To an extent, Idox’s (IDOX) interims speak for themselves – but management’s words also suffice: it was a “difficult period” for the information management solutions supplier. It followed a disappointing year, ended October 2017, after challenges including delayed sign-offs on some new contract wins and the discovery of nine contracts that shouldn't be recognised within the preliminary results. Not to mention issues tied to healthcare business 6PM, which Idox acquired for £18.5m and led to it restating 6PM’s accounts.
For the six months to April 2018, the revenue squeeze was caused largely by reductions in the digital, engineering information management (EIM) and public sector software (PSS) divisions – partly mitigated by top-line improvements in content and health. Idox also plans to restructure the lossmaking digital division, integrating its strongest parts into the public sector business. But digital’s poor performance – along with that of PSS, health and EIM – still caused a whopping £39.5m impairment charge.
In turn, adjusted cash profits fell 72 per cent to £2.7m, while Idox swung far into the red on a statutory basis. Still, bosses have reiterated guidance for better second-half trading, although adjusted cash profits are expected to hit the lower end of the £13m-£15m range.
Broker N+1 Singer's forecasts are under review “pending greater clarity of the extent and timing of the impact of these actions on the group’s financial performance”. In March, it expected adjusted EPS of 2.9p for FY2018 (up from 2.3p in FY2017).
| IDOX (IDOX) | ||||
| ORD PRICE: | 35p | MARKET VALUE: | £145m | |
| TOUCH: | 34.6-35.4p | 12-MONTH HIGH: | 67.8p | LOW: 26.5p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | na | |
| NET ASSET VALUE: | 11p* | NET DEBT: | 56% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017** | 43.6 | 3.4 | 0.7 | 0.4 |
| 2018 | 35.2 | -43.2 | -9.8 | 0.0 |
| % change | -19 | -1362 | -1424 | -100 |
| Ex-div: | na | |||
| Payment: | na | |||
*Includes intangible assets of £80.5m, or 19p a share **Restated 2017 numbers | ||||
