REG - IDOX PLC - Half Year Results
11/06/2024 07:00
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RNS Number : 8731R IDOX PLC 11 June 2024
11 June 2024
Idox plc
Half Year results for the six months ended 30 April 2024
Strong first half performance with over 20% growth in revenue
Idox plc (AIM: IDOX, 'Idox', 'the Company' or 'the Group'), a leading supplier
of specialist information management software and geospatial data solutions to
the public and asset-intensive sectors, is pleased to announce its unaudited
half year results for the six months ended 30 April 2024 ('H1 FY24').
Financial highlights - in line with expectations
Revenue
· Revenue increased by 21% to £43.1m (H1 FY23: £35.8m), with a full
six-month contribution from Emapsite.
· Recurring revenues(1) increased by 29% to £27.4m (H1 FY23: £21.2m),
accounting for 63% of the Group's total revenue (H1 FY23: 59%).
Profit
· Adjusted(2) EBITDA increased by 8% to £13.1m (H1 FY23: £12.1m).
· Adjusted(2) EBITDA margin of 30% (H1 FY23: 34%), in line with
expectations following the Emapsite acquisition.
· Statutory operating profit increased by 15% to £5.7m (H1 FY23:
£4.9m).
· Statutory operating profit margin stable at 13% (H1 FY23: 14%).
· Statutory profit before tax increased 12% to £4.6m (H1 FY23:
£4.1m).
· Adjusted(3) diluted EPS of 1.26p (H1 FY23: 1.33p), reflecting an
increased effective tax rate and higher borrowing costs.
· Statutory diluted EPS of 0.71p (H1 FY23: 0.73p).
Cash
· Free cashflow(5) generation stable at £13.0m (H1 FY23: £12.9m).
· Net debt(4) at the end of the period reduced to £6.6m (31 October
2023: £14.7m; 30 April 2023: net cash £1.1m).
· Cash generated from operating activities before taxation as a
percentage of Adjusted EBITDA for total operations was 149% (H1 FY23: 148%).
· Significant resources in place to fund accretive M&A, including
£75m revolving credit facility and £45m accordion.
Operational highlights - a strong performance
· Order intake of £54.1m, up 4% from H1 FY23, providing increasing
levels of recurring revenue visibility for the remainder of FY24 and into
FY25.
· Integration of Emapsite, acquired in August 2023 has progressed well,
with performance in line with expectations.
· Good progress on developing the Group's geospatial capabilities.
· Healthy M&A pipeline with good leads on a number of strategic
targets.
Current trading and outlook - good visibility for the remainder of the year
· Combination of growth in recurring revenue and pipeline, provides
good revenue visibility for the remainder of FY24 and into FY25.
· The business continues to perform well and in line with the Board's
expectations.
· Intention to pay a final dividend in line with the Group's stated
dividend policy.
David Meaden, Chief Executive Officer of Idox said:
"The Group has delivered a strong financial performance in the first half of
2024 in line with the Board's expectations, with increased total revenue,
recurring revenue, profitability and cash generation.
A clear focus on, and a deep understanding of the markets we serve, continues
to provide us with excellent opportunities to support new and existing
customers. The breadth and depth of our services delivered via our outstanding
people offers further opportunities for organic growth.
We have a proven track record of identifying, acquiring and integrating
strategic assets into Idox as with our most recent acquisition of Emapsite in
2023. Our M&A pipeline is very healthy, and we remain confident that we
can continue to make use of our significant financial resources to deliver
profitable organic and inorganic growth in order to maximise shareholder
value.
We are pleased with the progress the Group has made and are on track to
deliver on our plans for the remainder of 2024 in line with the Board's
expectations."
There will be a webcast at 11.45am UK time today for analysts and investors.
To register for the webcast please contact MHP at idox@mhpgroup.com
(mailto:idox@mhpgroup.com)
For further information please contact:
Idox plc +44 (0) 870 333 7101
Chris Stone, Non-Executive Chair investorrelations@idoxgroup.com
David Meaden, Chief Executive Officer
Anoop Kang, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker) +44 (0) 20 7418 8900
Paul Gillam
Kate Bannatyne
Adam Telling
MHP + 44 (0) 7827 662 831
Reg Hoare idox@mhpgroup.com (mailto:idox@mhpgroup.com)
Ollie Hoare
Matthew Taylor
About Idox plc
For more information see www.idoxgroup.com
(https://protect.checkpoint.com/v2/___http:/www.idoxgroup.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzozYzE5OGJhNGVhNzNiNjcxOTFlNjE4MDRkMjMwYjNmYjo2OmI3ZDY6ZWRkOWNjYzkxNzZmMzEzNDliMzk4N2JmY2QyMDFkMDcxNzA1ZjdjY2NlMThiMjZkNzliNTI4OTU2NGNkNmIxODpwOkY)
@Idoxgroup
Alternative Performance Measures (APMs)
The Group uses these APMs, which are not defined or specified under
International Financial Reporting Standards, as this is in line with the
management information requested and presented to the decision makers in our
business; and is consistent with how the business is assessed by our debt and
equity providers.
(1) Recurring revenue is defined as revenues associated with access to a
specific ongoing service, with invoicing that typically recurs on an annual
basis and underpinned by either a multi-year, rolling contract and highly
repeatable services. These services include Support & Maintenance, SaaS
fees, Hosting services, and some Managed service arrangements which involve a
fixed fee irrespective of consumption.
(2) Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) is defined as earnings before amortisation, depreciation,
restructuring, acquisition costs, impairment, financing costs and share option
costs. Share option costs are excluded from Adjusted EBITDA as this is a
commonly used measure in the industry and how management and our shareholders
track performance (see note 10 for reconciliation).
(3) Adjusted EPS excludes amortisation on acquired intangibles, restructuring,
financing, impairment, share option and acquisition costs (see note 10 for
reconciliation).
(4) Net debt / cash is defined as the aggregation of cash, bank borrowings and
the long-term bond (see note 10 for reconciliation). This differs from a
similar measure under IFRS, which would also include lease liabilities as
debt. The definition used is consistent with that used within the Group's
banking arrangements.
(5) Free cash flow is defined as net cash flow from operating activities after
taxation less capital expenditure and lease payments (see note 10 for
reconciliation).
Chair's statement
Introduction
I am pleased to introduce a strong set of results from Idox for the first half
of the financial year. This has been a period of continuous progress and
strong operational execution. During the period, revenues grew by 21% and
Adjusted EBITDA by 8%. Cash generated from operating activities, before
taxation, was £19.5m, a conversion rate of 149% against an Adjusted EBITDA
for the period of £13.1m. The period ended with the business in a net debt
position of £6.6m.
