REG - IDOX PLC - Final Results
28/01/2025 07:00
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RNS Number : 8657U IDOX PLC 28 January 2025
28 January 2025
Idox plc
('Idox' or the 'Group' or the 'Company')
FY24 Results
"A strong performance in line with expectations with 20% growth in revenue"
Idox plc (AIM: IDOX), a leading supplier of specialist information management
software and geospatial data solutions to the public and asset intensive
sectors, is pleased to report its financial results for the year ended 31
October 2024.
Financial highlights
Reconciliations between adjusted and statutory earnings are contained at the
end of this announcement.
Revenue
· Revenue increased by 20% to £87.6m (2023: £73.3m), driven by
growth in the Land, Property & Public Protection (LPPP) division,
including a full year's contribution from Emapsite.
· Recurring revenue(1) increased by 20% to £54.5m (2023: £45.5m),
accounting for 62% of the Group's total revenue (2023: 62%).
Profit: Adjusted
· Adjusted(2) EBITDA increased by 7% to £26.1m (2023: £24.5m).
· Adjusted(2) EBITDA margin was as anticipated at 30%, principally
driven by mix changes (2023: 33%).
· Adjusted(3) diluted EPS stable at 2.61p (2023: 2.62p).
Profit: Statutory
· Statutory operating profit increased by 7% to £10.0m (2023:
£9.3m).
· Statutory operating profit margin was 11% (2023: 13%).
· Statutory profit before tax increased by 3% to £8.1m (2023:
£7.8m).
· Statutory diluted EPS decreased by 7% to 1.15p (2023: 1.23p).
Cash and debt
· Net debt(4) at 31 October 2024 was £9.9m (2023: £14.7m).
· Cash generated from operating activities before taxation was up
26% at £25.2m (2023: £20.1m) and represented 96% of Adjusted EBITDA (2023:
82%).
· Free cashflow(5) generation was up 27% at £11.6m (2023: £9.1m).
· Extension of banking facilities completed in October 2024,
providing the Group with significantly increased resources to fund strategic
M&A ambitions: £75m revolving credit facility and £45m accordion through
to October 2027.
Dividend
· Proposed final dividend increased by 17% to 0.7p per share (2023:
0.6p), reflecting our strong financial position and our confidence in the
future.
Operational highlights:
· Record full year order intake up 23% on FY24 to £102m,
reflecting our high-quality customer base and providing good visibility into
FY25, including recently announced contract wins with North Yorkshire Council
and Malta.
· Strong performances in LPPP through our local Government, Cloud
and geospatial capabilities. Good performance in Communities aided by the
successful delivery of UK election services in 2024. An overall stable revenue
performance in Assets.
· Recent acquisition strategy coupled with existing capabilities
has created a strong geospatial offering which leaves the Group well placed
for further growth opportunities in this sector through the leadership of a
newly appointed head of geospatial.
· Further investment with Board and senior appointments in People,
and Revenue & Strategy functions to support our well established
divisional structure.
· Continued investment and growth in India based operations
providing increased levels of services, support and customer satisfaction.
David Meaden, Chief Executive of Idox said:
"We are pleased to have delivered a strong performance in 2024, featuring a
20% growth in revenue and increased Adjusted EBITDA. We have made an
encouraging start to FY25, with trading in line with the Board's expectations.
Our most recent acquisition, Emapsite, has added significant scale and
expertise to our existing geospatial data capabilities, and has performed well
in the year. We continue to be excited by the growth opportunities available
in this sector, adding to our existing market leading public software
capabilities. We continue to evaluate the opportunity for further acquisitions
to enhance our offering and are optimistic on the pipeline as we move into
2025.
The Group's longer-term outlook remains positive and gives the Board
confidence in Idox's continued ability to deliver profitable managed growth
and sustainable cash generation, and in turn significant ongoing shareholder
returns."
There will be a webcast at 9:30am UK time today for analysts and investors. To
register for the webcast please contact MHP at idox@mhpgroup.com
For further information please contact:
Idox plc +44 (0) 870 333 7101
Chris Stone, Non-Executive Chairman investorrelations@idoxgroup.com
David Meaden, Chief Executive Officer
Anoop Kang, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker) +44 (0) 20 7418 8900
Benjamin Cryer
Kate Bannatyne
Adam Telling
MHP + 44 (0) 7831 406117
Reg Hoare idox@mhpgroup.com (mailto:mhpc@idoxgroup.com)
Ollie Hoare
Matthew Taylor
About Idox plc
For more information see www.idoxplc.com
(https://protect.checkpoint.com/v2/r06/___http:/www.idoxplc.com/___.ZXV3MjpuZXh0MTU6YzpvOmJhMzc1MzFjM2I4ZTdjYjFhMGJkMDdiN2YwYmUzM2MwOjc6OGNiNDpiMjZkNGEzZGI4YWFkNWU1OWE2OGVhMDgwZTM2NTQ0Mjk4OGViMzI0M2E3MjNlNGU1NzJjZDMzNDZiYTVkOTI3OnA6VDpU)
@Idoxgroup
Alternative Performance Measures (APMs)
The Group uses these APMs, which are not defined or specified under
International Financial Reporting Standards, as this is in line with the
management information requested and presented to the decision makers in our
business; and is consistent with how the business is assessed by our debt and
equity providers.
(1) Recurring revenue is defined as revenues associated with access to a
specific ongoing service, with invoicing that typically recurs on an annual
basis and underpinned by either a multi-year, rolling contract or highly
repeatable services. These services include Support & Maintenance, SaaS
fees, Hosting services, and some Managed service arrangements which involve a
fixed fee irrespective of consumption.
(2) Adjusted EBITDA (earnings before interest, tax, depreciation and
amortisation) is defined as earnings before amortisation, depreciation,
restructuring, acquisition costs, impairment, financing costs and share option
costs.
(3) Adjusted EPS excludes amortisation on acquired intangibles, restructuring,
financing, impairment, share option and acquisition costs.
(4) Net debt is defined as the aggregation of cash, bank borrowings and
long-term bond. This differs from a similar measure under IFRS, which would
also include lease liabilities as debt. The definition used is consistent with
that used within the Group's banking arrangements.
(5) Free cashflow is defined as net cashflow from operating activities after
taxation less capital expenditure and lease payments.
Annual financial report announcement
The extracts below are from the Annual Financial Report 2024. Note references
refer to notes included in this Annual Financial Report Announcement 2024.
Chair's statement
Introduction
I am very pleased to be able to report a positive set of results to all of our
shareholders and other stakeholders for the financial year ended 31 October
2024. This is the sixth year in a row that we have grown revenues, recurring
revenues and Adjusted EBITDA, with good cash generation. This is an excellent
track record delivered by the whole Idox team. The business has maintained its
trajectory of improving our core, organic metrics whilst continuing with a
very focused acquisition programme. Whilst we did not complete any new
acquisitions in the year, those that were completed in prior periods have
contributed very strongly to our performance this year, allowing us to deliver
revenue growth of 20%, and good growth in profits. Our Adjusted EBITDA margin
dipped slightly as we worked through the integration of our acquisitions, but
all the acquisitions that we have made have grown our addressable market so
that we can continue to find new growth opportunities, whilst continuing to
benefit from the solid foundations of our strong core market positions. This
strength is evidenced through our recurring revenue, our margins, and cash
generation.
This year we have made some changes to our Board composition. As the business
is developing, we felt the need for greater levels of executive exposure to,
and contribution at, the Board level, and we were therefore very pleased to
appoint Jonathan Legdon, our Chief Operating Officer, to the Board in October
2024. This was an opportunity for him to broaden his experience, and for the
Board to ensure an even greater focus on the very important operating metrics
in the business. At the same time, we wanted to make sure that we were
enhancing the specific experience of the Non-Executive Board members in the
market areas that are becoming increasingly important to us, in particular the
geospatial technology and support services area. I was therefore very pleased
to be able to announce the appointment of Mark Milner to our Board in July
2024. Mark has excellent direct relevant experience in this market, which we
expect to be an important contributor to the next phase of Idox growth. These
changes enhance the level of challenge and debate in our Boardroom, with the
intention of supporting our Executive team in their drive to build the
business. We have also continued to ensure that the other Non-Executive
Directors (NEDs) and I engage directly with shareholders on a regular basis,
taking on board their feedback and ensuring that their views are reflected in
the direction of the business. We have also engaged independent external
advisors to review our Board practices and our remuneration policies.
