Ideagen Share Discussion Threads

[battlebus2] 15/1/2014 08:22

Excellent update GHF and only reinforces my view and why i bought more yesterday.
My long term target is still 50p. Moving up again this morning.

[glasshalfull] 14/1/2014 23:25

Hope you don't mind me returning the thread back to the discussion of IDEA :-)

I've now had opportunity to digest the results. They've delivered as previously flagged and as I mooted earlier, today's price reaction is simply to be expected on the back of a strong run IMHO.

Couple of snippets worth highlighting;

* NHS sector generated strong organic growth of 49% - simply stunning!

* Strong recurring revenues - "...invested in additional resources to manage the customer base resulting in a maintenance and support renewal rate of 96%.
Recurring revenues now represent 54% of our software and services revenue and cover 86% of the fixed cost base."

From my notes recurring revenue at 2013 year end represented 45% of total revenues which was up from 38% on admission to AIM 12 months ago...and as per today's announcement has now risen further to 54%.

Checking back I also note that recurring revenues are up from 80% at 2013 year end to 86% of the fixed cost base per H1 2014 results. So the company is making excellent progress here.

* Increase in receivables - they note a number of contracts were closed in September and October & higher cash collection in H2 2013 has resulted in lower cash generation. I'm aware that that this is simply a timing issue and IDEA confirm this noting strong cash generation in Q3 2014. I've absolutely no worries here.

* Plenty of growth to go for, especially in NHS sector - only 20% of 192 NHS trusts have implemented a Patient Information Repository. IDEA have 8 of these & indicate a strong pipeline of opportunities.

* Outlook bullish - CEO maintains confidence in outlook for the rest of the year.

In conclusion I'm v pleased with the results. I'd previously mentioned on this thread that the EPS comparisons would be impacted with equity raised in Dec 2012 and which have only recently, and partially, been put to use in the recent acquisitions of MSS and Pentana (after period end) both of which are yet to contribute to earnings growth.

Therefore I fully expected a H2 weighting and today's statement reassures that they will achieve 1.7p EPS in the current year with earnings accelerating & growing +20% the following year.

With multiple opportunities as previously discussed on this thread; maintaining a strong balance sheet with considerable net cash & wonderful recurring revenues alongside the anticipated improvements in working capital movements in H2, I'm very content to be invested here. This has all the hallmarks of a great long term investment.

Well done to DH & team yet again.

Regards,
GHF

[simon gordon] 14/1/2014 18:15

Woody,

On TA I follow: Ichimoku, Candles and Dow Theory. I've looked at some of the indicators you mentioned but they are too fussy for me. I like the Japanese way of looking at the markets, suits my personality.

A Candle book you might like is Felipe Tudela, The Secret Code of Japanese Candlesticks. Some good stuff on philosophy in it.

It's tuff to find many books on Ichimoku, think there are about five in the market. I am finding some Ichimoku YouTube channels very helpful. There are a lot of intricacies in this indicator so seeing people use it live in a market setting helps me understand its subtleties. I think Ichimoku and Candles are a superb way to look at market sentiment, see trends at a glance and hunt for reversals, Dow Theory (patterns) are the icing on the cake.

Fingers (FXD thread) is a chartist who I follow and study, his box ranges and time-target points are fascinating to watch.

But, at the end of the day, it all comes back to the story, chart reading helps find pivot points and I find soothes my mind to manage uncertainty.

[woodcutter] 14/1/2014 18:07

yep read that yump. I tend to follow price action, candlesticks, but thought it might be useful to enhance it by improving my indicators knowledge. I'm okay with trend indicators, EMA's and MACD and MACD divergence, though that's not always a very accurate tool. I tend to follow ADX more these days but would like to get hold of something more general which not only decribes the indicator/oscillator but gives examples of it's usefulness.

Heard decent reports of Tom Demark but he seems to have developed his own indicators which won't be available on standard web site charts so that no use really. CBA developing my own charts.

I figure a lot of it is intuitive i know some of my own decisions are more implicit than explicit.

i guess we can over complicate things. Too many indicators means paralysis by analysis maybe?

