Ideagen Share Discussion Threads

[rivaldo] 07/9/2016 10:00

Moving up towards all-time highs - still some way to go to Finncap's 69p target, which was reiterated yesterday.

[rivaldo] 06/9/2016 10:59

Interesting take from Techmarketview on today's small but it seems intriguing acquisition:



"Tuesday 06 September 2016

Footprint in Central Europe with Ideagen's Logen acquisition

It’s not a material purchase and will not impact revenue or profits this year but Ideagen’s acquisition of Bulgarian based Logen Ltd will provide a beachhead for expansion into Central Europe for the UK HQ’d provider of information management solutions to highly regulated industries, including the public sector.

With Ideagen paying £0.1m now and the same in 12 months (subject to performance goals) and gaining a small company with 5 staff, it is a small beachhead but will allow Ideagen to operate directly within Bulgaria and beyond – Logen is an existing reseller of Ideagen’s Pentana GRC management and risk assessment solution. Today’s move follows its acquisition earlier this month of GRC software provider Covalent which added customers and additional GRC capability.

Ideagen has been acquiring to add functionality to its thriving GRC segment and with the Gael purchase in January 2015, it also added scale (see here). Its pivot from a healthcare based business to a vertically oriented one centered on GRC (c80% of the business) has gone well, with good growth both organically and including acquisitions. In the year to April30 2016 revenue jumped 52% to £21.9m, with a decent boost to the bottom line too: adjusted EBITDA up 57% to £6.3m."

[rivaldo] 02/9/2016 14:19

Nice move up after 1.341m shares went through earlier. Looks like a rollover to me, so maybe the subsequent 26k buy at 55.5p is the reason for the rise.

[rivaldo] 23/8/2016 09:26

Hope so painter!

More good news:



"HAECO Group Rolls Ideagen Enlighten into China & Americas for Global Reporting, Audit & Risk Management
Aug 19, 2016

HAECO Group, the global independent aircraft engineering and maintenance organisation, has expanded its safety and operational performance project with software firm Ideagen by rolling Ideagen Enlighten out into its China and Americas operations.

The Hong Kong-based organisation – which employs around 17,000 staff globally – is working with Ideagen’s cloud-based software product Enlighten to successfully achieve group-wide visibility of performance and safety operations.

Ideagen’s Enlighten software was implemented and rolled out to three HAECO sites initially – HAECO and HAESL (a joint venture with Rolls Royce) in Hong Kong and HAECO Xiamen in China – just over a year ago.

Since then technical teams from both organisations have been working closely to configure, implement and roll-out the software, which has since enhanced reporting, audit and risk management levels for almost 15,000 users.

Now, following the success of the software, HAECO Group has expanded Ideagen Enlighten to further sites in the Group, with TEXL Ltd based in Xiamen, China, and its MRO site in the Americas now on board.

Dennis Hui, General Manager of Quality at HAECO Hong Kong, said: “By successfully having three HAECO sites up and running on the Ideagen Enlighten platform, the company has taken its first steps in its corporate goal of achieving group wide visibility of its performance and safety operations.

“Following the success of the Enlighten product across the Group’s Hong Kong operations – including providing senior management with business performance, analysis and reporting data – HAECO Group has extended Ideagen Enlighten into its operations in America and increased its presence in China where we look forward to seeing similar benefits from the product and from working with Ideagen.”

The HAECO Group, is one of the largest Maintenance, Repair and Overhaul (MRO) service providers in the world. Through its 18 subsidiaries and joint venture companies worldwide, the Group offers a full spectrum of services including airframe services, line services, cabin solutions, private jet solutions, fleet technical management, inventory technical management and component overhaul among others.

Steven Cespedes, Ideagen’s Head of Aviation, said: “We are delighted that Ideagen Enlighten has been such a success within the HAECO Group and that they are witnessing some major benefits from investing in both us as a company and in the product itself. “The project has gone from strength to strength from the initial three sites and the system is now up and running and being used consistently on a day-to-day basis by almost 15,000 users across HAECO’s operations.”

Ideagen Enlighten was chosen by HAECO Group in 2014 to provide them with a common platform across the business for various business tasks such as risk, incident and occurrence management, document control, auditing, and health and safety management.

The next major phase in the project will see Ideagen and HAECO work together to introduce both analysis and business intelligence functionality into the system, providing key KPI and SPI data for each individual company and the wider Group.