As mentioned, we did not complete any further acquisitions in 2024, but
following the acquisition of Emapsite in August 2023, we have been focused on
integration and ensuring that the business works well in our structure.
Emapsite is an excellent business, and their offerings dovetail well with
those of our previous acquisitions and our original capabilities in the
geospatial data management space. The acquisitions of Aligned Assets,
thinkWhere, exeGesIS, LandHawk and now Emapsite have put Idox in a very strong
position to build exciting new revenue streams around our core assets in
property data management. The market opportunity created by the combination of
these capabilities is large, and it will be a major focus of investment for
the Group in the years to come. As mentioned above, we have strengthened our
Board with this focus in mind.
Performance towards achieving our internal goal of 35% Adjusted EBITDA margin
dipped as we worked through the integration of Emapsite. We still have some
improvements to come in that area through the benefits of the integration of
our previous acquisitions, but we are also making a big effort to ensure that
we are seeing appropriate levels of return on our continuing investment in
product development. As a business with strongly differentiated IP at its
heart, continuous investment in innovation and development is essential, but
we recognise the need to ensure excellent return on investment (RoI) for those
investments. However, revenue growth of 20%, with recurring revenue up 20%
over the period, delivering a 7% increase in full year Adjusted EBITDA is a
pleasing set of results. To be able to deliver such a strong core performance
whilst at the same time increasing the addressable market opportunity is an
excellent performance. We will continue to target further acquisitions to
allow us to continue to leverage the platform that we have created through our
operational investments.
Like nearly every business, Idox is continuing to work on creating the optimal
working pattern for our colleagues in the post-covid world. We strive to make
sure that we have the right blend of home and office work, and essential and
non-essential travel, that allows our colleagues to be efficient but also
continue to benefit from the lifelong development and learning opportunities
that are an important part of corporate, office life. Employers need to work
hard and creatively to enable appropriate new ways of working that meet all
these new requirements without allowing a drop in the most important thing,
excellent customer service. I have been impressed by the continuing positive
attitudes and behaviours of all our colleagues at Idox, which have enabled
this ongoing strong performance. We will continue to work to ensure that we
maintain the right blend of work experience that meets our colleagues needs
whilst also ensuring the continuous development of our skills and
capabilities.
Cultural development is an essential part of this value. It is not only
important for the employees themselves that we create a strong and thriving
culture, where all of our colleagues feel valued and appreciated, but it is
also an essential component in delivering value to our customers. It is clear
to me that customers know when they are supported by an organisation that has
a strong and positive culture, and indeed cultural alignment can be a very
strong driver of customer satisfaction. At Idox, customer satisfaction remains
very strong, and this is driven by the fact that we have a very clear set of
shared values, that hold quality, customer value, owning commitments and
"doing the right thing" as essential and non-negotiable elements of the Idox
experience. It is with these values in mind that we continue to develop talent
within the business creating an environment where growth and innovation is a
natural output of our work together.
Group strategy
The Group continued its focus on providing digital solutions and services to
the LPPP public sector customers in the United Kingdom, complemented by our
Assets & Communities sectors servicing customers across the world.
However, we are increasingly focused on the broader geospatial data market.
The key to our success is to ensure we deliver better user results and
productivity improvements for customers through focusing on usability,
functionality and application of integrated digital and increasingly
cloud-based technologies and solutions. The identification of attractive
acquisition opportunities that can enhance the Group's scale and capabilities,
and the integration of completed acquisitions, is a key part of management
focus and effort.
Board
There have been two additions to the Board in FY24, as reported above. I
consider the effectiveness of the Board, which includes the contributions of
the individual Board members, throughout the annual governance cycle. The
current Board members are operating collectively and effectively to govern the
business in an efficient and productive manner.
The additions to the Board were made to make sure that it develops in line
with the evolving needs of the business. I am satisfied that there is
sufficient diversity in the Board structure to bring a balance of skills,
experience, independence, and knowledge to the Group. The two new additions
bring significant enhancement to these capabilities, and I believe that we
have a balanced and effective Board, however, I intend to keep this balance
under review and continued assessment.
Corporate governance
We are cognisant of the important responsibilities we have in respect of
corporate governance and shaping our culture to be consistent with our
objectives, strategy, and business model which we set out in our Strategic
Report and our description of Principal Risks and Uncertainties. The Group is
committed to conducting its business fairly, impartially, in an ethical and
proper manner, and in full compliance with all laws and regulations. In
conducting our business, integrity is the foundation of all Company
relationships, including those with customers, suppliers, communities, and
employees.
Dividends
The Board has proposed an increased final dividend of 0.7p (2023: 0.6p) for
FY24. Subject to approval at the AGM, the final dividend will be paid on 18
April 2025 to shareholders on the register as at 4 April 2025. This decision
was reached after a full consideration of the continuing growth opportunities
before the business, our strong financial position and our confidence in the
future.
Summary and outlook
The financial results of the last year reflect the increasing quality of the
Idox business. We operate in attractive markets, with strong market positions
and insights, and we have every confidence that we can continue the excellent
progress we have seen in FY24. The changes that we have made in the last few
years, to the team, our structure, systems, and processes have delivered a
major improvement in our financial performance. As a result, we have enjoyed
improved stability in performance and confidence for the future, based on
strongly improving orderbooks and levels of recurring revenue. We have some
continuing work to do to improve our margins towards the targets that we have
set for ourselves, and that will be a specific focus for the next period. On
top of this, we can now point to exciting growth opportunities in the
geospatial data markets. I am delighted to have had the opportunity to work
with all my Idox colleagues during a period of such tremendous improvement and
I look forward to continuing that work in delivering growing value to all our
stakeholders.
Idox stakeholders are fortunate that such a talented group of people have
chosen Idox as a place they want to work. Their expertise and diligence have
continued to deliver the support and value that our customers expect, and I am
pleased to extend my thanks to all of them.
Chris Stone
Chair
Chief Executive's review
The Chair has referenced our continued progress, and I am pleased to reflect
on a year where we have delivered growth in revenue, Adjusted EBITDA,
operating profit and improved cash generation.
Idox operates in attractive core markets which provide significant
opportunities for growth in the long term. As a result, the business benefits
from the strong foundations of recurring revenue, solid margins and
differentiated value.
Our adherence to the Four Pillars of Revenue, Margins, Simplification and
Communication remains steadfast and we continue to grow both organically and
by complementary acquisitions that expand our software and data capabilities.
We ensure a disciplined approach to capital allocation in support of this
goal, ensuring that our R&D expenditure is targeted in the right areas and
that we maintain a rigorous approach to ensuring that acquisitions are
complementary, adding to our existing product portfolio as well as extending
the addressable markets we can reach.
We remain a consistent 'rule of 40' business, where our Adjusted EBITDA margin
plus revenue growth percentages exceed 40% and this will continue to be at the
forefront of our thinking over the coming years.
During the year we completed the integration of the Emapsite business acquired
in 2023. The business grew well in the year and has demonstrated the benefit
of adding further geospatial and data capabilities to our extensive product
and service portfolio. The acquisition has also provided us with access to
wider and faster growing private sector markets that can benefit directly from
Idox product and data insights gained from the planning and property markets.
The team at Emapsite has integrated well with the overall Group and we are
pleased to have such a strong, innovative team as part of our dynamic Company.
New opportunities
Client retention remains strong and plans to modernise and improve planning
regulations, to improve national infrastructure and to build more homes will
continue to drive the adoption of cloud-based services across Local
Authorities. We see that there will be significant opportunities to manage the
processes of building that infrastructure as well as monitoring the management
of those assets once completed. This alongside the desperate need for
effective Special Educational Needs and Disabilities (SEND) services in social
care and a desire to improve the efficiency of our health service, will
continue to offer substantial opportunities for Idox in the coming years.
