Helping companies push paper around more efficiently is the name of the game for Ideagen (IDEA), a provider of information management software to highly regulated businesses. Its customers tend to be in sectors such as healthcare, aerospace and defence and finance, all of which have hefty reporting requirements.
Chief executive David Homsby has said he wants Ideagen to grow quickly, both organically and through acquisitions, and these results show just that. Underlying organic revenues climbed 16 per cent, while group-wide revenues soared 43 per cent, in line with expectations. Accordingly, adjusted pre-tax profits rose 58 per cent to £1.1m. The new MSS business was bedded into the healthcare division this period, while Pentana was acquired post period-end, providing an established foothold in the financial sector. That brings the total number of acquisitions since 2011 to five.
With cash starting to pour in from operations, Ideagen was able to declare a small maiden dividend. When asked about acquisition targets, Mr Homsby replied: "I always have a pipeline of opportunities, but it takes time. Certainly, we have enough cash to do another small acquisition".
Broker finnCap expects adjusted pre-tax profits of £2.6m and adjusted EPS of 1.7p in the current fiscal year, up from £1.9m and 1.5p in fiscal 2013. Sales are typically second-half weighted.
IDEAGEN (IDEA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32p | MARKET VALUE: | £39m | |
| TOUCH: | 31-32p | 12-MONTH HIGH: | 36p | LOW: 18p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 11p* | NET CASH: | £5.3m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 2.58 | 0.24 | 0.22 | 0.00 |
| 2013 | 3.70 | 0.52 | 0.31 | 0.05 |
| % change | +43 | +126 | +41 | - |
Ex-div: 12 Feb Payment: 6 Mar *Includes intangible assets of £8.6m, or 7p a share | ||||
