 Paul Scott's recent view worth a read. I'm a holder, so finding the share price decline frustrating. A good business, but the only people benefitting are the management:
"Outlook is fine, with “good revenue visibility for the remainder of FY22”, and trading in line with expectations. CFO review - You have to travel quite a long way down the results statement before you find the most interesting numbers. For example, continuing revenue growth is 7%, but this includes the effect of acquisitions. The CFO review, much further down the statement, lets us know that “On a 'like for like' basis the Group delivered £30.0m of revenue, slightly down on the prior period.” So there is no organic revenue growth to speak of, only growth by acquisition. Also, why is PBT down 1% despite “adjusted EBITDA” rising 8%? The main reason is nearly £500k in additional share option costs from the company’s LTIP. My view – I’m less enthused by this one than I was before. The only thing I can see in its favour is the sticky public sector contracts. I note that the company paid out £1.8 million in total to shareholders for last year’s performance, while the LTIP has cost the company £1.25 million in just six months."
I'm sure Meadon and Grubb, who hold very few shares between them, will continue to do very well for themselves. |
I've given up. Recurring revenues are al very well for customer confidence and employee salaries and while Idox is clearly a good business that does not make it a good investment. |
An old favourite but a hefty P/E
Am reducing |
IDOX H1 2022 results presented by David Meaden, CEO & Anoop Kang, CFO, to analysts, followed by Q&A.
Video: hxxps://www.piworld.co.uk/company-videos/idox-idox-interim-results-2022-presentation-june-2022/
Podcast: hxxps://piworld.podbean.com/e/idox-idox-interim-results-2022-presentation-june-2022/ |
CEO Meaden not showing much confidence in prospects with his sale of shares after option exercise. Can't remember the last time any director put his hands into his pockets for shares here -- and there was me thinking we are in the 'fly' stage! |
Options granted to CEO and CFO, to vest 'ordinarily' over next 3 years, but only if the share price is at least 102p -- should give them some incentive, although would be nice to see them putting their own cash into some shares. Options would certainly come in handy for them if there's a takeover. |
Here is the IDOX FY21 results presentation to analysts incl Q&A given 27.1.22. |
Fully valued
Not a high growth stock |
Steady eddy results today, slight beat on EPS. Nice solid business imo. Just watched the results webinar. Strong management imo, and a good double act, just wish they would back up the 'value proposition' that they talk about in the webinar with some share buying of their own. Minimal shareholdings between the CEO and CFO, with no buying for well over 2 years. |
After a long ride with IDOX and a 112% profit I finally decided to sell today. I do see a future and a possible rise but the level of maturity today is close to how I'd value the company based on good will. A small drop is on the horizon.! |
Read the last 2 RNSs on acquisitions
Show some enterprise |
What new division? Nothing obvious to me on Idox news page. |
building up an interesting new division |
Some big trades after the bell. |
bit of a move this pm |
Griffiths - Very wise and rich man - The fact that he has reduced holding to below notifiable level - whether or not he is still holding any stock - is (imo) a red flag.
He however does not walk on water - |
Exits or just gone covert? |
so Griffiths exits |
Gargoyle2 - U were right - So probably best - that is if interested - to wait and see what happens - If goes the same way as HEIQ - initial write up in Feb then possibly more attractive prices later but if goes like Aution technology then jump in now - Whichever DYOR-- Sorry No Crystal Balls here. |
IDOX one of the main write-ups in SCSW yesterday. May see some action tomorrow. |
Still getting some coverage here - spotted this on Idox's LinkedIn page today, a Growth Company Investor piece following an interview with David Meaden. The full GCI article that is linked is behind a paywall but this text has been published by Idox:
Earlier this year, our CEO David Meaden sat down with
Growth Company Investor to talk about our business. The
article gives an insight into our public sector software
focused growth strategy, from the acquisition of Aligned
Assets to the changes we’ve been making in recent months
as well as an outlook on the future of our business.
This extract covers some of the highlights with the full piece
available to read here.
The business
Idox now has a strong, focused position in public sector software which accounts for over 80% of group revenue. The company’s products mainly address document process management and statutory compliance requirements for local authority clients and the NHS. Over 90% of UK local authorities take one or more products which fit into seven categories. Property-related software includes planning consent, building control, land charges, and address management. In public protection, Idox software supports environmental health, licensing and trading standards. There are tools to support the delivery of social care and disability services, grant and funding programmes, facilities management, traffic management, and electoral services.
Management and finances
A key element of the story concerns the recent changes in management and strategy.
CEO David Meaden joined the company in June 2018 after a long career at Northgate
Information Solutions and set about restructuring a business that had lost its way. Idox had grown by making acquisitions that had not been integrated, so there was no value created from them being in the same group structure. It meant the business was overly complicated and some of the deals had not gone well. Meaden identified Idox’s core strength as its public sector expertise and its ability to solve these clients’ problems through software products. Given the commonality of the client base, this software can be sold to many customers with minimal customisation. So the strategy has been to simplify, dispose of the peripheral digital and content businesses, and focus on software provision.
Valuation and outlook
We were impressed with David Meaden and the restructuring element of the Idox story
when we spoke to him in February. Our intention was to write the stock up as a new
recommendation that month, only for the aborted bid to send the stock above a sensible buying range. The shares were trading in the mid-50s pre-bid and are now in the mid-60s; so the valuation has risen but does not look too demanding for a software business with improving operational trends and a clear growth strategy. We also like companies that have received a bid – if it happens once it can happen again.
Acquisitions form an important part of the story, but management appears to have put the right structure in place to integrate these and they should be coherent bolt-on deals which have a clear fit with the business. Meaden talks of the SaaS ‘rule of 40’ which defines successful companies as those with a growth rate plus ebitda margin of 40 or above. With a 5% growth rate (plus bolt-ons acquired for cash) and an ebitda margin now moving into the 35% area, Idox looks well placed. |
IDOX's latest results webinar available here: |
Another govt agency on the books... |
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