The new Government's desire to derive the benefits of a digitised economy
should also present an array of opportunities moving forward. We believe we
are well placed to help our markets navigate the technology and change
activities necessary. This will involve helping Local Authorities to drive
efficiency, effectiveness and public engagement through digital channels. It
will also open new opportunities within the supporting Land and Property
eco-system with information and software which allows them to drive revenue
growth whilst also managing their business risks and improving their
efficiency. We believe the next decade will bring significant opportunities
for Idox to provide software and data that connect the wider eco-system of
local authorities, planners, private developers, land agents, construction
companies, estate agents, conveyancers and others who need to access land and
property data and processes.
We are aware that these changes have been identified by successive Governments
and that the capacity and resources available to drive change in the Local
Government sector are limited. Many Local Authorities are facing near term
funding challenges, and we are focussed on providing the best usable
technology and value for money solutions that deliver improved automation,
insight, and efficiency in their operations. We remain engaged and willing
partners to drive the necessary improvements with our clients and to provide
the capacity and resources necessary to drive their digital success.
Scaling operations
We are leaders in our chosen markets and respected providers of management
software that provides data insights to some of the most essential sectors in
the world. As the Chair has indicated, we continue to look diligently for
businesses that would add scale to our operations and allow us to leverage
existing investments in sales and marketing, software development and
operations and we retain substantial resources at our disposal for such
activity with a revolving credit facility and accordion of £75m and £45m,
respectively. We are appreciative of the insight and support we receive from
our banking partners HSBC Innovation Bank, NatWest and Santander and for their
efforts in support of our goals during the year.
Our people
The Chair has referenced some of the significant executive additions to the
business made during the year. At an operational level we continue to refine
our model and to bring our teams together in ways that allow for greater
collaboration and knowledge-sharing. We have continued to develop our centre
of excellence in Pune, India and see this as a significant part of our
operations as we develop the Group moving forward. We have established a
strong participative engagement model with all our people across Idox and we
aim to support their aspirations to progress at whatever level that may take,
be it in deepening their skill sets, developing their leadership capabilities,
providing progression opportunities and supporting them with any specific need
they may have. We prioritise communication and engagement across the Group.
Our CEO Broadcasts are a significant part of that pillar and continue to be
very well attended. Similarly, our development and product teams operate
several 'show and tell' events during the year to share best practice, inform
their colleagues of progress and of lessons learned during new technology use
and deployment.
Our 'Be Heard' survey, aimed at making Idox an inclusive workplace allowing
everyone to be their best selves has also been well supported and shaped much
of our thinking in areas such as work support and recruitment practice.
Alongside our Workplace Wellbeing team and Idox Elevate, the networks that
have come together to support Pride@Idox and Neurodiversity@Idox are designed
to raise awareness of the issues faced by these communities, share learning
and understanding of how to be inclusive to those that identify as such, and
to provide a safe space for colleagues to converse confidentially. I am
especially grateful to our colleagues that commit their time to these
activities. They enrich our business and provide great examples of how to have
a positive impact at work.
Outlook
We are pleased to have delivered a strong performance in 2024, featuring a 20%
growth in revenue and increased Adjusted EBITDA. We have made an encouraging
start to FY25, with trading in line with the Board's expectations.
Our most recent acquisition, Emapsite, has added significant scale and
expertise to our existing geospatial data capabilities, and has performed well
in the year. We continue to be excited by the growth opportunities available
in this sector, adding to our existing market leading public software
capabilities. We continue to evaluate the opportunity for further acquisitions
to enhance our offering and are optimistic on the pipeline as we move into
2025.
The Group's longer-term outlook remains positive and gives the Board
confidence in Idox's continued ability to deliver profitable managed growth
and sustainable cash generation, and in turn significant ongoing shareholder
returns.
David Meaden
Chief Executive Officer
Chief Operating Officer's review
Our core values and our four pillars guide our business operations and
strategy, this structural approach has generated stability and steady growth.
Together with strong operational controls and focussed management teams, this
provides a strong platform from which we can securely look to accelerate
growth in FY25.
To reach our ambitious goals we have taken the opportunity to further enhance
our leadership teams and fully equip the business for continued expansion and
growth.
We have spent time and great care in finding the best individuals for key
posts across the Group. The appointment of Ian Churchill in April 2024 as
Chief Revenue & Strategy Officer demonstrates a strong push towards our
innovation-led growth plan. His experience as a CEO in software businesses
across the private sector lends serious backing to our developmental
strategies.
Since August 2024, Trace Durning has been guiding our employee proposition to
even greater heights as Head of Organisational Development and Design.
Powerful, dynamic frameworks for colleagues to succeed and grow are vital to
Idox's character as a business, and Trace brings vast experience and expertise
in driving strategic transformation and change to enhance who we are as a
Company and an employer.
Most recently, Alex Wrottesley - a highly respected voice in the geospatial
industry with a strong background in establishing organisations within that
sector - was appointed to lead our geospatial capabilities. Since joining us
in September, Alex has already drawn from experiences in pioneering geospatial
firms and technologies to lead this fast-growing section of our business and
to position Idox as a major force in the wider geospatial arena.
These new appointments are in line with broader organisational changes to both
allow new key personnel to better execute their visions, and to grant
colleagues greater capacity to collaborate, exchange knowledge, generate
ideas, and improve our offering.
For example, we have centralised our People & Talent, Communications, and
Digital Marketing to function as a single unit to boost the central operations
that reach into every corner of the business, delivering operational
improvements and cost optimisation. Under Alex we have combined all of our
geospatial talent from across Idox, including Emapsite, Exegesis, thinkWhere
and Landhawk to provide a fertile space for building exciting new innovations,
creating streamlined operations and facilitating fluid cooperation across all
of our geospatial platforms.
Artificial intelligence (AI) is one of the biggest topics in tech right now,
and our approach to it is both optimistic and responsible. An
interdisciplinary AI Committee comprising of product innovators, engineers,
legal, and creative professionals have developed an AI policy alongside a
confirmed list of approved AI tools to safeguard data and practices. Employees
have been encouraged to experiment with AI integration, particularly now the
Company has signed up for a corporate account with Tricentis and will continue
to provide feedback upon which we can sculpt and fashion the most innovative
but secure usage of cutting-edge technologies into our working processes. We
are excited about the opportunities that AI and Machine Learning brings to
both our software user experience and data services over the coming years.
We continued to invest into our India based operations in 2024, this included
opening a new larger office in Pune, strengthening the local management teams
and investing in our people and operations. We believe this continued
investment in India is important to our overall growth strategy and customer
focus, helping to improve the availability of our services, services
resilience and improving customer satisfaction.
Sales and contract wins
A key measure of our forward momentum and provision of future revenues for the
Group is our order intake, which in FY24 showed continued growth and delivered
over £102m in orders, exceeding our in-year Revenues by 15% and an
improvement on our prior year by over 23%.
We continued to see high volumes of order intake across the markets that we
serve, and in particular, new business wins and new revenue from existing
customers, which made more up than a third of contract wins. There were a
number of notable deals throughout FY24, these included:
In LPPP, Idox have partnered with North Yorkshire County Council to deliver a
services consolidation project worth £2.4m that will transform eight Planning
authority systems together into a single service provision, delivering
significant improvements for local people, communities and businesses across
the County. This is a clear example of the extensive experience Idox has in
supporting Local Government reorganisation across the UK. In the past we have
assisted many other customers through technology and service improvement to
help adopt a unitary model from the existing District/County two tier systems,
including Shropshire, Cornwall, Durham Bedfordshire and Northumberland.
Within LPPP, our geospatial businesses have continued to deliver an impressive
growth trajectory throughout FY24, showing that the collective skills,
capabilities and resources of the combined team offers the market a truly
unique proposition. New customers, Wales & West Utilities and Property
Risk Inspection (Nationwide) are utilising our Data and Mapping services in
contracts worth £1.1m and £0.65m, respectively, and international customers
Natuurmonumenten and Staatsbosbeheer extended access to our Geospatial -
Countryside Management Solutions.
Our Communities Division, amongst other wins secured a £2.5m contract
extension for the Electoral Commission Malta that will see Idox deliver
Software and Services for the next five years.
In 2024, the Assets Division confirmed longer-term agreements with Wood Group
and CRNL in North America in contracts worth $1.6m & $1.4m respectively.