WC

[yump] 14/1/2014 17:52

There must be some good ones but having read quite a few books on the various technical indicators and not come across any proper statistically significant backup for them, mine went to the charity shop last year.

As with many things, I think the successful traders will
(a) not tell anyone how they do it
(b) not really know how they do it anyway, because some of it will be intuitive and then back-rationalised using apparent data.

Best book I ever read was the old Madness of Crowds one. There's a lesson here most weeks ;-)

[woodcutter] 14/1/2014 15:24

Thanks sg/steg will take a look.

After reading the heretics of finance i was fascintated by John Murphy's synopsis of the correlation between all markets, sectors etc. I'm now reading his book "intermarket technical analysis." Will report back.

There's something about having the hardback that appeals to me, i've yet to sample the excitement of a kindle. Mrs W has been extolling the virtues for some time now though..........just doesn't look the same on the bookcase somehow!

Just wrapping up on IDEA i looked at the operating profit margin having just got back from taking Woodcutter Junior back to uni and the results were; this year 32% last year 29% so maybe the operation gearing i mentioned in my post 245 isn't as strong as i first thought. Possibly some admin cost shifted into cost of sales this year?

Woody.

emotional finance..............i have been reading off and on for a while now

"behavioural Investing" James Montier.

Montier has worked in the system for a long time and from recollection was given time off from Deutsche Bank to write the book so he's got experience.

It's as much about psychology and human behaviour as investing. typically lots of non finance type events like asking the same question in a different way and getting completely different results. It' a right old tome but very interesting.

I've even tried some of the questions out on Mrs Woodcutter with interesting results, perhaps she's not that bright? keep that quiet.

PUR on the move recently, should've bought more it looked very cheap.......always the way. Hargreave Hale are buyers too.

SG do you know of any good books on the use of indicators MACD, ADX Stochastics etc.

[cheshire man] 14/1/2014 12:51

Stegrego,,,,,,,thanks for that,,,,,,,,,,just downloaded it :-)

[stegrego] 14/1/2014 12:30

Even better - that book is Free to download to a Kindle or Kindle reader it seems....

[simon gordon] 14/1/2014 12:02

Woody,

Yes, a well constructed book with some insightful views.

Read a fab book over Xmas, best I've come across in years:



There are some video interviews with the author on YouTube.

Can't recommend highly enough.

[woodcutter] 14/1/2014 11:27

The chart tells the story, nevertheless there are some very good financial metrics worth noting.

Revenue up 44%
Operating costs up only 17%

That's decent operational gearing

Having said that the Gross margin dropped from 93% to 84% so some positives and negatives there.

fwiw i think the financial metrics look good if they can be maintained going forward but for now the share price is up with events and probably still a little on the high side.

I'll watch with interest and wait for a TA reversal before entering again.

Woody

btw Simon i found the "heretics of finance" a fascinating read thanks for recommending.

[glasshalfull] 14/1/2014 10:44

I'm currently indisposed. Quick glance indicated results inline with forecasts & confidence in outrun for remainder of the year.

Not surprised to see some profit taking, the shareprice has enjoyed a strong run.

I'll comment further once I've spoken with the company or in possession of updated forecasts.

Regards
GHF

[battlebus2] 14/1/2014 10:01

Thanks Simon, a pretty positive article.

[simon gordon] 14/1/2014 09:51

Tech Market View - 14/1/14:

Ideagen benefits from targeted expansion

With its clear focus on information management for regulated industries, Ideagen has found itself a solid niche. Having firmly rooted itself, it has been able to expand the scope of the business into more verticals, notably healthcare and the more recently the financial sector (see the HotViews archive here). The result is strong and repeatable performance, even at an organic level.

For the half year to October 31 2013, revenue was up 43% yoy to £3.7m, with a 16% increase in underlying organic revenue. Profits are not being sacrificed as adjusted EBITDA was up 59% to £1.2m. Operating cost control and cost reductions from the integration of acquisitions led to an increase in the adjusted EBITDA margin, taking it up from 29% in the year ago period to 32%. The only 'but' was lower cash generation because several new contracts were signed in the last two months of the period, although these are expected to generate cash in Q3.

