Idox’s (IDOX) disappointing - and delayed - results for the year to October 2017 stemmed from a “perfect storm of issues”, according to interim chief executive Richard Kellett-Clarke. Where to begin? The 2017 General Election caused customer disruption, meaning delayed sign-offs on some new contracts. The finance team also found that revenue from nine contracts should not be recognised within these full-year numbers. And, after Idox acquired healthcare business 6PM for £18.5m, various other issues emerged – requiring the restatement of 6PM’s accounts. As a result, costs tied to this acquisition significantly dampened the group’s bottom line.
While its problems occupied management’s time and resources, 6PM enabled Idox to create a new health segment. Over nine months, this achieved considerable sales of £7.6m. Meanwhile, the public sector software division – which accounts for nearly half of total revenues – won 108 new local authority customers and now serves 94 per cent of this market. Sales here were flat at £42m, partly due to electoral revenue facing a tough comparative with 2016’s EU referendum.
Separately, Idox announced that chief executive Andrew Riley is leaving due to ill health. Mr Kellett-Clarke continues in his role. Analysts at N+1 Singer forecast pre-tax profits of £15.6m and EPS of 2.9p for the year to October 2018, up from £12.1m and 2.3p in FY2017.
| IDOX (IDOX) | ||||
| ORD PRICE: | 35.5p | MARKET VALUE: | £ 147m | |
| TOUCH: | 34.6-36p | 12-MONTH HIGH: | 77p | LOW: 26.5p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 54 | |
| NET ASSET VALUE: | 22p* | NET DEBT: | 35% | |
| Year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 57.3 | 7.5 | 2.40 | 0.70 |
| 2014 | 60.7 | 7.6 | 1.70 | 0.75 |
| 2015 | 62.6 | 9.8 | 2.20 | 0.85 |
| 2016 | 76.7 | 13.0 | 3.30 | 1.00 |
| 2017 | 88.9 | 3.5 | 0.66 | 1.04 |
| % change | +16 | -73 | -80 | +4 |
| Ex-div: | 02 Apr | |||
| Payment: | 20 Apr | |||
| *Includes intangible assets of £123m or 29.6p per share | ||||
