,283,980       354,847,015   354,730,817 
 Dilutive share options            21,691,469         8,695,769    17,234,828 
                                -------------  ----------------  ------------ 
 Weighted average number 
  of shares in issue used 
  in dilutive earnings per 
  share calculation               377,975,449       363,542,784   371,965,645 
 
 Diluted earnings per share             1.61p             0.64p         2.10p 
                                -------------  ----------------  ------------ 
 
 
 
 
                                     6 months          6 months     12 months 
                                           to                to            to 
                                     30 April          30 April    31 October 
                                         2016     2015 restated          2015 
                                  (unaudited)       (unaudited)     (audited) 
 Adjusted earnings per share           GBP000            GBP000        GBP000 
 
 Profit for the period                  6,078             2,314         7,829 
 
 Add back: 
 Amortisation on acquired 
  intangibles                           1,782             2,016         3,778 
 Acquisition credits                    (668)             (143)          (34) 
 Restructuring costs                      209               841         1,025 
 Tax effect                             (398)             (571)         (961) 
                               --------------  ----------------  ------------ 
 Adjusted profit for the 
  period                                7,003             4,457        11,637 
                               --------------  ----------------  ------------ 
 
 Adjusted basic earnings 
  per share                             1.97p             1.26p         3.28p 
 Adjusted diluted earnings 
  per share                             1.85p             1.23p         3.13p 
 
   6.    DIVIDS 

During the period a dividend was paid in respect of the year ended 31 October 2015 of 0.525p per ordinary share at a total cost of GBP1,885,000 (2014: 0.425p, GBP1,512,000).

A dividend of 0.35p per ordinary share at a total cost of GBP1,267,000 has been proposed in respect of the interim period ended 30 April 2016 (H1 2015: 0.325p, GBP1,156,000).

   7.     ACQUISITIONS 

Cloud Amber Limited

During the period the contingent consideration was adjusted from GBP1,200,000 to GBP478,000. The reduction was a result of missing the revenue target as set out in the Share Purchase Agreement. At the reporting date, management's best estimate is that the adjusted contingent consideration will be payable. The adjustment of GBP722,000 is included in 'Acquisition credits' in the Consolidated Interim Statement of Comprehensive Income.

Reading Room Limited

During the period there have been several fair value adjustments in respect of the acquisition of Reading Room Limited on 8th October 2015. The adjustments totalled GBP414,000.

A number of adjustments were processed to align company policies with Idox Group policies. These included GBP238,000 in respect of intangible assets, GBP71,000 in respect of property, plant and equipment, GBP12,000 in respect of the bad debt provision, GBP193,000 in respect of deferred income and GBP74,000 in respect of accruals.

Independent Review Report to Idox plc

For the six months ended 30 April 2016

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 2016 which comprises the Consolidated Interim Statement of Comprehensive Income, the Consolidated 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, Chairman's and Chief Executive's Statement and Chief Financial Officer's Review and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the financial information in the half-yearly financial report are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

As disclosed in Note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The financial information in the half-yearly financial report has been prepared in accordance with the basis of preparation in Note 2.

Our responsibility

Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 April 2016 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 2.

GRANT THORNTON UK LLP

Statutory Auditor, Chartered Accountants

London

6 June 2016

This information is provided by RNS

The company news service from the London Stock Exchange

END

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