It has been an active period for Ideagen, including completion of the integration of Plumtree and MSS acquisitions, the release of the dart/KW patient information and electronic form solution for the NHS (it has already signed a contact with Central Manchester NHS Trust with other foundation trusts are in the pipeline), and its first business in the UK nuclear sector with the National Nuclear Laboratories (NNL) contact. After the period closed, it acquired audit and risk management solutions supplier Pentana, which will add 350 customers, £1.4m of recurring revenues and an entry point to the financial services sector. What is reassuring is that it is making progress and generating new business outside the healthcare area so is not reliant on a single sector. In addition, the need for governance, risk and compliance is only going to increase in the regulated industries it targets.

[cheshire man] 14/1/2014 09:05

Decent half yearly report and the ususal sell off so will wait to see where the share price ends up before any top up !

[yump] 14/1/2014 08:56

Its an easy share to stay sitting on my hands. Especially with at least 3 others all on the verge of stuff, but not quite getting there, its nice to have a few as 'banks' for 2014.

[kemche] 14/1/2014 08:49

Note that MSS only contributed revenues for 4 months since its purchase in July 13. Pentana was purchased after these results so should add for a period of 5 months to April 14 so the second half weighting of circa 61% to meet full year targets looks easily achievable. And that is at a constant run rate without new orders. As for new orders I think this should help:

dart/KW selected by a number of large foundation trusts expected to generate NHS software revenue growth in H2 and beyond
· Entry into the UK Nuclear sector with contract win at National Nuclear Laboratories (NNL)
· Strong account management and customer retention resulting in support and maintenance contract renewal rate increasing to 96%
· Significant increase in new business pipeline for non-healthcare sectors

Add in savings from back end synergies and the full year targets seem eminently achievable. So tickety-boo is where we are at.
All IMHO/DYOR etc.

[woodcutter] 14/1/2014 08:35

results are decent but not spectacluar. H2 becomes more important for holding the share price where it is imv. Wouldn't be suprised to see a drift down back to 28pish.

Depends where it finishes today. Candlestick patterns don't look too favourable in the short term. I took profits on the shooting star at 34p and a full engulfing candle to the downside today would confirm the likelyhood of further falls.

aimho.

Woody

post note: If there's a positive intraday reversal and it finishes green then that would give a much stronger signal to the upside. Risk reward too much balanced in favour of downside to upside at present.

[yump] 14/1/2014 08:31

There's a lot of trading nowadays, so some folk will sell out on interims on the basis that there won't be any excitement until the pre-final trading statements. If that's a strategy, then why not sell when you know you can get 35p, rather than wait for a statement that has been well-flagged and is unlikely to contain anything further ? Anyone ours is not to reason why.

I hold DGS and its thinly traded. On the day of the positive trading statement last week it was down about 5% very quickly, then ended the day level. The positiveness was known about before though.

So on balance I reckon some folk hold on in the hope of something spectacular on the day, even when most detail is known about beforehand.

[battlebus2] 14/1/2014 08:30

Morning janeann, just added myself ,who knows we may finish positive.

Waiting to hear GHF's view.

[janeann] 14/1/2014 08:19

morning bb2; surprised at the fall; added a few more of these on the basis of the increaseing 2nd half

[battlebus2] 14/1/2014 08:16

Profit takers this morning, results inline but future prospects are better and weighing seems to have increased to second half.

[battlebus2] 08/1/2014 08:21

Yep johnv, from the recent RNS..

Ideagen PLC (AIM: IDEA), a leading supplier of Compliance based Information Management Software to highly regulated industries, will announce results for the six month period ended 31 October 2013 on Tuesday 14 January 2014.

[johnv] 08/1/2014 00:14

According to the hl website interims out next tuesday

[themachine99] 07/1/2014 11:44

The finncap forecast is suggesting fully diluted adjusted earnings of 1.7p this year rising to 2.0p next year. Of course the company may make further acquisitions.