Steven added: “The end goal in this project is to achieve Group wide visibility of operational and safety performance. In the coming weeks and months, we will be working with HAECO Group to create their SPIs and KPIs which will provide management with an overview of their entire operations. By achieving this, it will allow HAECO Group to see how each site is performing and if any trends are emerging, thus improving safety knowledge and awareness of operational risks.”

Ross McLarnon, Ideagen’s Product Manager for Enlighten, said: “The success of Ideagen Enlighten within HAECO’s operations is there for everyone to see, with huge benefits already being witnessed in the areas of safety and incident reporting in particular.

“The scalability of the system has allowed HAECO Group to achieve operational excellence while catering for almost 15,000 users daily. This marks the first milestone in terms of Enlighten providing the global HAECO Group with complete oversight of business performance.”"

[painter] 23/8/2016 08:40

IDEA usually has a good run in the last 3 months of the year (1/10 to YE). Normally a TU mid November and in the past some contract wins announced ahead of Jan Interims.

Good for a XMAS spread bet?

History:

1/10/2013 22.375p 30/12/2013 28.125p +25%
1/10/2014 32.25p 31/12/2014 38.50p +19%
1/10/2015 47.00p 30/12/2015 53.00p +12%

History repeats
1/10/2016 54.50p 29/12/2016 69.25p +27%

! couldn't get a spread bet but luckily add.

[rivaldo] 22/8/2016 10:19

IDEA have been featured in Shares Magazine as follows - personally I believe 100p will come quicker than 3-4 years given the likelihood of more and bigger acquisitions, as well as organic growth:

"Bright Ideagen
Compliance and risk is a software niche being successfully tapped

Increasing industry compliance, accountability, audit trails and risk management, organisations around the world are being pushed to embrace an ever-tightening red tape net.

Little UK software specialist Ideagen (IDEA:AIM) has a wide range of off-theshelf
specialised software tools smack bang in this sweet spot, and successful execution of its buy-and-build strategy should see the shares hit 70p in the next six to 12 months.

The Midlands-based company concentrates on what it calls the governance, risk and compliance (GRC) space, providing information management solutions to highly regulated industries, such as healthcare, complex manufacturing, banking/finance, defence and energy.

Supplying an integrated system that combines information from multiple operational
sources on top of the typical internal audit and compliance functions, this leads to a detailed overview for clients of corporate risk, controls and consequence mitigation, an increasingly compelling sale once an organisation’s bosses begin to grasp the significant financial and reputational damage risk of not having adequate
systems in place.

PROFITABLE NICHE

It’s not a particularly glamorous market in the way that, say cyber security or fintech is right now. But it is allowing the company to carve itself a successful growth path in this complex and profitable niche, with carefully-vetted acquisitions adding extra value.

Ideagen secured its first major purchase back in December 2012 (£18 million Gael) but its has added other smaller bolt-ons since, including the £3.6 million (net of cash) purchase of peer Covalent. It adds compliance-heavy verticals (local government, social housing) plus a deeper footprint in the existing NHS market,
bolstering recurring revenue streams to about 55% of its total going forward.

And a good value bit of business it looks. An estimated 85% of Covalent’s £2.2 million most recent annual revenue is recurring, implying a purchase price of just 1.9-times those repeat sales.

EYE ON VALUE

It’s a typical Ideagen sort of deal and underlines the management ethos that is delivering carefully managed, rather than blistering, growth. To illustrate the point, Ideagen’s most recent full year results, to 30 April 2016, show a 52% jump in revenues to £21.9 million for the year to 30 April, 10% of which was driven from the underlying business, or organic growth in other words.

This led to a 57% leap in adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) to £6.3 million and improved operating cash conversion metrics, an increasingly meaningful metric in the current minvestment climate. At a pre-tax profit level the figures shot up 58% to £5.7 million, although that’s after adjusting for various perceived one-offs, such as share based
payments, amortisation of acquisition intangibles and a few other bits and bobs.

Investors can feel rightly chuffed about a 96% client renewals hit rate and 100 new customers won, not to mention the biggest single contract in the company’s history secured, worth £4.9 million.

A previous Play of the Week in the early days of the company’s switch from the old Plus market to AIM at 16p (2 Aug 2012), that investment call went on to rack up a near 30% gain in a year to 20.625p. As the chart shows, despite a few lumps
and bumps along the way, share price progress has been pretty consistent ever since, the stock earning a typical high-teens to low 20s price to earnings (PE) multiple.

Extrapolate a rough 20-times PE beyond this year into the 30 April 2018 fiscal period, investors can quite reasonably expect the shares to nudge 70p over the next six to 12 months, tallying with the 69p price target of analysts at FinnCap. But being a long-run growth opportunity, it is not out of the question for Ideagen stock to touch 100p on a three to four year view.