Additionally, a contract was agreed worth $0.8m to help Oxy Inc to consolidate
its operations onto our highly successful McLaren Enterprise platform, work
that was commenced in FY24 and will complete in 2025.
Markets
Our strong market positions provide an important platform from which Idox can
offer unparalleled insights and influence in decision making and policy
setting. Meeting regularly with The Department for Education (DfE) &
National Association of Family Information Services (NAFIS) regarding SEND
& Social Care matters, BASHH (The British Association for Sexual Health
and HIV), the NHS and UK Health and Security Agency, these important
partnerships help drive sustainable long-term change and improvements to the
industry and directly to citizens across the UK.
We work with Ministry of Housing, Communities and Local Government (MHCLG)
across several areas, most notably in the Open Digital Planning Group
reviewing planning reform and its impacts both nationally and locally. As the
market leading solutions provider in the historic environment Sector, we are
also instrumental in delivering the objectives of the Levelling Up and
Regeneration Act for conservation and improved planning processes. Given the
MHCLG's remit, our relationships extend to the UK Election Groups, regarding
execution and future reforms, in addition to the devolved Election bodies in
Welsh Government, Scottish Government and the Electoral Office of Northern
Ireland.
We also maintain strong connections and attendance across industry groups
connected to our markets including the Geospatial Commission, Natural England,
Historic England, Local Authority Building Control, and the Institute of
Licensing & the Chartered Trading Standards Institute.
Communication
We continue to execute and evolve an open communications strategy.
Transparency of leadership is evident throughout the year. Regular CEO
broadcasts to keep all employees up to date with wider Company movements,
while Breakfast with the Board provides colleagues with the chance to meet
executives face-to-face in a safe space for regular dialogue, questions, and
queries.
Workplace Wellbeing sessions populate our yearly calendars, interspersed with
guest speakers to share knowledge and experience on a range of social topics.
There is continual interaction between groups, departments, and teams around
essential issues that matter to us all.
To help our internal communication channel and provide a platform where we can
inform and celebrate with colleagues our successes, I provide a regular
monthly blog of content from across the business, including contract wins,
project successes, interesting software developments and innovations.
The employees of Idox increasingly constitute a community, using our internal
social platform, through Idox sponsors. This community engages in facilitating
key groups to encourage and support colleagues:
· Workplace Wellbeing
· Pride @ Idox
· Diversity, Equity, Inclusion and Belonging
· Neurodiversity
· Elevate - Building gender equality at all levels of Idox
Our communities are further enriched with special interest groups bringing
colleague communities together (including photography, knitting and even a
group to serve the armchair historians of Idox).
Reflection
The past year has delivered a strong order intake performance, growing
revenues and Adjusted EBITDA, delivering on our expectations for 2024 and
creating a robust and effective platform for our continued growth aspiration
for 2025. We have made key strategic investments in our people and services,
and continue to promote an inclusive, professional development-centric
culture. We are excited by the significant opportunities we see in the coming
year, and we are confident in our capacity to execute against them.
Jonathan Legdon
Chief Operating Officer
Financial review
I am pleased to report that Idox has delivered strong revenue growth in FY24
as well as good improvement in Adjusted EBITDA and cash generation.
The following table sets out the revenues and Adjusted EBITDA for each of the
Group's segments from its continuing activities:
2024 2023 Variance
£000 £000 £000 %
Revenue
- LPPP 55,264 43,413 11,851 27%
- Assets 14,893 14,845 48 0%
- Communities 17,442 15,019 2,423 16%
- Total 87,599 73,277 14,322 20%
Revenue split
- LPPP 63% 59%
- Assets 17% 20%
- Communities 20% 21%
- Total 100% 100%
Adjusted EBITDA*
- LPPP 16,854 13,885 2,969 21%
- Assets 3,299 4,199 (900) (21%)
- Communities 5,898 6,366 (468) (7%)
- Total 26,051 24,450 1,601 7%
Adjusted EBITDA margin
- LPPP 30% 32%
- Assets 22% 28%
- Communities 34% 42%
- Total 30% 33%
Revenues
2024 2023(1) Variance
£000 £000 £000 %
Revenues
- Recurring (LPPP) 34,898 26,214 8,684 33%
- Recurring (Assets) 9,418 9,692 (274) (3%)
- Recurring (Communities) 10,158 9,622 536 6%
- Total recurring 54,474 45,528 8,946 20%
- Non-recurring (LPPP) 20,366 17,199 3,167 18%
- Non-recurring (Assets) 5,475 5,153 322 6%
- Non-recurring (Communities) 7,284 5,397 1,887 35%
- Total non-recurring 33,125 27,749 5,376 19%
- Total continuing revenue 87,599 73,277 14,322 20%
- Recurring* 62% 62%
- Non-recurring** 38% 38%
(1) The 2023 recurring and non-recurring figures have been represented in
order to allocate some Emapsite revenues as recurring within the LPPP segment.
The decision was made in FY23 to include all Emapsite revenues as
non-recurring as a prudent measure until we better understood the nature of
the revenue streams following their acquisition in August 2023. This has
resulted in a re-presentation of £1.9m from non-recurring to recurring.
* Recurring revenue is defined as revenues associated with access to a
specific ongoing service, with invoicing that typically recurs on an annual
basis and underpinned by either a multi-year, rolling contract or highly
repeatable services. These services include Support & Maintenance, SaaS
fees, Hosting services, and some Managed Service arrangements, which involve a
fixed fee irrespective of consumption.
** Non-Recurring revenue is defined as revenues without any formal commitment
from the customer to recur on an annual basis.
Revenue from continuing operations for the Group increased 20% in the year to
£87.6m (2023: £73.3m). LPPP was up 27% for the year at £55.3m (2023:
£43.4m) and benefitted from a full year contribution from Emapsite as well as
good growth from our Local Government and Cloud solutions. Assets has remained
broadly flat with revenue of £14.9m (2023: £14.8m) and Communities has
increased 16% to £17.4m (2023: £15.0m) largely driven by the increase in
provision of services around the UK General Election in July 2024.
Recurring revenues for the year increased 20% from £45.5m to £54.5m and
represented 62% (2023: 62%) of the total continuing revenue. Within LPPP,
recurring revenue increased 33% to £34.9m (2023: £26.2m). Good growth in
recurring revenue across all areas was supported by the full year impact of
the Emapsite acquisition. The recurring revenues in Assets reduced 3% to
£9.4m (2023: £9.7m) with growth in our asset tracking solutions partially
offsetting a small reduction in the other solutions. Recurring revenues in
Communities improved 6% to £10.2m (2023: £9.6m), driven by growth in the
Databases and Lilie solutions.
Non-recurring revenues for the year increased 19% to £33.1m (2023: £27.7m).
Non-recurring revenue in LPPP increased by 18% to £20.4m (2023: £17.2m),
primarily driven by a strong in year customer contract renewals, cloud
transitions in the year and the full year impact of Emapsite. In Assets,
non-recurring revenue was up 6% to £5.5m (2023: £5.2m) with increases in all
solutions apart from EIM which was flat in the year. As expected,
non-recurring revenue in Communities was up 35% to £7.3m (2023: £5.4m)
having been driven by the UK General Election.
Adjusted EBITDA increased by 7% to £26.1m (2023: £24.5m), delivering a
reduced Adjusted EBITDA margin of 30% (2023: 33%), driven by the impact of mix
changes in the integration of Emapsite into the Group.
Profit before taxation
The statutory profit before tax was £8.1m (2023: £7.8m). The following table
provides a reconciliation between Adjusted EBITDA and statutory profit before
taxation for continuing operations.
2024 2023 Variance
£000 £000 £000 %
Adjusted EBITDA 26,051 24,450 1,601 7%
Depreciation (1,854) (1,636) (218) 13%
Amortisation - software licences and R&D (6,115) (5,697) (418) 7%
Amortisation - acquired intangibles (4,052) (3,622) (430) 12%
Restructuring costs (302) (378) 76 (20%)
Acquisition costs (1,156) (746) (410) 55%
Financing costs (67) (396) 329 (83%)
Share option costs (2,491) (2,631) 140 (5%)
Net finance costs (1,950) (1,524) (426) 28%
Profit before taxation 8,064 7,820 244 3%
Restructuring costs were £0.3m (2023: £0.4m). The restructuring costs in the
year are associated with simplifications of the Group structure and a capital
reduction exercise.
