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Election boost for Idox

Falling oil and gas demand and rising costs weighed on Idox's first-half results
June 9, 2015

Pressure on local government to cut costs and increase productivity fuelled demand for document-management software from Idox (IDOX) in the six months to end-April 2015. But the depressed oil price continued to weigh on the group's sales to energy clients. Coupled with higher sales costs, that pushed adjusted cash profits down 10 per cent to £7.1m.

IC TIP: Hold at 38p

Idox's main public sector division wrested business from competitors and benefited from local and national elections in the UK, sending its adjusted cash profits up 11 per cent to £6.2m. Grants and compliance revenue also rose, driven respectively by strong sales of research funding tool RESEARCHconnect to education and health clients and the acquisition of German rival Digital Spirit.

Adjusted cash profits fell by more than half to £1m in the engineering business. Although it delivered several energy projects and won a major hosting contract, that was offset by tepid demand from oil and gas clients and lower licensing sales. Management has responded by cutting costs and targeting the nuclear industry.

More positively, Idox expects its recent restructuring efforts to generate more than £3m in savings this financial year. It's also gearing up to launch AllGov, an automated national register that will provide planning, building control and licensing services to local government.

Broker N+1 Singer expects full-year EPS of 3.4p (from 3.1p in FY 2014).

IDOX (IDOX)
ORD PRICE:38pMARKET VALUE:£133m
TOUCH:37-38p12-MONTH HIGH:46pLOW: 35p
DIVIDEND YIELD:2.0%PE RATIO:24
NET ASSET VALUE:14p*NET DEBT:20%

Half-year to 30 AprTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201429.63.50.750.325
201529.63.10.650.325
% change--11-13-

Ex-div: 1 Oct

Payment: 14 Oct

*Includes intangible assets of £65.3m, or 18p a share