Ideagen’s (IDEA) future earnings visibility improved in the year to April, thanks to its ongoing shift away from a perpetual licensing model and towards a software subscription model. That's borne out by so-called ‘software-as-a-service’ (SaaS) sales, which were up 76 per cent to £8.4m, while recurring revenues constituted 62 per cent of the top line. And the group – which supplies information management software to highly-regulated industries – enjoyed a 63 per cent rise in new sales bookings to £22.7m, laying the foundations for revenue streams to come.
While 11 per cent of the company’s revenue growth was organic, the rest derived from recent acquisitions – with one example being PleaseTech, a provider of document collaboration and review software which has bolstered Ideagen’s defence and life sciences offering. In April, the group made its first US acquisition in the form of Medforce – a healthcare software business – for $8.7m (£6.2m), gaining 300 US customers in the process. Generally, the group is expanding its global presence; over the reporting period, 78 per cent of new SaaS wins were non-UK based.
Broker finnCap forecasts adjusted pre-tax profits of £11.4m and EPS of 4.8p for the year ending April 2019 (from £9.7m and 4.2p in FY2018).
| IDEAGEN (IDEA) | ||||
| ORD PRICE: | 132p | MARKET VALUE: | £267m | |
| TOUCH: | 131-132p | 12-MONTH HIGH: | 133p | LOW: 78p |
| DIVIDEND YIELD: | 0.2% | PE RATIO: | 171 | |
| NET ASSET VALUE: | 25p* | NET CASH: | £0.8m | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 9.0 | 1.1 | 0.7 | 0.150 |
| 2015 | 14.4 | 0.6 | 0.4 | 0.165 |
| 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 |
| % change | +33 | +111 | +93 | +15 |
| Ex-div: | 1 Nov | |||
| Payment: | 21 Nov | |||
| *Includes intangible assets of £60.3m, or 30p a share | ||||