The Group continues to be well placed to execute on our growth strategy. There
is positive momentum across the business, supported by an increase of 4% on
last year's order intake and a strong pipeline of opportunities which
underpins our confidence in the medium term. We continue to see strong demand
for our products and services from existing clients as they use software and
new technologies to help them manage increasing demand with limited resources,
and whilst this is an election year, these pressures will remain for the
incoming government.
It is important that we manage the business to take advantage of new
opportunities, build scale in our operations and continue to expand into near
market adjacencies to capitalise on our core competencies.
We have continued to see opportunities that extend our product and service
footprint with our clients, and we have supported the business with investment
in new product areas which we believe will deliver value to clients and
shareholders over the medium term. We have been pleased with the acquisition
of Emapsite in which we have invested further to enable the business to grow
its product and services portfolio.
The divisional structure we implemented last year has been successful and it
has been pleasing to see the business continue to grow its recurring revenue,
up 29% in the period. We continue to see strong demand for our cloud-based
solutions, particularly in our LPPP business where we saw recurring revenue in
Idox Cloud up over 20% on the prior year period, with order intake up 48% on
the same period last year.
We continue to look for accretive, synergistic acquisition opportunities that
support our long-term focus on software and complement the existing portfolio.
We are confident that there are a range of opportunities that fit the key
criteria we have defined, and whilst it is incumbent on the Board to exercise
the necessary patience to ensure that we are delivering in the best long-term
interests of shareholders, we look forward to adding further assets in due
course. In support of our growth strategy, the continued focus on cash
generation and paying down existing debt has put the business in a strong
position.
During the reporting period, we have undertaken work to report our progress in
matters relating to ESG and enhanced our reporting on matters relating to
diversity, equality, and inclusivity (DEI). We have continued to explore how
our teams engage with the business and their thoughts on matters that affect
them through the 'Dare to Be Different' survey and this continues to shape our
approach to DEI. We are committed to ensuring that all stakeholders, foremost
amongst these our employees, can be proud of the Company's work in this area.
The Chief Executive's statement includes further information on our ESG
related activities.
We are grateful to our clients for continuing to have confidence in Idox as a
partner and to our colleagues for their hard work and dedication in making
Idox the business it is today.
Dividend
As previously announced, the Group paid a dividend of 0.6p per share in April
2024 in respect of the year ending 31 October 2023. Our current policy is to
only declare a final dividend and therefore, no interim dividend is proposed
in respect of H1 FY24 (H1 FY23: £Nil). We will keep the level of future
dividends under review in consideration of our financial position and our
confidence in the future.
Summary
The Group has made good progress in the period. The integration of Emapsite
into the Group structure has been well executed and the ongoing focus on
growing recurring revenue and cash continues to produce results. We remain
committed to our buy and build strategy and continue to carefully evaluate
M&A opportunities that we believe will deliver long term benefits for
clients and shareholders whilst creating strong opportunities for our teams
and their future development. The business continues to perform well and in
line with the Board's expectations.
Chris
Stone
Chair of the
Board
Chief Executive's statement
It is very pleasing to be able to report on another strong performance for the
first half of this year, as we continue to deliver great value to our
customers through our software solutions. Across the industries and markets
that we serve, our solutions enable our customers to manage highly complex
operational, legislative, and regulatory processes, through reliable and
effective solutions.
Our 'Four Pillars' underpin our strategic thinking and operational decision
making for the business as we continue to grow, adapt, and evolve; these are
Revenue expansion, Margin enhancement, Simplification and Communication.
Integration of the recently acquired Emapsite business into the organisational
structure has gone well and we are seeing great collaboration with other areas
of geospatial capability within the Group to form new and exciting solutions
and data services, driving future revenues.
Our financial position remains strong and our committed banking facilities
provide significant firepower to continue to compliment the organic growth of
the business with acquisitions where we see that we can add scale and
capability, alongside internal investment. We focus on opportunities that can
drive growth, improve recurring revenue, broaden our offering to existing
clients, and extend Idox's position in our chosen markets.
Strong progress
During this reporting period we have seen growth in Group revenues of 21%,
generating revenues of £43.1m, an Adjusted EBITDA improvement of 8% from
£12.1m to £13.1m and a statutory operating profit improvement of 15% to
£5.7m. The Group continued to generate strong cash flow during the period,
resulting in a net debt position at 30 April 2024 of £6.6m compared to
£14.7m at the end of the last financial year.
Our strong operational cadence and financial position makes Idox well placed
for continued growth in our software operations and provides a secure
foundation to which we can add compatible acquisitions to our portfolio of
offerings.
The 'Four Pillars' programme
Revenue expansion
Our core business areas performed very well in the period, and we continue to
demonstrate good levels of resilience in our sales performance.
Our strong market positions and continued investment in our solutions has
supported an improved sales performance, increasing sales to existing clients,
in addition to welcoming new client customers across all Divisions.
Improvements in execution and further expansion of our sales stratification
approach has delivered an enhanced performance and better customer engagement.
For the six months ended 30 April 2024, order intake across the Group
continued to grow, creating a strong orderbook for the remainder of the
financial year and recurring revenue into future financial years. Order intake
for the period was £54.1m up 4% on the prior year.
Reviewing the performance of our Divisions:
Land, Property & Public Protection
Sales order intake in Local Government continued to perform well with high
retention rates in the period and a good mix of new services and contract
extensions supporting continued revenue growth. We have a strategic focus on
establishing longer term agreements with customers, securing future long-term
relationships; these included significant contracts with North Northampton
Council, Stroud District Council and City of York Council all of which
extended their agreements over five-years. Scottish Borders Council joined a
growing customer base choosing the Idox provisioned hosting service for their
existing software platforms.
Recurring revenue in Idox Cloud was up in H1 FY24 over 20% on the prior
period, with order intake continuing to improve - up 48% to £5.2m on the same
period last year. We welcomed new customers to our solution, including
Waverley Borough Council and the London Borough of Merton, as well as customer
migrations including Adur & Worthing Council and Armagh City, Banbridge
and Craigavon Borough Council.
Revenues in Exegesis were down slightly on prior year due to some one-off
large-scale projects delivered in the prior year. Extensions from large
international customers Natuurmomumenten & Staatsbosbeheer utilising our
CMSi solutions to manage large national parks and new projects with Cornwall
Council and the Bat Conservation Trust helped maintain a heathy orderbook.
Address Management Solutions revenues were up 7% supported by continued
recurring revenue growth in the period which was up 9%. Our strategy of
expanding into new adjacent markets showed good progress in the first half of
the year with significant new business wins with Gloucestershire Constabulary
and West Midlands Fire Service.
The formation of Idox Geospatial, following the acquisition of Emapsite in
2023, has created an opportunity to create and explore new data services and
solutions. Emapsite has built on its previous performance prior to the
acquisition, with revenue growth of 13% on the same period last year. It has
also been a very strong revenue period for thinkWhere with large projects with
NCAP and Eurogeographics being delivered during the period.