Acquisition costs of £1.2m (2023: £0.7m) related to due diligence on a
potential acquisition opportunity, which ended during the year and
finalisation fees associated with the acquisition of Emapsite and LandHawk,
with all payments associated with the acquisitions completed. The prior year
acquisition costs were in relation to the acquisition of Emapsite during the
year and finalisation fees associated with the acquisition of Aligned Assets
and exeGesIS.
Financing costs of £67k (2023: £396k) relate to the annual fee for the
Group's revolving credit facility (RCF) and extensions related costs. The
prior year costs incurred related to the refinancing of the Group's RCF.
Share option costs of £2.5m (2023: £2.6m) relate to the accounting charge
for awards made under the Group's Long-term Incentive Plan, in accordance with
IFRS 2 - Share-based Payments.
Net finance costs have increased to £2.0m (2023: £1.5m). Increased bank
interest payable due to an increased interest rate environment was the main
factor for the increase in the year.
The Group continues to invest in developing innovative technology solutions
across the portfolio and has capitalised development costs of £7.9m (2023:
£7.6m). The increase in the year is due to the full year impact of the FY23
acquisitions.
Taxation
The effective tax rate (ETR) on a statutory basis for the year was 34.78%
(2023: 28.6%).
The difference between the statutory rate of 25% and the ETR of 34.78% was
driven largely by expenses and international losses not deductible for tax
purposes, adjustments in respect of prior years and the application of the
statutory rate of 25% relating to deferred tax on acquired intangibles. The
ETR on an adjusted basis moved from 25% to 26% and was driven by expenses and
international losses not deductible for tax purposes.
Earnings per share and dividends
Adjusted basic earnings per share for continuing operations was 2.63p (2023:
2.65p) and adjusted diluted earnings per share remained stable at 2.61p (2023:
2.62p). Basic earnings per share for the year was down 7% at 1.16p (2023:
1.24p) and the diluted earnings per share was down 7% at 1.15p (2023: 1.23p).
The Board proposes a final dividend of 0.7p per share (2023: 0.6p), which
represents a total dividend for the year of 0.7p per share (2023: 0.6p), at a
total cost of £3.2m (2023: £2.7m).
Balance sheet and cash flows
The Group's net assets have increased to £78.3m compared to £73.3m as at 31
October 2023. The constituent movements are detailed in the Group's
consolidated Statement of Changes in Equity: which are summarised as follows:
12 months to
31 October 2024 £000
Total Equity as per FY23 Financial Report 73,277
Share option movements 2,533
Equity dividends paid (2,756)
Profit for the year 5,259
Exchange gains on translation of foreign operations (33)
Total Equity as per FY24 Financial Report 78,280
The Group continued to have good cash generation in the year. Cash generated
from operating activities before taxation was up 26% at £25.2m (2023:
£20.1m), and as a percentage of Adjusted EBITDA increased to 97% (2023: 82%).
The Group generally continues to have high levels of adjusted EBITDA to cash
conversion.
Free cashflow for the year was up 27% at £11.6m (2023: £9.1m). Free cashflow
has increased in the year due to the improved profitability.
2024 2023
£000 £000
Net cashflow from operating activities after taxation 21,108 18,599
Capitalisation and purchase of tangible and intangible assets (8,686) (8,522)
Lease payments (782) (936)
Free cashflow 11,640 9,141
The Group ended the year with net debt of £9.9m (2023: £14.7m). Net debt
comprised cash of £11.7m less bank borrowings of £10.8m and the Maltese
listed bond of £10.8m, which is due for repayment in July 2025 and will be
paid out of existing facilities. We ended the year with a net debt to Adjusted
EBITDA ratio of 0.4 times (2023: 0.6 times) with significant headroom against
the Group's financial covenants.
In October 2024 the Group extended its loan agreement with National
Westminster Bank plc, HSBC Innovation Bank Limited and Santander UK plc. The
facilities comprise a revolving credit facility of £75m and a £45m accordion
and are committed until October 2027. The Group retains significant liquidity
with cash and available committed bank facilities and significant financial
resources to deploy into new M&A opportunities.
Anoop Kang
Chief Financial Officer
Note 2024 2023
£000 £000
Continuing operations
Revenue 3 87,599 73,277
Cost of sales (24,517) (16,036)
Gross profit 63,082 57,241
Administrative expenses (53,068) (47,897)
Operating profit 10,014 9,344
Analysed as:
Earnings before depreciation, amortisation, restructuring, acquisition costs, 3 26,051 24,450
impairment, financing costs and share option costs
Depreciation (1,854) (1,636)
Amortisation (10,167) (9,319)
Restructuring costs (302) (378)
Acquisition costs (1,156) (746)
Financing costs (67) (396)
Share option costs (2,491) (2,631)
Finance income 69 219
Finance costs (2,019) (1,743)
Profit before taxation 8,064 7,820
Income tax charge (2,805) (2,238)
Profit for the year attributable to the owners of the parent 5,259 5,582
Other comprehensive loss for the year (33) (45)
Items that may be reclassified subsequently to profit or loss:
Exchange movements on translation of foreign operations net of tax
Other comprehensive loss for the year, net of tax (33) (45)
Total comprehensive income for the year 5,226 5,537
Total comprehensive income for the year attributable to owners of the parent 5,226 5,537
Earnings per share attributable to owners of the parent during the year
From continuing operations
Basic 4 1.16p 1.24p
Diluted 4 1.15p 1.23p
The accompanying accounting policies and notes form an integral part of these
financial statements.
Note 2024 2023
£000 £000
ASSETS
Non-current assets
Property, plant and equipment 1,064 1,339
Intangible assets 5 106,564 108,785
Right-of-use-assets 1,893 1,333
Deferred tax assets 2,656 2,541
Other receivables 1,154 1,201
Total non-current assets 113,331 115,199
Current assets
Trade and other receivables 21,488 21,451
Cash and cash equivalents 11,660 14,824
Total current assets 33,148 36,275
Total assets 146,479 151,474
LIABILITIES
Current liabilities
Trade and other payables 10,290 8,058
Deferred consideration - 869
Current tax payable 738 1,422
Other liabilities 24,553 26,828
Provisions 491 589
Lease liabilities 613 220
Bonds in issue 10,808 -
Total current liabilities 47,493 37,986
Non-current liabilities
Deferred tax liabilities 6,738 7,519
Lease liabilities 1,310 958
Other liabilities 1,878 2,236
Bonds in issue - 11,207
Borrowings 10,780 18,291
Total non-current liabilities 20,706 40,211
Total liabilities 68,199 78,197
Net assets 78,280 73,277
EQUITY
Called up share capital 4,602 4,562
Capital redemption reserve - 1,112
Share premium account 23 41,558
Share option reserve 6,849 5,841
Other reserves 9,397 9,165
ESOP trust (558) (526)
Foreign currency translation reserve 161 194
Retained earnings 57,806 11,371
Total equity attributable to the owners of the parent 78,280 73,277
The financial statements were approved by the Board of Directors and
authorised for issue on 27 January 2025 and are signed on its behalf by:
David Meaden Anoop
Kang
Chief Executive Officer Chief
Financial
Officer
The accompanying accounting policies and notes form an integral part of these
financial statements.
