The integrated risk management software market was worth around $5bn (£3.9bn) globally in 2017, according to research house Gartner, and is growing by 13 per cent each year. This momentum should, ostensibly, underpin an excellent long-term opportunity for Ideagen (IDEA) – a provider of risk management software to highly regulated industries.
The company continues to fare well. Half-year numbers to 31 October 2018 revealed 8 per cent underlying organic sales growth, and a 30 per cent rise in recurring revenues to £14m. Recurring revenues thus constituted 67 per cent of the top line, up from 63 per cent this time last year. Management is aiming to reach 74 per cent by the end of 2020.
Signalling further progress on the shift towards a software-as-a-service (SaaS) model, like-for-like SaaS bookings rose by 80 per cent to £6.6m. And while Ideagen did swing into the red, this stemmed from higher acquisition costs – after the purchase of Morgan Kai and InspectionXpert in September – along with higher depreciation and amortisation charges and share-based payments. Adjusted pre-tax profits, meanwhile, climbed 17 per cent to £4.8m.
Broker FinnCap expects adjusted pre-tax profits of £12.1m and EPS of 4.8p for the year to April, rising to £15.1m and 5.8p for FY2020 (FY2018: £9.7m and 4.2p).
| IDEAGEN (IDEA) | ||||
| ORD PRICE: | 132p | MARKET VALUE: | £ 288m | |
| TOUCH: | 130-133p | 12-MONTH HIGH: | 174p | LOW: 103p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 33p* | NET DEBT: | 2% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 17.2 | 0.75 | 0.44 | 0.08 |
| 2018 | 21.0 | -0.64 | -0.27 | 0.09 |
| % change | +22 | -184 | -161 | +15 |
| Ex-div: | 28 Feb | |||
| Payment: | 20 Mar | |||
| *Includes intangible assets of £91.1m or 42p a share | ||||