Growth: MEDIUM
Serving an expanding niche and is aligning its ambitions with the large opportunity without overstepping its resources.

Risk: LOW
A clear focus provides opportunity as well as raising barriers to entry for
competitors.

Quality: HIGH
High visibility from recurring revenues and decent cash generation, risk to forecasts is typically on the upside."

[rivaldo] 09/8/2016 07:24

Techmarketview are positive on the acquisition too:



"Monday 08 August 2016

Ideagen pays cash for Covenant

Ideagen pays cash for CovenantInformation management software specialist Ideagen expanded its cloud capabilities with the £3.6m acquisition of Covalent, the Taunton-based software as a service provider and TechMarketView 'Little British Battler'.

The deal adds 37 staff and approximately 200 customers to Ideagen’s ranks. Covalent’s Cloud Suite – which includes multiple risk and performance management modules – generated £1.9m of recurring revenue in FY15. Showing existing Covalent directors the door will save Ideagen around £180k per annum the company estimates, though we expect there are other short term costs involved.

There are multiple synergies with the deal. Like G-Cloud supplier Ideagen, Covalent’s core customer base is rooted in the public sector, and predominantly local government.

What looks like a significant overlap between the two newly merged companies product sets shouldn’t prove too much of a problem as long as customer expectations are managed correctly (IT departments often get nervous about being moved onto new applications/services and will need assurances on product lifecycles).

Ideagen has been progressing nicely in recent years and we think the cash deal for Covenant is odds on to help it maintain that success."

[yump] 08/8/2016 17:31

Thought they were overpaying initially, but with the directors' salaries saving by my reckoning that's a p/e of about 10 they've paid. With some more savings to come. With IDEA on a higher rating that's in effect a few pence on the price straight away, which seems to be what 'the market' has priced in.

Nice surprise to have found IDEA some time ago and (accidentally) found a company that tells shareholders pretty much how they are adding value, rather than just banging on about shareholder value while going on some ego-trip revenue building adventure.

[tdog1975] 08/8/2016 12:55

Can see 60p here by end of August Buying today to increase holding

[rivaldo] 08/8/2016 11:24

Cheers GHF.

I note also that Finncap have increased their target price to 69p, the second such increase since 19th July (up from 61p at that time).

[glasshalfull] 08/8/2016 09:41

Agree, appears a good acquisition.

finnCap provide the following upgrade to this years forecasts,

"... assuming nine months of contribution, we lift our sales estimate by £1.5m (+6%) and EBITDA and EPS by +3% each. The sales adjustment is just shy of +£1.6m, which could be assumed by pro-rating Covalent's strong H1, which has been boosted recently by project work and therefore leaves room for outperformance. An expected EBITDA lift of +£0.2m reflects +£1.26m of cash operating costs, post £50k of assumed synergies."

This transmits to EPS growth of 18% this year.


Well done to DH & team yet again.

Kind regards,
GHF

[18bt] 08/8/2016 08:01

Seems a sensible acquisition

[rivaldo] 08/8/2016 07:17

Excellent news - an immediately earnings-enhancing £3.6m acquisition from the cash pile, bringing in high recurring revenues and increased GRC content "in the NHS, local government and financial services verticals":



It looks an ideal acquisition:

"Covalent currently employs 37 staff and has approximately 200 customers across the NHS, Local Government, Housing Association and Financial Services sectors.

Covalent has recently released a Cloud Based version of its software following approximately 40 man years of development which has driven strong growth in recurring revenues."

[rivaldo] 04/8/2016 08:41

Good news:



"Thursday 4 Aug 2016 07:00
Ideagen secure place on G-Cloud 8 platform

Ideagen, a Glasgow company which provides software and services to organisations in highly regulated industries, is delighted to announce it has been awarded a place on the G-Cloud 8 Digital Marketplace framework.

The G-Cloud framework allows public sector organisations such as the NHS and local councils to find and compare cloud-based services like web hosting and site analytics.

This allows public sector organisations to buy services quicker than before, as they don’t have to run a full tender.

Since its launch in 2012, public sector organisations have invested hundreds of millions of pounds in cloud based solutions in order to improve performance levels and reduce costs.

Ideagen’s successful placement on G-Cloud 8 marks its fourth term on the framework, allowing the company to showcase and offer its comprehensive portfolio of healthcare, GRC and web content management solutions via the Digital Marketplace.

David Hornsby, Ideagen’s CEO, said: “We are delighted to once again be represented on the G-Cloud Digital Marketplace. It is yet another outstanding achievement for the company and once again testament to the strength of our products and services.