Communities
Recurring revenue in Lilie, our sexual health solution, was up 12% on prior
year, as we continued our strong relationship with market providers Virgin
Care Services and Solutions4Health.
With no major elections events across the UK or Malta in the first half of
FY24, Elections revenues were down slightly on prior year, although order
intake was up significantly in the period as customers gear up for the
impending UK General Election.
In the Database subscription businesses GrantFinder and ResearchConnect,
recurring revenue was up over 10% on the same period last year. GrantFinder
order intake showed a strong performance despite the pressure we have seen on
discretionary spend, particularly in the Public Sector. We are excited and
look forward to a positive second half following the introduction of AI to
this content area.
Through our "My Funding Central" solution, and as part of our ongoing
commitment to charities working across the UK, we provide organisations with
incomes of less than £30,000 free access to grants and funding
information. Subscribers to these services continue to grow with over 800 new
users registering to use the service in the period.
Social Care revenues were 2% lower than in 2023, however, recurring revenue
has continued to increase (up 5%) as new customers including Derbyshire County
Council and St Helens Council joined our social care userbase.
Assets
EIM revenues were 3% lower compared to 2023. However, the second quarter saw a
much better order intake performance carrying a stronger orderbook into the
second half of the year. New FusionLive sales included seven new names in the
period, and we saw two significant £1m+ contract extensions with clients in
North America.
iFit (our asset tracking solution) revenues were up over 9% with recurring
revenues accounting for most of the improvement in performance, growing 12%
half-on-half. There are a number of exciting opportunities for the iFit
solution across the NHS and into other markets that we continue to target.
The latest release of CAFM (facilities management solution) has been
positively received by the market and we are beginning to see more
opportunities for the solution in new business. Revenues were 12% down in the
first half of the year, but with new business wins in the UK including
Cheltenham College and overseas with Abdullah Rasheed Al Rushaid Real Estate
Investment Company, opportunities for an improvement in the second half of the
year are good.
Margin enhancement
We continue to target margin improvements across the business, and this has
helped deliver results in the first half of the year. Leveraging the matrix
structure to build on our scale across our Engineering and IT departments has
helped create efficiencies and better use of resources.
Formation of the Customer Success horizontal team and combining the leadership
and management of onboarding, professional services and customer support is
helping improve efficiency and delivery of better and more consistent services
to customers. This approach has created opportunities for pooled resources
providing additional support and scale across the Group as well as shared
learning and improvement of technical capabilities.
We have continued to increase our operational teams in India over the first
half of the year and see this as an important focus area over the next few
years as we target increasing our teams in India to represent over 30% of our
colleagues in the future.
Across Engineering we have developed a strategy to delivering Micro-Services
across all platforms, simplifying our approach to complex and repeatable
software requirements to ensure we engineer solutions once and apply them
across all of our platforms.
Simplification
Across the Group we have implemented technologies and processes to streamline
and improve consistency and colleague experience, this has helped bring better
controls and improved visibility, facilitating better management control and
information.
Expansion of the sales desk and revenue assurance teams across the entire
Group has improved the overall customer experience and simplifying the order
process and refining the order to cash workflow. This approach has created
organisational efficiencies, significantly simplified the operations and
created a more consistent approach.
We continue to review, refine and invest in processes and technology across
the organisation to streamline and improve both the colleague and customer
experience.
Communication
Given the nature of our operations, we have embraced, where appropriate, the
world of hybrid working. However, we continue to work hard to provide an open
and engaging environment where colleagues can collaborate effectively. We have
encouraged and facilitated regular face-to-face activities and contact as we
believe that in the creative areas of work, especially in development and
product management, this is of particular importance.
We have opened a new office in Belfast where we encourage many of our
graduates to work alongside our more experienced engineering teams and we are
moving to a new office in India to support our growth and continued
collaborative working environment.
As part of our communication strategy, we engage and encourage regular and
open dialogue with colleagues across the business, targeted through areas of
special interest and focus groups, delivered through a variety of media and
channels, and leveraging the very latest collaboration tools.
Regular CEO broadcasts continue to underpin our communication strategy, these
include regular interactive sessions with various colleagues from across the
business contributing to ensure that a broad range of insights, opinions, and
inputs are presented. This forum provides opportunities for colleagues to ask
open questions of the panel with high levels of participation from across the
Group.
Participating personally and directly with the selection and onboarding of new
team members provides me with a platform from which to outline our culture and
what our expectation levels are for each other at Idox. I believe that this
approach helps to maintain our Idox culture and authenticity from the outset.
Responsible
We believe that our solutions and services create long term value for the
customers and communities we serve, and whilst we recognise our need to create
shareholder value, the Board also recognises the importance of our societal
and environmental responsibilities and the need to conduct our business in a
responsible and sustainable way.
Our commitment to this is focussed in four areas; our People; our Communities,
our Environment and Organisational Responsibilities.
Our ESG steering committee is now in its fourth year of driving our strategy
and agenda, built on understanding and monitoring our business practices to
ensure they are sustainable in both environmental and social terms as well as
ensuring that Idox is well governed and authentic.
We have sponsored initiatives throughout the first half of FY24, maintaining
our focus on DEI - and this is approached through smaller cross business
virtual team meetings to discuss lived experiences and effective ways to make
improvements across the business.
Our second "Dare to be Different" engagement survey was undertaken in this
half the year and participation was again very high. We use the results and
feedback to help form our future strategies and policies.
We have also supported employee led initiatives throughout the first half of
the year to raise funds in support of various charities and we encourage and
promote the use our community days scheme to support good causes in our local
communities. Initiatives like the payroll giving scheme are well used and help
maximise the impact of employee's contributions. We also operate regular
workplace wellbeing sessions, which are very well attended and appreciated by
members of the Idox Team.
Through our work in the Local Government community, we continue to enter into
social value partnerships with clients allied to the delivery of our products
and services. These arrangements enable Idox to make a very real and direct
contribution in the clients' local community. In addition, as mentioned
previously, we have continued to give free access to our My Funding Central
services for eligible charities.
Idox remains committed to our environmental protection initiatives and
operating the business in a responsible manner. Our Environmental Management
System is accredited to BS EN ISO 14001:2015, and we participate in the Energy
Saving Opportunities Scheme ('ESOS'), meeting the requirements of the
Streamlined Energy and Carbon Reporting ('SECR') regulations.
The ESG steering committee also monitors our ongoing carbon reduction
initiatives to ensure we are meeting our targets, including maintaining
disciplines on avoiding unnecessary travel, travelling green wherever possible
and by continuing to take advantage of virtual meetings and the delivery of
many of our customer services online. Following its introduction last year, we
have maintained our options to incentivise and encourage employees to obtain
an electric vehicle through our salary sacrifice scheme.
