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
IR LLFFDRSIRIIR
(END) Dow Jones Newswires
June 07, 2016 02:00 ET (06:00 GMT)