Ideagen Share Discussion Threads

[glasshalfull] 02/2/2015 23:40

Header updated tonight to reflect finnCaps increased targets following H1 results announced last week & on back of last months earnings enhancing Gael acquisition.

25% earnings growth factored in this year (2.1p EPS) and 31% growth in 2015/16 (2.7p EPS) for PER in 2015/16 of 14.5 & PEG of 0.5 ... & a core holding for me.

Regards,
GHF

[pj 1] 29/1/2015 08:31

WELL! what can I say?

What a perfect example of the current difficult markets.

Whilst on the w/l I fully expeced a 10%+ hike this morning after that update. L2 inconclusive.

I note the company is putting itself about though regularly with PI presentations.

[battlebus2] 29/1/2015 07:42

Ditto GHF....

[glasshalfull] 29/1/2015 07:39

Interims out.

Historic feel to them folowing the major Gael acquisition post period.

Importantly strong outlook; great recurring revenues at 86% of turnover and maintenance contract renewals coming in at an astonishing 97%.

@Glasshalfull1: IDEA @Ideagen_Plc Strong H1 Recur revs 86% On target for 20% EPS growth in 2015 & 30% next. Positive outlook #TMFPP

We should see the first inclusion of Gael in H2 & main benefit from 2015/16 when earnings will accelerate to 30% for the enlarged business that translates to 2.7p EPS.

Delighted to hold for the long term. Great company, great management.
I'll update header later with new forecasts on back of updated broker info.

Regards
GHF

[hutch_pod] 24/12/2014 08:04

Paul Scott comment.

[pj 1] 19/12/2014 22:55

Ideagen supplies management software to customers involved in transport, life sciences and healthcare
A Scottish software firm has been taken over, with the prospect of expanding its workforce as it reaches new markets.

Gael, based in East Kilbride, has been bought by Ideagen, a Nottingham company listed on the London Stock Exchange's Alternative Investment Market.

The Lanarkshire firm has 105 staff, and plans to take on a further 30 in the new year. It has been bought for £18m, and will continue to operate as a separate entity from its new owner.

The chairman of Gael's board is Jim Mather, the former SNP finance minister and a successful IT entrepreneur before being elected. He will continue in that role.

Gael is a specialist supplier of management software to handle compliance, safety, risk and performance. It sells to 2500 customers involved in transport, manufacturing, life sciences, healthcare and energy.

These include Emirates, Virgin Rail, UK NHS, G4S, Terex and Dairy Crest.

Ideagen is a supplier of management software in healthcare and energy, with operations in the US among other markets.

Technology and services
It has 145 staff, and does not compete directly with Gael, limiting the risk of jobs being cut because of overlapping roles.

Gael CEO, Ashley Marron, stated: "All of this dramatically upgrades our capability to deliver the very best technology and services that help our customers achieve operational excellence, assure compliance, strengthen their reputation and brand, and prevent undesirable events.

"Our customers want to deliver high performance people, processes and organisations. We've just made a step change in our ability to help them achieve that."

He said the company has been considering options for expansion over the past two years. It had discussed investment by private equity firms, and started talks with Ideagen in July, as this would give it access to raising funds through public markets.

David Hornsby, CEO of Ideagen, commented: "We believe the combination of Gael and Ideagen will enable the enlarged group to rapidly develop new applications, and provides an outstanding opportunity to leverage the growing risk and compliance market."

[jaws6] 19/12/2014 07:00

GHF
Thanks for info.
Did see from note looks good reading is Gael looks a good fit with Ideagen.
and Gael has 130 NHS customers, and provides it with a strong entry into the aviation sector - Gael’s 300 airline customers include the likes of Emirates.

[glasshalfull] 18/12/2014 11:01

Respected TechMarketView comment:-

Ideagen to gain scale with Gael

Ideagen is on the acquisition trail again but this time it’s set its sights on a more substantial purchase. The SME, which supplies information management software to highly regulated organisations, looks set to buy Gael, a supplier of governance, risk and compliance (GRC) software to the healthcare, manufacturing and aviation sectors, for a net cash consideration of £18m (the total consideration is £21m). Ideagen is funding the purchase via a ‘heavily oversubscribed’; placing that is set to raise £17.5m.

Gael is a similar size to Ideagen and has sound financials. It generated revenues of £8m in its last FY (to end Dec ’13) with a PBT of £1.4m, and is expected to deliver revenues of c£9m in FY14. In comparison, Ideagen turned over £9m in the year to the end of April 2014 with a PBT of £2.6m (see Ideagen’s organic growth boosted by NHS business). Both organisations are growing nicely organically – Gael has enjoyed 14% compound annual organic revenue growth between 2011 and 2014 and has recurring revenues of c£4.5m.