Outlook
The Group has delivered a strong financial performance in the first half of
2024 in line with the Board's expectations, with increased total revenue,
recurring revenue, profitability and cash generation.
A clear focus on, and a deep understanding of the markets we serve, continues
to provide us with excellent opportunities to support new and existing
customers. The breadth and depth of our services delivered via our outstanding
people offers further opportunities for organic growth.
We have a proven track record of identifying, acquiring and integrating
strategic assets into Idox as with our most recent acquisition of Emapsite in
2023. Our M&A pipeline is very healthy, and we remain confident that we
can continue to make use of our significant financial resources to deliver
profitable organic and inorganic growth in order to maximise shareholder
value.
We are pleased with the progress the Group has made and are on track to
deliver on our plans for the remainder of 2024 in line with the Board's
expectations.
David Meaden
Chief Executive
Officer
Chief Financial Officer's review
The Group delivered a strong performance in the first half of 2024 across
revenue, Adjusted EBITDA and net debt. Revenue increased 21% in the period to
£43.1m (H1 FY23: £35.8m). Excluding the impact of Emapsite, the Group
delivered a 2% increase in revenue to £36.5m (H1 FY23: £35.8m). Adjusted
EBITDA increased by 8% to £13.1m (H1 FY23: £12.1m). Net debt since 31
October 2023 decreased by over 50% to £6.6m at 30 April 2024.
The following table sets out the Revenue and Adjusted EBITDA for each of the
Group's segments.
H1 FY24 H1 FY23 Variance
£000 £000 £000 %
Revenue
LPPP 28,950 21,458 7,492 35%
Assets 7,081 7,177 (96) (1%)
Communities 7,118 7,146 (28) (-%)
Total 43,149 35,781 7,368 21%
Revenue Split
LPPP 67% 60%
Assets 16% 20%
Communities 17% 20%
Total 100% 100%
Adjusted EBITDA(1)
LPPP 9,197 7,735 1,462 19%
Assets 1,580 1,811 (231) (13%)
Communities 2,282 2,557 (275) (11%)
Total 13,059 12,103 956 8%
Adjusted EBITDA Margin
LPPP 32% 36%
Assets 22% 25%
Communities 32% 36%
- Total 30% 34%
(1) Adjusted EBITDA is defined as earnings before amortisation, depreciation,
restructuring, acquisition costs, impairment, financing costs and share option
costs. See note 10 for reconciliations of the alternative performance
measures.
Total revenue for the period increased by 21% to £43.1m (H1 FY23: £35.8m).
LPPP increased 35% in the period to £29.0m (H1 FY23: £21.5m). Both Assets
and Communities revenues remained broadly flat at £7.1m.
Adjusted EBITDA increased by 8% for the period to £13.1m (H1 FY23: £12.1m).
In line with the revenue performance, the growth in Adjusted EBITDA was driven
by LPPP which was up 19% in the period being partially offset by reduced
profitably in Assets and Communities. This resulted in an anticipated overall
Adjusted EBITDA margin of 30% (H1 FY23: 34%). The LPPP Adjusted EBITDA margin
of 32% was in line with the full year 2023 result and includes expected lower
margins on Emapsite and further investment into developing our geospatial
capabilities. The Adjusted EBITDA margin reduction in Assets to 22% was driven
primarily by our CAFM facilities management solution. In Communities the
Adjusted EBITDA margin of 32% returned to a more normalised level following
the benefit of higher margin non-recurring revenue in 2023.
Revenues
H1 FY24 H1 FY23 Variance
£000 £000 £000 %
Revenues
- Recurring (LPPP) 17,621 11,689 5,932 51%
- Recurring (Assets) 4,727 4,788 (61) (1%)
- Recurring (Communities) 5,018 4,674 344 7%
27,366 21,151 6,215 29%
- Non-Recurring (LPPP) 11,329 9,769 1,560 16%
- Non-Recurring (Assets) 2,354 2,389 (35) (1%)
- Non-Recurring (Communities) 2,100 2,472 (372) (15%)
15,783 14,630 1,153 8%
43,149 35,781 7,368 21%
- Recurring(1) 63% 59%
- Non-Recurring(2) 37% 41%
(1) Recurring revenue is defined as revenues associated with access to a
specific ongoing service, with invoicing that typically recurs on an annual
basis and underpinned by either a multi-year, rolling contract and highly
repeatable services. These services include Support & Maintenance, SaaS
fees, Hosting services, and some Managed service arrangements which involve a
fixed fee irrespective of consumption.
(2) Non-recurring revenue is defined as revenues without any formal commitment
from the customer to recur on an annual basis.
Total recurring revenue increased by 29% in the period to £27.4m and
increased to 63% of the Group's total revenue (H1 FY23: 59%). Excluding the
impact of Emapsite, recurring revenue increased by 7% in the period. LPPP has
seen an increase of 51% in recurring revenues to £17.6m driven by growth in
our core Local Authority and Cloud solutions as well as the contribution from
Emapsite. Excluding the impact of Emapsite recurring revenue in LPPP increased
11% in the period. Recurring revenue within the Assets division has remained
stable at £4.7m with growth in our asset tracking solution (iFit) offset by
reductions in the CAFM facilities management solution. EIM recurring revenues
remained stable in the period. Communities recurring revenue increased by 7%
driven by growth in health, social care and databases solutions.
Non-recurring revenues have improved by 8% to £15.8m for the period and
account for 37% of the Group's revenue. LPPP non-recurring revenue was up 16%
to £11.3m (H1 FY23: £9.8m) and benefitted from the contribution from
Emapsite and growth in ThinkWhere being partially offset by anticipated
reductions in Local Authority. Non-recurring revenue within Assets remained
stable at £2.4m (H1 FY23: £2.4m) with a good performance in iFit.
Communities delivered £2.1m (H1 FY23: £2.5m) of non-recurring revenue with
slightly lower volumes in our health and social care solutions. Elections was
flat in the period but is expected to increase in the second half of the year
as the Group delivers the UK and Maltese general elections, as anticipated.
The Group's order intake for the period was up 4% on last year to £54.1m
which provides good levels of revenue visibility for the remainder of the year
and into FY25.
Profit before taxation
The statutory profit before taxation for the period was up 12% at £4.6m (H1
FY23: £4.1m). The following table provides a reconciliation between Adjusted
EBITDA and statutory profit before taxation.