Company name: Idox plc Company
number: 03984070
Consolidated statement of changes in equity
Capital redemption Share Treasury reserve Share Other reserves ESOP Foreign currency translation reserve Retained earnings Total
Called up share capital reserve premium £000 option £000 trust £000 £000 £000
£000 £000 account reserve £000
£000 £000
Balance at 1 November 2022 4,525 1,112 41,556 (594) 4,816 8,745 (466) 239 7,483 67,416
Issue of share capital 37 - 2 - - - - - - 39
Share option costs - - - - 2,611 - - - - 2,611
Exercise / lapses of share options - - - 594 (1,586) - - - 994 2
ESOP trust - - - - - - (60) - - (60)
Reallocation of deferred consideration share exercise costs - - - - - 420 - - (420) -
Equity dividends paid - - - - - - - - (2,268) (2,268)
Transactions with owners 37 - 2 594 1,025 420 (60) - (1,694) 324
Profit for the year - - - - - - - - 5,582 5,582
Other comprehensive loss
Exchange movement on translation of foreign operations - - - - - - - (45) - (45)
Total comprehensive (loss) / income for the year - - - - - - - (45) 5,582 5,537
Balance at 31 October 2023 4,562 1,112 41,558 - 5,841 9,165 (526) 194 11,371 73,277
Issue of share capital 40 - 23 - - - - - - 63
Share option costs - - - - 2,270 - - - - 2,270
Exercise / lapses of share options - - - - (1,262) - - - 1,262 -
Deferred tax on share options - - - - - 232 - - - 232
ESOP trust - - - - - - (32) - - (32)
Capital reduction - (1,112) (41,558) - - - - - 42,670 -
Equity dividends paid - - - - - - - - (2,756) (2,756)
Transactions with owners 40 (1,112) (41,535) - 1,008 232 (32) - 41,176 (223)
Profit for the year - - - - - - - - 5,259 5,259
Other comprehensive loss
Exchange movement on translation of foreign operations - - - - - - - (33) - (33)
Total comprehensive (loss) / income for the year - - - - - - - (33) 5,259 5,226
Balance at 31 October 2024 4,602 - 23 - 6,849 9,397 (558) 161 57,806 78,280
The accompanying accounting policies and notes form an integral part of these
financial statements.
Consolidated cashflow statement
Note 2024 2023
£000 £000
Cash flows from operating activities
Profit for the year before taxation 8,064 7,820
Adjustments for:
Depreciation of property, plant and equipment 984 957
Depreciation of right-of-use assets 870 679
Amortisation of intangible assets 10,167 9,319
Acquisition / disposal finalisation costs 131 379
Finance income (69) (216)
Finance costs 1,869 1,532
Movement on debt issue costs 150 (238)
Research and development tax credit (450) (522)
Share option costs 2,491 2,631
Profit on disposal of fixed assets 14 -
Decrease / (increase) in receivables 10 (3,325)
Increase in payables 977 1,048
Cash generated by operations 25,208 20,064
Tax paid (4,100) (1,465)
Net cash from operating activities 21,108 18,599
Cash flows from investing activities
Acquisition of subsidiaries net of cash acquired (2,393) (14,105)
Purchase of property, plant and equipment (726) (895)
Purchase / capitalisation of intangible assets (7,946) (7,627)
Finance income 69 80
Net cash used in investing activities (10,996) (22,547)
Cash flows from financing activities
Interest paid (1,719) (1,439)
Loan drawdowns - 39,706
Loan related costs (506) (169)
Loan repayments (7,706) (30,000)
Principal lease payments (782) (936)
Equity dividends paid (2,756) (2,268)
Issue of own shares (165) (185)
Net cash (outflows) / inflows from financing activities (13,634) 4,709
Net movement in cash and cash equivalents (3,522) 761
Cash and cash equivalents at the beginning of the year 14,824 13,864
Exchange gains on cash and cash equivalents 358 199
Cash and cash equivalents at the end of the year 11,660 14,824
The accompanying accounting policies and notes form an integral part of these
financial statements.
Notes to the condensed financial statements
1 BASIS OF PREPARATION
The financial information contained in these condensed financial statements
does not constitute the Group's statutory accounts within the meaning of the
Companies Act 2006.
Statutory accounts for the year ended 31 October 2023 and 31 October 2024 have
been reported on, with an unqualified opinion.
Whilst the financial information included in this Annual Financial Report
Announcement has been computed in accordance with International Financial
Reporting Standards (IFRS) this announcement, due to its condensed nature,
does not itself contain sufficient information to comply with IFRS.
This Annual Financial Report Announcement includes note references that refer
to notes in this Annual Financial Report Announcement 2024.
Statutory accounts for the year ended 31 October 2023 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 31
October 2024, prepared under IFRS, are available on the Group's website:
https://www.idoxgroup.com/investors/financial-reporting/
(https://protect.checkpoint.com/v2/r06/___https:/www.idoxgroup.com/nsAjxytwxdknsfshnfq-wjutwynsld___.ZXV3MjpuZXh0MTU6YzpvOmJhMzc1MzFjM2I4ZTdjYjFhMGJkMDdiN2YwYmUzM2MwOjc6OWVjYjowYjdlNTU4ZDFiZDRiYWY4ZGVhYTQ2MTg5YjJkOThmOTllNTgxZTFlMGZkODVjMWMwY2EyYTllYjAxMDU1NzYxOnA6VDpU)
and will be delivered to the Registrar in due course. The Group's principal
accounting policies as set out in the 2023 statutory accounts have been
applied consistently in all material respects.
Going Concern
The Directors, having made suitable enquiries and analysis of the accounts,
consider that the Group has adequate resources to continue in business for the
foreseeable future. In making this assessment, the Directors have considered
the Group's budget, cash flow forecasts, available banking facility with
appropriate headroom in facilities and financial covenants, and levels of
recurring revenue.
In October 2024 the Group extended its loan agreement with National
Westminster Bank plc, HSBC Innovation Bank Limited and Santander UK plc. The
facilities comprise a revolving credit facility of £75,000,000 and a
£45,000,000 accordion and are committed until October 2027. The Group retains
significant liquidity with cash and available committed bank facilities and
has strong headroom against financial covenants.
As part of the preparation of our FY24 results, the Group has performed
detailed financial forecasting, as well as severe stress-testing in our
financial modelling, but have not identified any credible scenarios that would
cast doubt on our ability to continue as a going concern. Although the bond is
repayable in the next year, there are sufficient existing funding available to
repay this, therefore, will have limited impact on the overall funding
structure of the Group.
The Group has performed sensitivity analysis of financial modelling to
identify what circumstances could lead to liquidity challenges. This
forecasting has demonstrated that the Group would only breach its banking
covenants in the most severe of circumstances which are not considered
credible.
Therefore, this supports the going concern assessment for the business.
The Annual Financial Report Announcement was approved by the Board of
Directors on 27 January 2025 and signed on its behalf by David Meaden and
Anoop Kang.
2 RESPONSIBILITY STATEMENTS UNDER THE DISCLOSURE AND TRANSPARENCY RULES
The Directors confirm that:
· the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the company and
the undertakings included in the consolidation taken as a whole;
· the strategic report includes a fair review of the development
and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
· the annual report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the company's position and performance, business model
and strategy.
The name and function of each of the Directors for the year ended 31 October
2024 are set out in the Annual Financial Report 2024.
3 SEGMENTAL ANALYSIS
During the year ended 31 October 2024, the Group was organised into three
operating segments, which are detailed below.
IFRS 8 Operating Segments requires the disclosure of reported segments in
accordance with internal reports provided to the Group's chief operating
decision maker. The Group considers its Board of Directors to be the chief
operating decision maker and therefore has aligned the segmental disclosures
with the monthly reports provided to the Board of Directors.
· Land, Property & Public Protection (LPPP) - delivering
specialist information management solutions and services to the public sector.
· Assets - delivering engineering document management and control
solutions to asset intensive industry sectors.
· Communities (COMM) - delivering software solutions to clients
with social value running through their core.
Segment revenue comprises sales to external customers and excludes gains
arising on the disposal of assets and finance income. Segment profit reported
to the Board represents the profit earned by each segment before the
allocation of taxation, Group interest payments and Group acquisition costs.
The assets and liabilities of the Group are not reviewed by the chief
operating decision maker on a segment basis. The Group does not place reliance
on any specific customer and has no individual customer that generates 10% or
more of its total Group revenue.
The segment revenues by geographic location are as follows:
2024 2023
£000 £000
Revenues from external customers
United Kingdom 80,032 64,905
USA 4,141 4,926
Rest of Europe 2,312 2,481
Rest of World 1,114 965
87,599 73,277
Revenues are attributed to individual countries on the basis of the location
of the customer.