By bringing Gael into the fold, Ideagen will immediately gain scale, strengthen its management team (the CEO is staying on) and marketing capability, and add over 1000 customers to the Group. Just as importantly, Gael brings with it strong IP in the GRC area, enhancing Ideagen’s risk management proposition. The acquisition strengthens Ideagen’s position in the healthcare and manufacturing sectors (Gael has 130 NHS customers), and provides it with a strong entry into the aviation sector - Gael’s 300 airline customers include the likes of Emirates.

All things considered, Gael looks a good fit with Ideagen and very much in keeping with the latter’s strategy of acquiring businesses with strong IP and recurring revenues, in complementary markets. But this is a sizable acquisition – more of a merger of equals – which brings its own challenges. So far, Ideagen appears to be handling its rapid expansion via its ‘buy and build’ strategy admirably but the risks of quick expansion involving the integration of numerous acquisitions remain.


Regards,
GHF

[glasshalfull] 18/12/2014 10:10

As mentioned in my earlier update this morning, I expected an upgrade to EPS estimates.

finnCap have revised forecasts suggesting +5% upgrade to the current year & +17% upgrade the following year. That moves earnings from 2.0p to 2.1p EPS in the current year (25% EPS growth) & from 2.3p to 2.7p EPS (31% EPS growth in 2015/16).

Summary of the finnCap update with raised price target:-

Ideagen has announced the £18m acquisition(£3.2m deferred) of Gael Ltd, a Scottish governance risk and compliance (GRC) specialist software provider, alongside a £17.5m placing at 34p. Gael is a direct competitor to Ideagen in the fragmented GRC market, and will enable Ideagen to broaden its customer base, strengthen its solution set, and gain yet further scale and credibility with customers. We lift forecasts to accommodate the revenue addition, with a part-year contribution to FY15 EBITDA (+14%) and +58% in FY16.

Subject to General Meeting on 7th January, Ideagen will acquire Gael and in doing so acquire a well-regarded business with high-quality software and an impressive client base.

Gael is a direct competitor for Ideagen in provision of governance, risk and compliance (GRC) software, and a complementary service provider in the NHS, verticals typified by high consequences of controls failure, and board culpability. By ensuring general ISO and industry specific standards are met, Ideagen’s software focuses on the key verticals of healthcare, complex manufacturing, banking and finance, and energy; and Gael brings further expertise in healthcare and complex manufacturing as well as aviation and rail, with an impressive roster of household name customers.

The deal brings revenue synergy through improvement of the aggregated software and skill set, and software delivery alternatives: unlike Ideagen, Gael software can be cloud or on-premise delivered. Cost savings from product consolidation, marketing efficiency, and de-duplication, add to the further intangible benefits of industry and investor perception of enhanced scale.

Gael delivered EBITDA of £1.6m from £8m revenue in FY13 (Dec y/e). With the benefit of synergies and growth, we apportion a run rate contribution of £0.5m in FY15 (Ideagen April y/e) and lift FY16 EBITDA £2.3m (+58%), from +£8.5m revenue (+64%).


Regards,
GHF

[yump] 18/12/2014 08:34

Looks very good and logical.

Crikey I might actually have found a company that makes acquisitions on the basis of business sense, not egos. Whatever next ! o/t hoping LBB does the same.

[cheshire man] 18/12/2014 08:28

Think we're all happy to be holding IDEA :-0))

[glasshalfull] 18/12/2014 07:34

Excellent acquisition as per my tweet.

@Glasshalfull1: IDEA - @Ideagen_Plc - Fantastic acquisition of main competitor in GRC area. Expect significant EPS upgrades #TMFPP

Acquired their no.1 competitor in the GRC space. Fantastic products & iP not to mention enviable recurring revenue stream.

Gael have a great client base & for example won £1m+ order with HAECO in Oct 2014.

Well done DH & team!

Regards
GHF

[battlebus2] 18/12/2014 07:23

Yep agree, no stopping these guys :))

[chizgreen68] 18/12/2014 07:18

Looks like a terrific acquisition, recurring rev, earnings enhancing, cross sell, reasonable price etc.

[battlebus2] 13/11/2014 10:40

Finn cap reiterates their 50p price target.

[battlebus2] 13/11/2014 08:21

Thanks GHF..

[glasshalfull] 13/11/2014 08:19

Per my tweet


@Glasshalfull1: IDEA @Ideagen_Plc T/S indicating "significant" growth. On target to grow EPS 20%+ (6yr of profitable growth). Well done to DH & team #TMFPP

Regards,
GHF

[kemche] 09/11/2014 15:32

GHF,
Thank you for the post - much appreciated. One to be tucked away I think.

[blueball] 07/11/2014 10:16

Ready for the next leg-up..?

[battlebus2] 05/11/2014 17:48

Indeed CM. Travel arrangements made so looking forward.

[hutch_pod] 05/11/2014 15:08

Exciting development today. I had been pretty much NHS focused wrt contract wins.

[cheshire man] 05/11/2014 13:45

Will look forward to you're feedback bb :-)

[cheshire man] 05/11/2014 09:55

Would love to attend but unable to unfortunately :-( encouraging announcement here this morning :-)

Nice looking chart here IMO