IDOX PLC IDOX
SOFTWARE & COMPUTER SERVICES
16 March 2022
IDOX.L
63.4p
Market Cap: £282.4m
SHARE PRICE (p)
Flying above the turbulence
Today's AGM trading update for the period 1 November 2021 to date confirms that Idox is trading in line with expectations, with the integration of recent acquisitions running to plan. At present, the geo-political situation and industry-wide recruitment issues are on the radar but not causing significant impacts.
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Today's AGM trading update confirms that Idox continues to perform in line with management's expectations, both operationally and financially. The resilience of the business and its markets is showing through. Furthermore, the order book visibility remains good, giving management confidence - and allowing us to retain our revenue and profit forecasts.
12m high/low | 77p/60p |
Source: LSE Data (priced as at prior close) |
KEY DATA
Net (Debt)/Cash | £(8.1)m (at 31/10/21) |
Enterprise value | £290.5m |
Index/market | AIM |
Next news | Update, May 2022 |
Shares in Issue (m) | 445.4 |
Chairman | Chris Stone |
Chief Executive | David Meaden |
Chief Financial | Anoop Kang |
Officer | |
COMPANY DESCRIPTION
Idox is a software business selling to UK Public Sector and global Engineering clients.
- The update states that Idox continues to win new contracts and extend existing ones in both the Public Sector Software and Engineering Information Management businesses.
- Aligned Assets, thinkWhere and exegesis, the three acquisitions made in 2021, are integrating well and running to plan. The statement also confirms that there is 'good line of sight over an attractive M&A pipeline', which gives us encouragement that Idox will continue to execute on this part of its 'fly' phase.
- The statement also makes reference, following the announcement on 21 February, to the fact that Anoop Kang is joining the board in the role of CFO, with Rob Grubb, the previous incumbent, moving to a more strategic, M&A focused role. Anoop has significant listed PLC level experience, with a particular track record in investor relations and financial reporting, and control across diverse organisations - experience that clearly complements Rob Grubb's new role.
- The statement notes current geo-political uncertainties and that there are challenges to recruiting within the industry - although it does not suggest that either are causing significant issues at present. A further trading update is to be issued after the close of the half year ending 30 April 2022.
www.idoxplc.com
IDOX IS A RESEARCH CLIENT OF PROGRESSIVE
ANALYSTS
This update provides us with further evidence of the resilience of the business and the logic of its strategy. Idox, and its management, continues to deliver on its four pillars strategy: revenue expansion, gross margin improvement, simplicity and communication - the value of the latter two being particularly appreciated at this time.
Ian Robertson
+44 (0) 20 7781 5318 irobertson@progressive-research.com
Gareth Evans
+44 (0) 20 7781 5301 gevans@progressive-research.com
www.progressive-research.com
FYE OCT (£M) | 2020 | 2021 | 2022E | 2023E | 2024E |
Revenue | 68.0 | 62.2 | 70.2 | 74.0 | 77.7 |
Adj EBITDA | 19.6 | 19.5 | 22.8 | 25.0 | 26.5 |
Fully Adj PBT | 10.5 | 12.4 | 14.6 | 16.5 | 17.8 |
Fully Adj EPS (p) | 1.8 | 2.4 | 2.6 | 2.8 | 3.0 |
EV/Sales (x) | 4.3x | 4.7x | 4.1x | 3.9x | 3.7x |
EV/EBITDA (x) | 14.8x | 14.9x | 12.7x | 11.6x | 11.0x |
PER (x) | 35.5x | 26.7x | 24.2x | 22.5x | 20.9x |
Source: Company Information and Progressive Equity Research estimates.
This publication should not be seen as an inducement under MiFID II regulations.
Please refer to important disclosures at the end of the document.