H1 FY24 H1 FY23 Variance
£000 £000 £000 %
Adjusted EBITDA 13,059 12,103 956 8%
Depreciation & Amortisation (6,100) (5,288) (812) 15%
Restructuring costs (26) (329) 303 (92%)
Acquisition costs (12) (340) 328 (96%)
Financing costs (23) (28) 5 (18%)
Share option costs (1,225) (1,200) 25 2%
Net finance costs (1,116) (840) (276) 33%
Profit before taxation 4,557 4,078 479 12%
The Group incurred combined restructuring, acquisition and financing costs of
less than £0.1m, significantly less than in 2023, when the Group incurred
restructuring costs in connection with corporate simplification and office
rationalisation initiatives and finalisation of previous acquisition costs.
Share option costs of £1.2m (H1 FY23: £1.2m) relate to the accounting charge
for awards made under the Group's Long-term Incentive Plan, in accordance with
IFRS 2 - Share-based Payments.
Net finance costs are higher than the prior year at £1.1m (H1 FY23: £0.8m)
as a result of increased borrowing costs on the new loan facility.
The Group continues to invest in developing innovative technology solutions
across the portfolio and has capitalised £3.7m of development costs during
the period (H1 FY23: £3.4m). The increase in the period is primarily due to
the impact of the Emapsite acquisition (£0.1m), with the remaining £0.2m
being driven by an increase in development work across the portfolio.
Taxation
The effective tax rate (ETR) on a statutory basis for the period was 28% (H1
FY23: 18%).
The main driver for the increased tax rate is the full impact of the change in
the UK corporation tax rate from 19% to 25%. The ETR of 28% in the period was
higher than the UK corporation tax rate of 25% as a result of overseas losses
and expenses not deductible for tax purposes. In 2023 the ETR of 18% was lower
than the UK corporation tax rate of 19% mainly due to tax relief on share
options. As a result, the ETR on an adjusted basis moved from 22% to 26.5%.
Earnings per share and dividends
The adjusted basic earnings per share for the period was down 6% at 1.28p (H1
FY23: 1.36p) and the adjusted diluted earnings per share decreased by 5% to
1.26p (H1 FY23: 1.33p). Whilst the Group reported an 8% increase in Adjusted
EBITDA of £13.1m, higher net finance costs and taxation resulted in a lower
adjusted profit after taxation of £5.8m (H1 FY23: £6.1m).
Basic earnings per share reduced by 3% to 0.72p (H1 FY23: 0.75p). Diluted
earnings per share decreased by 3% to 0.71p (H1 FY23: 0.73p). This was driven
by the statutory profit after tax for the period being 3% lower than the prior
year.
In line with H1 FY23, the Board does not propose an interim dividend in
respect of the six months ended 30 April 2024. It will keep the level of
future dividends under review in consideration of the Group's performance,
financial position and overall confidence in the future, and expects to pay a
final dividend.
Balance sheet and cashflow
The Group's net assets have increased to £74.9m compared to £73.3m at 31
October 2023. The constituent movements are detailed in the Group's
consolidated Statement of Changes in Equity, which are summarised as follows:
6 months to
30 April 2024
£000
Total Equity as per FY23 Financial Report 73,277
Share option movements 1,135
Equity dividends paid (2,756)
Profit for the period 3,253
Exchange losses on translation of foreign operations (42)
Total Equity as per H1 FY24 Financial Report 74,867
The Group continued to have good cash generation in the period. Cash generated
from operating activities before taxation was £19.5m, and as a percentage of
Adjusted EBITDA was 149% (H1 FY23: 148%). The Group typically operates on a
negative working capital cycle. A significant part of the Group's contracts
renew and re-sign during the first half of the year. As a result, billings and
cash collections typically tend to be annually in advance in the first half of
the year.
H1 FY24 H1 FY23
£000 £000
Net cashflow from operating activities after taxation 17,666 17,136
Capex (4,292) (3,785)
Lease payments (400) (423)
Free cashflow(1) 12,974 12,928
( )
(1) Free cash flow is defined as net cash flow from operating activities after
taxation less capital expenditure and lease payments (see note 10 for
reconciliation).
Given the strong cash collection during the first half of the year, the Group
ended the period with net debt of £6.6m compared to £14.7m at 31 October
2023. Net debt comprised cash of £18.2m less bank borrowings of £13.8m and
the Maltese listed bond of £11.0m, which is due for repayment in July 2025.
We ended the period with a leverage ratio of 0.3 times (FY23: 0.6 times) with
significant headroom against the Group's financial covenants.
The Group retains excellent liquidity with cash and available committed bank
facilities and has strong headroom against financial covenants. The Group's
total available facilities at 30 April 2024 consisted of a revolving credit
facility of £75m and £45m accordion which continue to 1 October 2026,
providing significant scope for further M&A.
Anoop Kang
Chief Financial Officer
Consolidated interim statement of comprehensive income
Note 6 months to 12 months to
6 months to 30 April 2024 30 April 2023 31 October 2023
(unaudited) (unaudited) (audited)
£000 £000 £000
Revenue 3 43,149 35,781 73,277
Cost of sales (10,811) (7,717) (16,036)
Gross profit 32,338 28,064 57,241
Administrative expenses (26,665) (23,146) (47,897)
Operating profit 5,673 4,918 9,344
Analysed as:
Adjusted EBITDA 10 13,059 12,103 24,450
Depreciation & Amortisation (6,100) (5,288) (10,955)
Restructuring costs (26) (329) (378)
Acquisition costs (12) (340) (746)
Financing costs (23) (28) (396)
Share option costs (1,225) (1,200) (2,631)
Finance income 186 61 219
Finance costs (1,302) (901) (1,743)
Profit before taxation 4,557 4,078 7,820
Income tax charge 5 (1,304) (740) (2,238)
Profit for the period attributable to the owners of the parent 3,253 3,338 5,582
Other comprehensive loss for the period (42) (162) (45)
Items that will be reclassified subsequently to profit or loss:
Exchange movement on translation of foreign operations net of tax
Other comprehensive loss for the period, net of tax (42) (162) (45)
Total comprehensive income for the period attributable to owners of the parent 3,211 3,176 5,537
Earnings per share attributable to owners of the parent
Basic 6 0.72p 0.75p 1.24p
Diluted 6 0.71p 0.73p 1.23p
The accompanying notes form an integral part of these financial statements.