“We look forward to being able to extend the services we can offer through this platform.”

Via the new Digital Marketplace, Ideagen is able to deliver its full range of software solutions including its web content management system, a complete healthcare suite of products and professional consultancy services.

In recent years, Ideagen has operated within the G-Cloud platform successfully. In 2015, the company used the platform to secure a contract with Public Health England, providing them with its dartKW software across eight UK research laboratories – allowing them to provide secure storage and reporting for clinical information."

[multibagger] 28/7/2016 21:11

Re post 628



"Ideagen to help mental health and community trust meet paperless NHS targets and reduce reliance on off-site storage suppliers"

Published on July 8, 2016 at 12:17 AM
------------------------------------------------------------

A little bird says that the contract value is small by IDEA standards...sources believe it is about £31k in total with some recurrent revenue from software.

Not sure how much is recurrent but apparently involves some 3 scanners and associated software.

Nevertheless, good to see a foray into a new market segment :)

[multibagger] 28/7/2016 20:46

O/T

FAO Rivaldo,

Take a look at ARC - seems to have the financial characteristics you look for...strong upward movement today.

DoI: I hold ARC

[rivaldo] 26/7/2016 14:32

I saw IDEA present last week. Just a few quick points of interest (these are quickly taken notes so may not be fully correct!):

- recurring revenues represent 88% of operating costs and 53% of total revenues
- 10-12 companies with £2m-£3m turnover average are possible acquisitions from the cash pile
- Enlighten was built for the Amazon Web Services platform, so should ride on the back of the apparent continued success of that platform
- exchange rates should be a "mild benefit" this year
- of the £4.9m Gael contract, only a conservative £1.2m was booked last year, so more will be booked and will benefit this year
- the CEO said as an aside that Finncap's 3p EPS forecast for this year was "not our forecast". This could imply that he thought it was somewhat underpowered, but we'll have to wait and see on that one...

[rivaldo] 20/7/2016 07:37

Techmarketview are positive on IDEA's results:



"Ideagen rises on regulations and GRC

Rising demand for GRC capabilities produced another solid year for Ideagen, the provider of information management software to highly regulated industries, and highlights just how much the company has changed.

Ideagen has pivoted from a healthcare-based business to a vertically diverse operation centred on GRC. Organised into two segments, GRC, and Content and Clinical, GRC generated 80% of the its revenue (£17.5m, 23% growth) in the year to April 30 2016. In contrast Content and Clinical saw a 20% drop in revenue to £4.4m due to stasis in acute trust spending. What that means at group level is that revenue jumped 52% to £21.9m, with a decent boost to the bottom line too: adjusted EBITDA up 57% to £6.3m. PBT came in at £1m vs. £608K.

Acquisitions have expanded the business, but it is delivering organic growth - 10% - and that is down to its GRC offerings. In this rising but fragmented market providers able to offer a coherent set of enterprise-level solutions are set to do well. Under CEO David Hornsby the company is capitalising on these factors and from the steady increase in regulations such as ISO 13485 in aviation and ISO 45001 in Health and Safety. With a footprint across multiple verticals, of which transport (rail and aviation) appears to be doing particularly well, it has successfully diversified (see here) and put itself into a position to both grow with its markets and adjust to shifts within them.

It is still predominantly an on-premise business (although recurring revenue totaled £11.5m last year). It has invested heavily in its SaaS Enlighten GRC platform and while it is growing fast, the percentage of SaaS revenue is estimated at sub 10% and the customer count is c20 of a total of c2200. SaaS recurring revenues are expected to start flowing over the next year however. With several arrows in its quiver Ideagen and further scope for growth."

[rivaldo] 19/7/2016 11:16

Cheers - and Finncap have increased their target price to 65p (from 61p):



Jambo, you missed out the most important news :o))

[rivaldo] 19/7/2016 07:43

Yep, good results which are spot on expectations.

Lovely, high recurring income too. Cash is slightly below expectations, but still a nice pot of £6.3m.

Good to hear that trading since the year end has been "robust". The NHS stasis is frustrating, but already known, and the recurring revenues mean this year's contribution from that area will be stable.

I imagine this year's forecasts will remain at 3.1p EPS, and if you strip out the cash pile this sort of rating for a growth company with high recurring income is pretty decent value imo.

Plus with Gael now integrated it's time for IDEA to bring in more acquisitions and boost EPS etc.

[multibagger] 19/7/2016 07:38

We could be back to the early 60s today on the back of these stellar results....