16 March 2022 | ||||||
Financial Summary: Idox | ||||||
Year end: October (£m unless shown) | ||||||
PROFIT & LOSS | 2020 | 2021 | 2022E | 2023E | 2024E | |
Revenue | 68.0 | 62.2 | 70.2 | 74.0 | 77.7 | |
Adj EBITDA | 19.6 | 19.5 | 22.8 | 25.0 | 26.5 | |
Adj EBIT | 12.7 | 12.7 | 15.6 | 17.4 | 18.7 | |
Reported PBT | 2.7 | 7.3 | 9.1 | 10.9 | 11.7 | |
Fully Adj PBT | 10.5 | 12.4 | 14.6 | 16.5 | 17.8 | |
NOPAT | 10.3 | 10.3 | 12.7 | 13.4 | 14.4 | |
Reported EPS (p) | 0.1 | 1.3 | 1.6 | 1.9 | 2.1 | |
Fully Adj EPS (p) | 1.8 | 2.4 | 2.6 | 2.8 | 3.0 | |
Dividend per share (p) | 0.3 | 0.4 | 0.5 | 0.6 | 0.7 | |
CASH FLOW & BALANCE SHEET | 2020 | 2021 | 2022E | 2023E | 2024E | |
Operating cash flow | 22.0 | 10.0 | 23.8 | 25.6 | 24.8 | |
Free Cash flow | 11.5 | (4.4) | 12.9 | 14.2 | 13.4 | |
FCF per share (p) | 2.6 | (1.0) | 2.9 | 3.2 | 3.0 | |
Acquisitions | (0.6) | (10.5) | (3.2) | (1.5) | (1.5) | |
Disposals | (0.3) | 10.7 | 1.0 | 0.0 | 0.0 | |
Shares issued | (0.1) | 0.1 | 0.8 | 0.8 | 0.8 | |
Net cash flow | 10.3 | (11.3) | 9.5 | 11.0 | 9.5 | |
Overdrafts / borrowings/bonds | (46.9) | (26.4) | (26.4) | (26.4) | (26.4) | |
Cash & equivalents | 30.8 | 18.3 | 27.8 | 38.8 | 48.3 | |
Net (Debt)/Cash | (16.1) | (8.1) | 1.4 | 12.4 | 21.9 | |
NAV AND RETURNS | 2020 | 2021 | 2022E | 2023E | 2024E | |
Net asset value | 47.0 | 60.8 | 74.1 | 80.6 | 86.6 | |
NAV/share (p) | 10.6 | 13.6 | 16.6 | 18.0 | 19.4 | |
Net Tangible Asset Value | (34.7) | (31.2) | (9.3) | (2.0) | 5.2 | |
NTAV/share (p) | (7.8) | (7.0) | (2.1) | (0.5) | 1.2 | |
Average equity | 45.8 | 53.9 | 63.7 | 70.0 | 76.4 | |
Post-tax ROE (%) | 23.0% | 22.9% | 22.9% | 23.6% | 23.3% | |
METRICS | 2020 | 2021 | 2022E | 2023E | 2024E | |
Revenue growth | N/A | (8.6%) | 12.9% | 5.4% | 5.0% | |
Adj EBITDA growth | (0.3%) | 16.8% | 9.6% | 6.0% | ||
Adj EBIT growth | 0.2% | 22.9% | 11.3% | 7.5% | ||
Adj PBT growth | 17.4% | 18.3% | 12.8% | 7.9% | ||
Adj EPS growth | 32.9% | 10.4% | 7.2% | 7.9% | ||
Dividend growth | N/A | 33.3% | 23.8% | 21.2% | 16.7% | |
Adj EBIT margins | 18.7% | 20.5% | 22.3% | 23.5% | 24.1% | |
VALUATION | 2020 | 2021 | 2022E | 2023E | 2024E | |
EV/Sales (x) | 4.3 | 4.7 | 4.1 | 3.9 | 3.7 | |
EV/EBITDA (x) | 14.8 | 14.9 | 12.7 | 11.6 | 11.0 | |
EV/NOPAT (x) | 28.2 | 28.2 | 22.9 | 21.7 | 20.2 | |
PER (x) | 35.5 | 26.7 | 24.2 | 22.5 | 20.9 | |
Dividend yield | 0.5% | 0.6% | 0.8% | 0.9% | 1.1% | |
FCF yield | 4.1% | (1.6%) | 4.6% | 5.1% | 4.8% |
Source: Company information and Progressive Equity Research estimates
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16 March 2022
Disclaimers and Disclosures
Copyright 2022 Progressive Equity Research Limited ("PERL"). All rights reserved. Progressive's research is commissioned by the subject company under contract and is freely available to the public and all institutional investors. Progressive does not offer investors the ability to trade securities. Our publications should not, therefore, be considered an inducement under MiFID II regulations. PERL provides professional equity research services, and the companies researched pay a fee in order for this research to be made available. This report has been commissioned by the subject company and prepared and issued by PERL for publication in the United Kingdom only. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however, PERL does not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of PERL at the time of publication, and any estimates are those of PERL and not of the companies concerned unless specifically sourced otherwise. PERL is authorised and regulated by the Financial Conduct Authority (FCA) of the United Kingdom (registration number 697355).
This document is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. PERL does not make investment recommendations. Any valuation given in a research note is the theoretical result of a study of a range of possible outcomes, and not a forecast of a likely share price. PERL does not undertake to provide updates to any opinions or views expressed in this document.
This document has not been approved for the purposes of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom. It has not been prepared in accordance with the legal requirements designed to promote the independence of investment research. It is not subject to any prohibition on dealing ahead of the dissemination of investment research.
PERL does not hold any positions in the securities mentioned in this report. However, PERL's directors, officers, employees and contractors may have a position in any or related securities mentioned in this report. PERL or its affiliates may perform services or solicit business from any of the companies mentioned in this report.
The value of securities mentioned in this report can fall as well as rise and may be subject to large and sudden swings. In addition, the level of marketability of the shares mentioned in this report may result in significant trading spreads and sometimes may lead to difficulties in opening and/or closing positions. It may be difficult to obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance.
To arrange a meeting with the management team, or for further information about Progressive, please contact: Keith Hodgskiss
+44 (0) 20 7781 5300 khodgskiss@progressive-research.com
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IDOX plc published this content on 16 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 March 2022 07:47:07 UTC.
