Ideagen’s (IDEA) gross profits grew by a fifth in 2020, as demand for risk management software held steady in the period.
The company progressed its transition to a software-as-a-service (SaaS) model, with subscription-based revenues now making up the largest share of overall sales. The group’s annual recurring revenue (‘ARR’) book was up 34 per cent to £48.7m at the end of the period in April.
But Ideagen has also stretched its balance sheet further, pushing net bank debt up to £16.8m compared with just £1.3m last year. Much of the new debt has funded a number of acquisitions – the group bought Redland Business Solutions, Optima Diagnostics and Workrite in the period for an aggregate cash consideration of £24.1m. Management has also acquired Qualsys since the end of the year for £14m, funded by a further drawdown of its £40m revolving credit facility.
The impact of coronavirus was confined to the final two months of the period, although Ideagen was still pushed to make some redundancies. The total restructuring cost came to £0.8m, on top of a £2m impairment charge on receivables this year.
FactSet consensus estimates put statutory EPS at 2.8p for the year to April 2021, rising to 3.6p in FY2020.
| IDEAGEN (IDEA) | ||||
| ORD PRICE: | 198p | MARKET VALUE: | £ 449m | |
| TOUCH: | 196-200p | 12-MONTH HIGH: | 226p | LOW: 138p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | na | |
| NET ASSET VALUE: | 34p* | NET DEBT: | 33% | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 21.9 | 1.0 | 0.7 | 0.183 |
| 2017 | 27.1 | 0.7 | 0.4 | 0.210 |
| 2018 | 36.1 | 1.4 | 0.8 | 0.241 |
| 2019 | 46.7 | 1.4 | 0.7 | 0.278 |
| 2020 | 56.6 | -0.1 | -0.1 | 0.320 |
| % change | +21 | - | - | +15 |
| Ex-div: | 05 Nov | |||
| Payment: | 25 Nov | |||
| *Includes intangible assets of £114m, or 50p a share | ||||