The segment revenues by type are as follows:
2024 2023
£000 £000
Revenues by type
Recurring revenues - LPPP 34,898 26,214
Recurring revenues - Assets 9,418 9,692
Recurring revenues - Communities 10,158 9,622
Recurring revenues 54,474 45,528
Non-recurring revenues - LPPP 20,366 17,199
Non-recurring revenues - Assets 5,475 5,153
Non-recurring revenues - Communities 7,284 5,397
Non-recurring revenues 33,125 27,749
87,599 73,277
Revenue from sale of goods (hardware and software) 71,820 43,190
Revenue from rendering of services 15,779 30,087
87,599 73,277
Recurring revenue is income generated from customers on an annual contractual
basis. Recurring revenue amounts to 62% (2023: 62%) of revenue from continued
operations, which is revenue generated annually from sales to existing
customers.
All revenues are recognised over the period of the contract, unless the only
performance obligation is to licence or re-licence a customer's existing user
without any further obligations, in which case the revenue is recognised upon
completion of the obligation.
All contracts are issued with commercial payment terms without any unusual
financial or deferred arrangements and do not include any amounts of variable
consideration that are constrained.
The Group's total outstanding contracted performance obligations at 31 October
2024 was £96,792,000 (2023: £68,198,000) and it is anticipated that 73% of
this will be recognised as revenue in FY25 and 14% in FY26.
The segment results by business unit for the year ended 31 October 2024:
LPPP Assets Communities £000 Total
£000 £000 £000
Revenue 55,264 14,893 17,442 87,599
Earnings before depreciation, amortisation, restructuring, acquisition costs, 16,854 3,299 5,898 26,051
impairment, financing costs and share option costs
Depreciation (600) (207) (177) (984)
Depreciation - right-of-use-assets (523) (189) (158) (870)
Amortisation - software licences and R&D (3,272) (2,345) (498) (6,115)
Amortisation - acquired intangibles (3,402) (224) (426) (4,052)
Restructuring costs (224) (48) (30) (302)
Acquisition costs (772) (193) (191) (1,156)
Share option costs (1,561) (423) (507) (2,491)
Segment operating profit 6,500 (330) 3,911 10,081
Financing costs (67)
Operating profit 10,014
Finance income 69
Finance costs (2,019)
Profit before taxation 8,064
The corporate recharge to the business unit EBITDA is allocated on a head
count basis.
The segment results by business unit for the year ended 31 October 2023:
LPPP Assets Communities £000 Total
£000 £000 £000
Revenue 43,413 14,845 15,019 73,277
Earnings before depreciation, amortisation, restructuring, acquisition costs, 13,885 4,199 6,366 24,450
impairment, financing costs and share option costs
Depreciation (574) (191) (192) (957)
Depreciation - right-of-use-assets (394) (153) (132) (679)
Amortisation - software licences and R&D (3,353) (1,218) (1,126) (5,697)
Amortisation - acquired intangibles (2,699) (252) (671) (3,622)
Restructuring costs (142) (192) (44) (378)
Acquisition costs (712) (16) (18) (746)
Share option costs (1,637) (397) (597) (2,631)
Segment operating profit 4,374 1,780 3,586 9,740
Financing costs (396)
Operating profit 9,344
Finance income 219
Finance costs (1,743)
Profit before taxation 7,820
The corporate recharge to the business unit EBITDA is allocated on a head
count basis.
4 EARNINGS PER SHARE
The earnings per ordinary share is calculated by reference to the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during each period, as follows:
Continuing Operations 2024 2023
£000 £000
Profit for the year 5,259 5,582
Basic earnings per share
Weighted average number of shares in issue 453,835,013 449,016,841
Basic earnings per share 1.16p 1.24p
Weighted average number of shares in issue 453,835,013 449,016,841
Add back:
Dilutive share options 3,951,198 6,563,834
Weighted average allotted, called up and fully paid share capital 457,786,211 455,580,675
Diluted earnings per share
Diluted earnings per share 1.15p 1.23p
Adjusted earnings per share 2024 2023
£000 £000
Profit for the year 5,259 5,582
Add back:
Amortisation on acquired intangibles 4,052 3,622
Impairment - 168
Acquisition costs 1,156 746
Restructuring costs 302 378
Financing costs 67 396
Share option costs 2,491 2,631
Tax effect (1,398) (1,606)
Adjusted profit for year 11,929 11,917
Weighted average number of shares in issue - basic 453,835,013 449,016,841
Weighted average number of shares in issue - diluted 457,786,211 455,580,675
Adjusted earnings per share 2.63p 2.65p
Adjusted diluted earnings per share 2.61p 2.62p
5 INTANGIBLE ASSETS
Goodwill Customer relation- Trade names Software Develop-ment costs Order backlog Total
ships
£000 £000 £000 £000 £000 £000 £000
Cost
At 1 November 2022 84,348 34,846 11,716 29,530 34,553 333 195,326
Foreign exchange - - - - (5) (14) (19)
Additions - - - 12 7,616 - 7,628
Additions on acquisition 8,894 7,650 - 1,500 - - 18,044
Impairment - - - - (667) - (667)
Fair value adjustment 22 - - - - - 22
At 31 October 2023 93,264 42,496 11,716 31,042 41,497 319 220,334
Foreign exchange - - - - (16) (12) (28)
Additions - - - - 7,946 - 7,946
Disposals (3,302) (2,304) (2,134) (1,108) - - (8,848)
At 31 October 2024 89,962 40,192 9,582 29,934 49,427 307 219,404
Amortisation and impairment
At 1 November 2022 31,709 21,131 9,513 19,739 20,491 333 102,916
Foreign exchange - - - - (5) (14) (19)
Amortisation for the year - 1,673 363 1,702 5,413 - 9,151
Impairment - - - - (499) - (499)
At 31 October 2023 31,709 22,804 9,876 21,441 25,400 319 111,549
Foreign exchange - - - - (16) (12) (28)
Amortisation for the year - 2,151 350 1,614 6,052 - 10,167
Disposals (3,302) (2,304) (2,134) (1,108) - - (8,848)
At 31 October 2024 28,407 22,651 8,092 21,947 31,436 307 112,840
Carrying amount at 31 October 2024 61,555 17,541 1,490 7,987 17,991 - 106,564
Carrying amount at 31 October 2023 61,555 19,692 1,840 9,601 16,097 - 108,785
Average remaining amortisation period (years)
31 October 2024 n/a 8.2 4.3 4.9 3.0 -
31 October 2023 n/a 11.8 5.1 5.6 2.9 -
During the year, goodwill and intangibles were reviewed for impairment in
accordance with IAS 36, 'Impairment of Assets'. An impairment charge of £Nil
(2023: £168,000) was processed in the year and is included in the
amortisation line of the statement of comprehensive income.
Fair value adjustments in the prior year were in relation to the finalisation
of acquisition accounting in respect of LandHawk Software Services Limited.
Impairment test for goodwill
For this review, goodwill was allocated to the Group's divisional business
units on the basis of the Group's operations which represent the Group's
operating segments as disclosed in the segmental analysis. As the Board
reviews results on a segmental level, the Group monitors goodwill on the same
basis.
The carrying value of goodwill by each operating segment is as follows:
2024 2023
Operating segments £000 £000
Land, Property & Public Protection (LPPP) 39,091 39,091
Assets 14,196 14,196
Communities 8,268 8,268
61,555 61,555
The recoverable amount of goodwill in each operating segment has been
determined using value-in-use calculations; with an additional fair value less
cost to sell analysis being performed for the Assets operating segment. These
calculations use pre-tax cash flow projections based on financial budgets
approved by management covering the next three financial years. The key
assumptions used in the financial budgets relate to revenue and Adjusted
EBITDA growth targets. Cash flows beyond this period are extrapolated using
the estimated growth rates stated below. Growth rates are reviewed in line
with historic actuals to ensure reasonableness and are based on an increase in
market share.
For value-in-use calculations, the growth rates and margins used to estimate
future performance are based on financial forecasts (as described above) which
is management's best estimate of short-term performance based on an assessment
of market opportunities and macro-economic conditions. In the year to 31
October 2024, the Weighted Average Cost of Capital for each operating segment
has been used as an appropriate discount rate to apply to cash flows. The same
basis was used in the year to 31 October 2023.