Consolidated interim balance sheet
Note At 30 April At 30 April 2023 (unaudited) At 31 October 2023
2024 (audited)
(unaudited)
£000 £000 £000
Assets
Non-current assets
Property, plant and equipment 1,358 1,275 1,339
Intangible assets 7 107,520 91,368 108,785
Right-of-use-assets 1,398 1,628 1,333
Deferred tax assets 2,130 2,804 2,541
Other receivables 1,185 - 1,201
Total non-current assets 113,591 97,075 115,199
Current assets
Trade and other receivables 24,026 23,734 21,451
Cash and cash equivalents 18,217 23,722 14,824
Total current assets 42,243 47,456 36,275
Total assets 155,834 144,531 151,474
Liabilities
Current liabilities
Trade and other payables 11,044 8,070 8,058
Deferred consideration 869 420 869
Current tax payable 922 365 1,422
Other liabilities 32,062 34,691 26,828
Provisions 714 555 589
Lease liabilities 522 473 220
Total current liabilities 46,133 44,574 37,986
Non-current liabilities
Deferred tax liabilities 7,052 5,673 7,519
Lease liabilities 910 1,145 958
Other liabilities 2,063 1,035 2,236
Bonds in issue 11,049 11,362 11,207
Borrowings 13,760 11,245 18,291
Total non-current liabilities 34,834 30,460 40,211
Total liabilities 80,967 75,034 78,197
Net assets 74,867 69,497 73,277
Equity
Called up share capital 4,594 4,535 4,562
Capital redemption reserve 1,112 1,112 1,112
Share premium account 41,581 41,558 41,558
Share option reserve 5,775 5,469 5,841
Other reserves 9,165 9,165 9,165
ESOP trust (548) (505) (526)
Foreign currency translation reserve 152 77 194
Retained earnings 13,036 8,086 11,371
Equity attributable to the owners of the parent 74,867 69,497 73,277
The accompanying notes form an integral part of these financial statements.
Consolidated interim statement of changes in equity
Called up share capital Capital redemption Share Treasury reserve Share Other ESOP Foreign currency translation reserve Retained earnings Total
£000 reserve premium £000 options reserves trust £000 £000 £000
£000 account reserve £000 £000
£000 £000
Balance at 1 November 2022 (audited) 4,525 1,112 41,556 (594) 4,816 8,745 (466) 239 7,483 67,416
Issue of share capital 10 - 2 - - - - - - 12
Share option costs - - - - 1,198 - - - - 1,198
Exercise / lapses of share options - - - 594 (545) - - - (47) 2
ESOP trust - - - - - - (39) - - (39)
Reallocation of deferred consideration share exercise costs - - - - - 420 - - (420) -
Equity dividends paid - - - - - - - - (2,268) (2,268)
Transactions with owners 10 - 2 594 653 420 (39) - (2,735) (1,095)
Profit for the period - - - - - - - - 3,338 3,338
Other comprehensive loss
Exchange movement on translation of foreign operations - - - - - - - (162) - (162)
Total comprehensive (loss) / income for the period - - - - - - - (162) 3,338 3,176
At 30 April 2023 (unaudited) 4,535 1,112 41,558 - 5,469 9,165 (505) 77 8,086 69,497
Issue of share capital 27 - - - - - - - - 27
Share options costs - - - - 1,413 - - - - 1,413
Exercise / lapses of share options - - - - (1,041) - - - 1,041 -
ESOP trust - - - - - - (21) - - (21)
Transactions with owners 27 - - - 372 - (21) - 1,041 1,419
Profit for the period - - - - - - - - 2,244 2,244
Other comprehensive income
Exchange movement on translation of foreign operations - - - - - - - 117 - 117
Total comprehensive income for the period - - - - - - - 117 2,244 2,361
Balance at 31 October 2023 (audited) 4,562 1,112 41,558 - 5,841 9,165 (526) 194 11,371 73,277
Issue of share capital 32 - 23 - - - - - - 55
Share option costs - - - - 1,102 - - - - 1,102
Exercise / lapses of share options - - - - (1,168) - - - 1,168 -
ESOP trust - - - - - - (22) - - (22)
Equity dividends paid - - - - - - - - (2,756) (2,756)
Transactions with owners 32 - 23 - (66) - (22) - (1,588) (1,621)
Profit for the period - - - - - - - - 3,253 3,253
Other comprehensive loss
Exchange movement on translation of foreign operations - - - - - - - (42) - (42)
Total comprehensive (loss) / income for the period - - - - - - - (42) 3,253 3,211
At 30 April 2024 (unaudited) 4,594 1,112 41,581 - 5,775 9,165 (548) 152 13,036 74,867
The accompanying notes form an integral part of these financial statements.
Consolidated interim cash flow statement
Note
6 months to 6 months to 12 months to
30 April 2024 30 April 2023 (unaudited) 31 October 2023 (audited)
(unaudited)
£000 £000 £000
Cash flows from operating activities
Profit for the period before taxation 4,557 4,078 7,820
Adjustments for:
Depreciation of property, plant and equipment 515 480 957
Depreciation of right-of-use assets 572 346 679
Amortisation of intangible assets 7 5,013 4,462 9,319
Acquisition / disposal finalisation costs - 299 379
Finance income (186) (8) (216)
Finance costs 1,227 840 1,532
Debt issue costs amortisation 75 60 (238)
Research and development tax credit (275) (258) (522)
Share option costs 8 1,225 1,200 2,631
Increase in receivables (2,559) (5,821) (3,325)
Increase in payables 9,332 12,285 1,048
Cash generated by operations 19,496 17,963 20,064
Tax paid (1,830) (827) (1,465)
Net cash from operating activities 17,666 17,136 18,599
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired (1,393) (2,184) (14,105)
Purchase of property, plant and equipment (544) (387) (895)
Purchase / capitalisation of intangible assets 7 (3,748) (3,398) (7,627)
Finance income 34 36 80
Net cash used in investing activities (5,651) (5,933) (22,547)
Cash flows from financing activities
Interest paid (694) (325) (1,439)
Loan drawdowns - 5,000 39,706
Loan related costs (174) (77) (169)
Loan repayments (4,706) (3,000) (30,000)
Principal lease payments (400) (423) (936)
Equity dividends paid 4 (2,756) (2,268) (2,268)
Issue of own shares (60) (106) (185)
Net cash (outflows) / inflows from financing activities (8,790) (1,199) 4,709
Net movement in cash and cash equivalents 3,225 10,004 761
Cash and cash equivalents at the beginning of the period 14,824 13,864 13,864
Exchange gains / (losses) on cash and cash equivalents 168 (146) 199
Cash and cash equivalents at the end of the period 18,217 23,722 14,824
The accompanying accounting policies and notes form an integral part of these
financial statements.
Notes to the interim accounts
1 General information
Idox plc is a leading supplier of software and services for the management of
Local Government and other organisations. The Company is a public limited
company, limited by shares, which is listed on the AIM Market of the London
Stock Exchange and is incorporated and domiciled in the UK. The address of its
registered office is Unit 5, Woking 8, Forsyth Road, Woking, Surrey, GU21 5SB.
The registered number of the Company is 03984070. There is no ultimate
controlling party.
The interim financial statements are prepared in pounds sterling.
