Shares in professional paper pusher Idox (IDOX) have been on a tear these past three years, rising more than three-fold despite austerity measures self-imposed by its mainly public sector clients. Not only has management grown market share and delivered organic growth at home in the UK, but an acquisition-led expansion into new markets and territories has driven substantial revenue and profit growth year after year.
In the six months to 31 April, however, this impressive growth stalled. Granted, it was a tough comparator year, with a couple of big deals boosting sales in the first half of 2012. But even though revenues stayed largely flat year on year, a higher cost base meant adjusted profits fell by almost a third. It didn't help that several large deals in the fast-growing Engineering Information Management (EIM) division failed to complete before the period end.
Still, Idox chief executive Richard Kellett-Clarke expects a stronger second-half performance as the deals are finally signed and says the group should meet full-year expectations. The acquisition of Artesys in April bodes well for future growth in the increasingly important EIM division.
Broker finnCap expects sales of £60.4m and adjusted EPS of 3.2p in the current year, compared with £55.4m and 3.2p in fiscal 2012. The broker forecasts a return to substantial growth in 2014, when it expects adjusted EPS of 4.1p.
IDOX (IDOX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37.5p | MARKET VALUE: | £131m | |
| TOUCH: | 37-38p | 12-MONTH HIGH: | 60p | LOW: 34p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 11p* | NET DEBT: | 45% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 27.1 | 3.41 | 0.67 | 0.28 |
| 2013 | 26.6 | 2.14 | 0.43 | 0.30 |
| % change | -2 | -37 | -36 | +9 |
Ex-div: 7 Aug Payment: 21 Aug *Includes intangible assets of £71.2m, or 20p a share | ||||