The assumptions used for the value-in-use calculations are as follows and are
considered appropriate for each of the risk profiles of the respective
operating segment:
Operating segments Discount rate Annualised EBITDA growth rate over three years Long term growth rate Discount rate Growth rate prior year
current year current year prior year
LPPP 15.3% 11.8% 4.7% 16.1% 3.0%
Assets 16.0% 8.8% 3.6% 16.7% 3.0%
Communities 15.3% 11.7% 3.6% 16.1% 3.0%
The long-term growth rate in the LPPP segment is higher than that of the UK
economy as we anticipate high levels of growth within our geospatial solutions
that will outpace the economy due to the high growth rate of this sector.
Individual Weighted Average Costs of Capital were calculated for each
operating segment and adjusted for the market's assessment of the risks
attaching to each operating segment's cash flows. The Weighted Average Cost of
Capital is recalculated at each period end.
Management considered the carrying value of goodwill within the Group in
comparison to the future budgets and have processed an impairment charge of
£Nil within the year in relation to the Group's goodwill (2023: £Nil).
The Group has conducted sensitivity analysis on the impairment test of each
operating segments carrying value. Sensitivities have been run on the discount
rate applied and management are satisfied that a reasonable increase in the
discount rate used would not lead to the carrying amount of each operating
segment exceeding the recoverable amount.
Sensitivities have been conducted on cash flow forecasts, reducing
management's three-year forecast EBITDA for all operating segments EBITDA by
10%. Management are satisfied that this change would not lead to the carrying
amount of each operating segment exceeding the recoverable amount, although
this does depend on achieving forecast growth over the three-year period.
Sensitivities have also been conducted on cash flow forecasts for all
operating segments reducing the growth rate to 0%. Management are satisfied
that this change would not lead to the carrying amount of each operating
segment exceeding the recoverable amount.
Management have not identified any individual assumption within the estimate
where a reasonably possibly change in estimate could result in all goodwill
headroom being eroded in LPPP or Communities, however, a change in estimates
could lead to the headroom being eroded in Assets if short-term growth is not
achieved. As such, management has also performed an additional fair value less
cost to sell analysis based on comparable market EBITDA multiples and a
buyer's view on EBITDA to apply to this multiple, which would be classed as
level 3 hierarchy under IFRS 13 Financial Instruments. In performing this
analysis, management are satisfied that a reasonably possibly change in EBITDA
multiple, or EBITDA applied to this, could not result in all goodwill headroom
being eroded.
Management have further considered the operating segments for which prior
period impairments were recorded to reduce the value-in-use of those operating
segments to their recoverable amount, and how such carrying values are subject
to the current year sensitivities noted above.
6 ACQUISITIONS
Acquisition of subsidiaries net of cash acquired
Acquisition of subsidiaries, net of cash acquired, relates to the final
payments due relation to the prior year Emapsite acquisition. These amounts
were treated as consideration in the prior year and represent final
consideration payable for working capital acquired and a deferred
consideration payable.
£000
Acquisition of subsidiaries net of cash acquired per cashflow statement (2,393)
Deferred consideration payment made in relation to Emapsite 1,393
Emapsite consideration completion adjustment 1,000
-
Cash to vendor per acquisition note -
7 POST BALANCE SHEET EVENTS
There have been no post balance sheet events which had a material impact on
the Group.
8 ADDITIONAL INFORMATION
Related Party Transactions
No related party transactions have taken place during the year that have
materially affected the financial position or performance of the Company.
Principal Risks and Uncertainties
The principal risk and uncertainties facing the Group together with the
actions being taken to mitigate them and future potential items for
consideration are set out in the Strategic Report section of the Annual
Financial Report 2024.
9 ALTERNATIVE PERFORMANCE MEASURES
Following the issuance of the Guidelines on Alternative Performance Measures
(APMs) by the European Securities and Markets Authority (ESMA) in June 2015,
the Group has included this section in its Annual Report and Accounts with the
aim of providing transparency and clarity on the measures adopted internally
to assess performance. Throughout this report, the Group has presented
financial performance measures which are considered most relevant to Idox and
are used to manage the Group's performance. These financial performance
measures are chosen to provide a balanced view of the Group's operations and
are considered useful to investors as these measures provide relevant
information on the Group's past or future performance, position, or cash
flows. The APMs, which are not defined or specified under International
Financial Reporting Standards, adopted by the Group are also commonly used in
the sectors it operates in and therefore serve as a useful aid for investors
to compare Idox's performance to its peers. The Board believes that disclosing
these performance measures enhances investors' ability to evaluate and assess
the underlying financial performance of the Group's operations and the related
key business drivers. These financial performance measures are also aligned to
measures used internally to assess business performance in the Group's
budgeting process and when determining compensation. They are also consistent
with how the business is assessed by our debt and equity providers. Details
are included within the financial review section of the Strategic Report.
We believe that these measures provide a user of the accounts with important
additional information. The following table reconciles these APMs to statutory
equivalents for continuing operations:
2024 2023
£000 £000
Adjusted EBITDA:
Profit before taxation 8,064 7,820
Depreciation and Amortisation 12,021 10,955
Restructuring costs 302 378
Acquisition costs 1,156 746
Financing costs 67 396
Share option costs 2,491 2,631
Net finance costs 1,950 1,524
Adjusted EBITDA 26,051 24,450
Free cashflow:
Net cashflow from operating activities after taxation 20,108 18,599
Capex (8,686) (8,522)
Lease payments (782) (936)
Free cashflow 11,640 9,141
Net debt:
Cash (11,660) (14,824)
Bank borrowings 10,780 18,291
Bonds in issue 10,808 11,207
Net Debt 9,928 14,674
Adjusted profit for the year and adjusted earnings per share:
Profit for the year 5,259 5,582
Add back:
Amortisation on acquired intangibles 4,052 3,622
Impairment - 168
Acquisition costs 1,156 746
Restructuring costs 302 378
Financing costs 67 396
Share option costs 2,491 2,631
Tax effect (1,398) (1,606)
Adjusted profit for year 11,929 11,917
Weighted average number of shares in issue - basic 453,835,013 449,016,841
Weighted average number of shares in issue - diluted 457,786,211 455,580,675
Adjusted earnings per share 2.63p 2.65p
Adjusted diluted earnings per share 2.61p 2.62p
The Group adjusts for certain non-underlying items which the Board believes
assists in understanding the performance achieved by the Group. These are
non-underlying items as they do not relate to the operating performance of the
Group. Profit before taxation is adjusted for depreciation, amortisation,
restructuring costs, acquisition costs, financing costs, share option costs
and net finance costs to calculate a figure for EBITDA which is commonly
quoted by our peer group and allows users to compare our performance with
those of our peers. This also provides the users of the accounts with a view
of the underlying performance of the Group which is comparable year on year.
Depreciation and amortisation are omitted as they relate to assets acquired by
the Group which may be subject to differing treatment within the peer group
and so this allows meaningful comparisons to be made.
Amortisation on acquired intangibles omitted in order to improve the
comparability between acquired and organic operations as the latter does not
recognise internally generated intangible assets. Adjusting for amortisation
provides a more consistent basis for comparison between the two.
Restructuring costs, acquisition costs, financing costs and net finance costs
are omitted as they are considered to be one off in nature or do not represent
the underlying trade of the Group. The items within these categories are
assessed on a regular basis to ensure that they do not contain items which
would be deemed to represent the underlying trade of the business.
Share option costs are excluded as they do not represent the underlying trade
of the business and fluctuate subject to external market conditions and number
of shares. This would distort year-on-year comparison of the figures.
Profit after taxation is adjusted for amortisation from acquired intangibles,
restructuring costs, acquisition costs, financing costs and share option
costs, as well as considering the tax impact of these items. To exclude the
items without excluding the tax impact would not give the complete picture.
This enables the user of the accounts to compare the core operational
performance of the Group. Adjusted earnings per share takes into account all
of the factors above and provides users of the Annual Report and Accounts
information on the performance of the business that management is more
directly able to influence and on a comparable basis for year to year. Readers
of the Annual Report and Accounts are encouraged to review the financial
statements in their entirety.
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