2 Basis of preparation
The financial information for the period ended 30 April 2024 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 2023 have been filed with the Registrar of
Companies. The auditor's report on those financial statements was unqualified.
This interim report has been prepared solely to provide additional information
to shareholders to assess the Group's strategies and the potential for those
strategies to succeed. The report should not be relied on by any other party
or for any other purpose.
The report contains certain forward-looking statements. These statements are
made by the Directors in good faith based on the information available to them
up to the time of their approval of this report, but such statements should be
treated with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such forward-looking
information.
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 2024. The Group financial statements
for the year ended 31 October 2023 were prepared in accordance with
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards as issued
by the IASB. The Group has not applied IAS 34 'Interim Financial Reporting',
which is not mandatory for AIM companies, in the preparation of these interim
financial statements.
Going concern
The Directors, having made suitable enquiries and analysis of the accounts,
consider that the Group has adequate resources to continue in business for the
foreseeable future, taken to be a period of at least 12 months from the
approval of these interim financial statements. In making this assessment, the
Directors have considered the Group's budget, cash flow forecasts, available
banking facility with appropriate headroom in facilities and financial
covenants, and levels of recurring revenue.
In October 2023 the Group refinanced with the National Westminster Bank plc,
HSBC Innovation Bank Limited and Santander UK plc. The facilities comprise a
revolving credit facility of £75m and a £45m accordion and are committed
until October 2026. The Group retains significant liquidity with cash and
available committed bank facilities and has strong headroom against financial
covenants.
As part of the preparation of our FY23 results, the Group performed detailed
financial forecasting, as well as severe stress-testing in our financial
modelling, but did not identify any credible scenarios that would cast doubt
on our ability to continue as a going concern. The financial forecasting and
stress testing assumptions remain valid at 30 April 2024.
On the basis of the above considerations, the Directors have a reasonable
expectation that the Group will have adequate resources to continue in
business for the foreseeable future and therefore continue to adopt the going
concern basis in preparing the interim financial statements.
3 Segmental analysis
During the period ended 30 April 2024, the Group was organised into three
operating segments which are detailed below.
IFRS 8 Operating Segments requires the disclosure of reported segments in
accordance with internal reports provided to the Group's chief operating
decision maker. The Group considers its Board of Directors to be the chief
operating decision maker and therefore, has aligned the segmental disclosures
with the monthly reports provided to the Board of Directors.
· Land Property & Public Protection (LPPP) - delivering
specialist information management solutions and services to the public and
private sectors.
· Assets - delivering engineering document management and control
solutions to asset intensive industry sectors.
· Communities (COMM) - delivering software solutions to clients
with social value running through their core.
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 results for the six months to 30 April 2024 were:
LPPP Assets COMM £000 Total
£000 £000 £000
Revenue 28,950 7,081 7,118 43,149
Adjusted EBITDA (note 10) 9,197 1,580 2,282 13,059
Depreciation & Amortisation (3,945) (1,147) (1,008) (6,100)
Restructuring costs (16) (5) (5) (26)
Acquisition costs (12) - - (12)
Share option costs (770) (204) (251) (1,225)
Segment operating profit 4,454 224 1,018 5,696
Financing costs (23)
Operating profit 5,673
Finance income 186
Finance costs (1,302)
Profit before tax 4,557
The corporate recharge to the business unit is allocated on a head count
basis.
The segmental information for the six months to 30 April 2023 were:
LPPP Assets COMM £000 Total
£000 £000 £000
Revenue 21,458 7,177 7,146 35,781
Adjusted EBITDA (note 10) 7,735 1,811 2,557 12,103
Depreciation & Amortisation (3,032) (1,010) (1,246) (5,288)
Restructuring costs (121) (166) (42) (329)
Acquisition costs (340) - - (340)
Share option costs (741) (210) (249) (1,200)
Segment operating profit 3,501 425 1,020 4,946
Financing costs (28)
Operating profit 4,918
Finance income 61
Finance costs (901)
Profit before tax 4,078
The segment revenues by geographic location were as follows:
H1 FY24 H1 FY23
£000 £000
Revenues from external customers:
United Kingdom 38,757 31,727
North America 2,495 2,421
Europe 1,296 1,123
Rest of World 601 510
43,149 35,781
4 Dividends
During the period a dividend was paid in respect of the year ended 31 October
2023 final dividend of 0.6p per ordinary share at a total cost of £2,756,000
(H1 FY23: 0.5p per ordinary share at a total cost of £2,268,000).
The directors do not propose a dividend in respect of the interim period ended
30 April 2024 (H1 FY23: £Nil).
5 Tax on profit on ordinary activities
The tax charge is made up as follows:
6 months to 6 months to 12 months to
30 April 2024 (unaudited) 30 April 2023 (unaudited) 31 October 2023
(audited)
£000 £000 £000
Current tax
UK corporation tax on profit for the year 1,361 1,308 2,846
(Over) / under provision in respect of prior periods - (20) (90)
Total current tax 1,361 1,288 2,756
Deferred tax
Origination and reversal of timing differences (57) (525) (726)
Adjustment for rate change - (31) 7
Adjustments in respect of prior periods - 8 201
Total deferred tax (57) (548) (518)
Total tax charge 1,304 740 2,238
The UK trading losses remaining unrecognised at the end of the period relate
to brought-forward losses in respect of loss-making trades. Unrelieved trading
losses of £493,674 (H1 FY23: £749,890) remain available to offset against
future taxable trading profits (excluding unrecognised losses of £44,267 (H1
FY23: £58,806) in the UK and £15,736,014 (H1 FY23: £14,433,730) overseas).
The decision was made to maintain derecognition of these assets on the basis
these losses will not be utilised over the next three to five years. Across
the period the total deferred tax asset in respect of unrelieved trading
losses reduced from £281,000 to £127,208. There are no expiry dates for any
of the unrelieved trading losses carried forward.
6 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 to 6 months to 12 months to
30 April 2024 30 April 2023 31 October 2023
(unaudited) (unaudited) (audited)
Profit for the period (£000) 3,253 3,338 5,582
Basic earnings per share
Weighted average number of shares in issue 452,460,466 447,942,345 449,016,841
Basic earnings per share 0.72p 0.75p 1.24p
Weighted average number of shares in issue 452,460,466 447,942,345 449,016,841
Add back:
Dilutive share options 4,920,946 7,150,750 6,563,834
Weighted average allotted, called up and fully paid share capital 457,381,412 455,093,095 455,580,675
Diluted earnings per share
Diluted earnings per share 0.71p 0.73p 1.23p
Adjusted earnings per share 6 months to 6 months to 12 months to
30 April 2024 30 April 2023 31 October 2023
(unaudited) (unaudited) (audited)
Adjusted profit for the period (£000) (see note 10) 5,781 6,075 11,917
Weighted average number of shares in issue - basic 452,460,466 447,942,345 449,016,841
Weighted average number of shares in issue - diluted 457,381,412 455,093,095 455,580,675
Adjusted basic earnings per share 1.28p 1.36p 2.65p
Adjusted diluted earnings per share 1.26p 1.33p 2.62p
7 Intangibles
Goodwill Customer relationships Trade names Software Development costs Total
£000 £000 £000 £000 £000 £000
At 31 October 2023 61,555 19,692 1,840 9,601 16,097 108,785
Additions - - - 1 3,747 3,748
Amortisation - (1,075) (175) (808) (2,955) (5,013)
At 30 April 2024 61,555 18,617 1,665 8,794 16,889 107,520
No impairment charge was incurred during H1 FY24 (H1 FY23: £Nil).
