In its full year to October 2017, Idox (IDOX) will benefit from the UK's general election. The group provides information management solutions to a number of local councils and has 82 per cent revenue visibility for its election services subsidiary in the second half. However, in these half-year results, the benefits are yet to come through and election revenue fell 44 per cent to £2.3m, leaving total group like-for-like revenue down 2 per cent.
On a reported basis, Idox's numbers were enhanced by three acquisitions made in the last 12 months which contributed £7.9m of revenue and £1m of adjusted cash profit. However, these new businesses have resulted in a substantial increase in sales, staff and administrative expenses, while restructuring costs nearly doubled to £394,000. That said, even on an adjusted basis, pre-tax profit fell 12 per cent to £6.9m.
But management expects a change of fortune in the second half thanks to the pick-up in higher-margin election sales and the first full six months contribution of the new health division, which contributed £3.4m to the top line since its acquisition in February. Broker N+1 Singer is also confident about sustained annual profit growth and has retained its forecasts for the year to October 2017. Pre-tax profit is expected to be £21.2m, giving EPS of 4.2p (from £16.7m and 4p in FY2016).
IDOX (IDOX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 69p | MARKET VALUE: | £280m | |
| TOUCH: | 68.8-70.8p | 12-MONTH HIGH: | 78p | LOW: 56p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 22p* | NET DEBT: | 31% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 37.2 | 6.5 | 1.71 | 0.35 |
| 2017 | 44.2 | 4.1 | 0.87 | 0.39 |
| % change | +19 | -38 | -49 | +10 |
Ex-div: 5 Oct Payment: 18 Oct *Includes intangible assets of £118m, or 29p a share | ||||
