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Brexit boost for Idox

The company continues to make acquisitions to widen its product offering
December 15, 2016

Idox (IDOX) delivered record revenues in the year to October, with over 80 per cent generated from recurring contracts. Most of its business comes from public sector organisations, with 92 per cent of UK local authorities now signed up, having won 90 such clients in the period.

IC TIP: Buy at 63.5p

Idox provides information management services, including planning systems and election management software, and in a move to broaden its revenue base it has made a number of acquisitions including Open Objects Software in July, a move designed to boost its presence in the social care market. And, most recently, it has made a conditional offer to buy 6PM, which provides the NHS with proprietary software, infrastructure and professional services.

Over half of group revenue comes from the public sector software division, where revenue was boosted by services provided for local elections, the EU referendum and a new e-count system to be used in Scottish local elections in 2017. On the digital side, data analysis specialist Reading Room, acquired in 2015, contributed revenue of £9.1m. In collaboration with other parts of the group, it delivered two unified travel information portals enabling travellers to access all modes of transport in Cornwall and Northamptonshire.

Analysts at Progressive Equity Research are forecasting adjusted pre-tax profits for the year to October 2017 of £24m and EPS of 4.8p (from £18.8m/3.8p in FY2016).

IDOX (IDOX)
ORD PRICE:63.5pMARKET VALUE:£229m
TOUCH:63.5-64.3p12-MONTH HIGH:78pLOW: 46p
DIVIDEND YIELD:1.6%PE RATIO:19
NET ASSET VALUE:18p*NET DEBT:38%

Year to 31 OctTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201255.47.92.20.68
201357.37.52.40.70
201460.77.61.70.75
201562.69.82.20.85
201676.713.03.31.00
% change+23+33+49+18

Ex-div: 30 Mar

Payment: 21 Apr

*Includes intangible assets of £83m, or 23p a share