8 Long-term incentive plan (LTIP)
During the period, 5,231,494 were granted under the LTIP.
The Group recognised a total charge of £1,225,000 (H1 FY23: £1,200,000) for
equity-settled share-based payment transactions related to the LTIP during the
period. The total cost was in relation to outstanding share options and share
options granted in the year.
The number of options in the LTIP scheme is as follows:
30 April 2024 30 April 2023 31 October 2023
No. No. No.
Outstanding at the beginning of the period 19,164,949 16,978,852 16,978,852
Granted 5,231,494 - 6,869,836
Forfeited (422,448) - (1,234,756)
Exercised (3,132,658) (1,626,974) (3,448,983)
Outstanding at the end of the period 20,841,337 15,351,878 19,164,949
Exercisable at the end of the period 785,530 3,473,759 2,628,342
9 Post balance sheet events
During the period Idox plc commenced a capital reduction process in order to
cancel £41,558,000 from the share premium account and £1,112,000 from the
capital redemption reserve which is subsequently transferred to retained
earnings. The copy of the order confirming the cancellation of the share
premium account and capital redemption reserve was approved by the High Court
and registered by the Registrar of Companies for England and Wales on 9th May
2024.
11 Alternative Performance Measures
Following the issuance of the Guidelines on Alternative Performance Measures
(APMs) by the European Securities and Markets Authority (ESMA) in June 2015,
the Group has included this section in its Interim Report with the aim of
providing transparency and clarity on the measures adopted internally to
assess performance. Throughout this report, the Group has presented financial
performance measures which are considered most relevant to Idox and are used
to manage the Group's performance. These financial performance measures are
chosen to provide a balanced view of the Group's operations and are considered
useful to investors as these measures provide relevant information on the
Group's past or future performance, position, or cash flows. The APMs, which
are not defined or specified under International Financial Reporting
Standards, adopted by the Group are also commonly used in the sectors it
operates in and therefore serve as a useful aid for investors to compare
Idox's performance to its peers. The Board believes that disclosing these
performance measures enhances investors' ability to evaluate and assess the
underlying financial performance of the Group's operations and the related key
business drivers. These financial performance measures are also aligned to
measures used internally to assess business performance in the Group's
budgeting process and when determining compensation. They are also consistent
with how the business is assessed by our debt and equity providers.
We believe that these measures provide a user of the Interim Report with
important additional information. The following table reconciles these APMs to
statutory equivalents:
6 months to 30 April 2024 (unaudited) 6 months to 30 April 2023 (unaudited) 12 months to 31 October 2023
£000 £000 £000
Adjusted EBITDA:
Profit before taxation 4,557 4,078 7,820
Depreciation & Amortisation 6,100 5,288 10,955
Restructuring costs 26 329 378
Acquisition costs 12 340 746
Financing costs 23 28 396
Share option costs 1,225 1,200 2,631
Net finance costs 1,116 840 1,524
Adjusted EBITDA 13,059 12,103 24,450
Free cashflow:
Net cashflow from operating activities after taxation 17,666 17,136 18,599
Capex (4,292) (3,785) (8,522)
Lease payments (400) (423) (936)
Free cashflow 12,974 12,928 9,141
Net debt / (cash):
Cash (18,217) (23,722) (14,824)
Bank borrowings 13,760 11,245 18,291
Bonds in issue 11,049 11,362 11,207
Net debt / (cash) 6,592 (1,115) 14,674
Adjusted profit for the period and adjusted earnings per share:
Profit for the period 3,253 3,338 5,582
Add back:
Amortisation from acquired intangibles 2,026 1,769 3,622
Impairment - - 168
Restructuring costs 26 329 746
Acquisition costs 12 340 378
Financing costs 23 28 396
Share option costs 1,225 1,200 2,631
Tax effect (784) (929) (1,606)
Adjusted profit for the period 5,781 6,075 11,917
Weighted average number of shares in issue - basic 452,460,466 447,942,345 449,016,841
Weighted average number of shares in issue - diluted 457,381,412 455,093,095 455,580,675
Adjusted basic earnings per share 1.28p 1.36p 2.65p
Adjusted diluted earnings per share 1.26p 1.33p 2.62p
The Group adjusts for certain non-underlying items which the Board believes
assists in understanding the performance achieved by the Group. These are
non-underlying items as they do not relate to the underlying performance of
the Group. Profit before taxation is adjusted for depreciation, amortisation,
restructuring costs, acquisition costs, financing costs, share option costs
and net finance costs to calculate a figure for EBITDA which is commonly
quoted by our peer group and allows users to compare our performance with
those of our peers. This also provides the users of the accounts with a view
of the underlying performance of the Group which is comparable year on year.
Depreciation and amortisation are omitted as they relate to assets acquired by
the Group which may be subject to differing treatment within the peer group
and so this allows meaningful comparisons to be made.
Amortisation on acquired intangibles omitted in order to improve the
comparability between acquired and organic operations as the latter does not
recognise internally generated intangible assets. Adjusting for amortisation
provides a more consistent basis for comparison between the two.
Restructuring costs, acquisition costs, financing costs and net finance costs
are omitted as they are considered to be one off in nature or do not represent
the underlying trade of the Group. The items within these categories are
assessed on a regular basis to ensure that they do not contain items which
would be deemed to represent the underlying trade of the business.
Share option costs are excluded as they do not represent the underlying trade
of the business and fluctuate subject to external market conditions and number
of shares. This would distort year-on-year comparison of the figures.
Profit after taxation is adjusted for amortisation from acquired intangibles,
restructuring costs, acquisition costs, financing costs and share option
costs, as well as considering the tax impact of these items. To exclude the
items without excluding the tax impact would not give the complete picture.
This enables the user of the accounts to compare the core operational
performance of the Group. Adjusted earnings per share takes into account all
of the factors above and provides users of the Interim Report information on
the performance of the business that management is more directly able to
influence and on a comparable basis for year to year. Readers of the Interim
Report are encouraged to review this report in its entirety.
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