TIDMIDOX
RNS Number : 0200C
IDOX PLC
08 June 2023
8 June 2023
Idox plc
Half Year results for the six months ended 30 April 2023
Good first half performance, with encouraging organic growth and
continued cash generation
Idox plc (AIM: IDOX, 'Idox', 'the Company' or 'the Group'), a
leading supplier of specialist information management software and
solutions to the public and asset intensive sectors, is pleased to
announce its unaudited half year results for the six months ended
30 April 2023 ('H1 FY23').
Financial highlights
Revenue
-- Increased by 8% to GBP35.8m (H1 FY22: GBP33.2m).
-- Recurring revenues(1) increased by 7% to GBP21.2m (H1 FY22:
GBP19.8m), accounting for 59% of the Group's total revenue (H1
FY22: 60%).
Profit
-- Adjusted(2) EBITDA increased by 10% to GBP12.1m (H1 FY22: GBP11.0m).
-- Operating profit increased by 16% to GBP4.9m (H1 FY22: GBP4.3m).
-- Adjusted(2) EBITDA margin improvement at 34% (H1 FY22: 33%).
-- Statutory operating profit margin improvement to 14% (H1 FY22: 13%).
-- Statutory profit before tax increased 13% to GBP4.1m (H1 FY22: GBP3.6m).
-- Adjusted(3) diluted EPS for continuing operations increased by 10% to 1.33p (H1 FY22: 1.21p).
-- Statutory diluted EPS for continuing operations increased by 7% to 0.73p (H1 FY22: 0.68p).
Cash
-- Net cash(4) at the end of the period of GBP1.1m (31 October
2022: net debt of GBP6.7m; 30 April 2022: net debt of GBP3.8m).
-- Cash generated from operating activities before taxation as a
percentage of Adjusted EBITDA for total operations was 148% (H1
FY22: 122%).
-- Free cashflow(5) generation up 84% at GBP12.9m (H1 FY22: GBP7.0m).
-- Significant resources in place to fund M&A, including
GBP35m revolving credit facility and GBP10m accordion.
Operational highlights
-- Order intake of GBP52m, up 23% from H1 FY22.
-- New divisional structure fully embedded providing better
market focus, customer service and sharper sales execution:
o Land, Property & Public Protection (LPPP);
o Assets; and
o Communities.
-- Further innovation, development and rationalisation of the
Group's product portfolio including the transition to Cloud.
-- Good progress on developing the Group's geospatial capabilities.
-- M&A pipeline remains attractive with positive leads on a
number of complementary and accretive targets.
Current trading and outlook
-- Combination of strong recurring revenue and growing
orderbook, provides good revenue visibility for the remainder of
FY23 and into FY24.
-- The business continues to perform well and in line with the Board's expectations.
Intention to pay a final dividend in line with the Group's
stated dividend policy
David Meaden, Chief Executive Officer of Idox said:
"The Group has delivered a good performance with double digit
profit growth in a challenging macro-economic environment.
We have continued to secure both new clients and new contracts
with key customers, which has resulted in significantly higher
order intake, providing good visibility for the remainder of this
year and going into next year.
Having ended the period with net cash, compared to net debt at
the year end, we have the financial resources to continue to pursue
complementary, value enhancing acquisition targets.
Overall, our current full year financial performance is expected
to be in line with the Board's expectations reflecting our strong
order intake and consistent operational execution."
There will be a webcast at 10:00am 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 Chair investorrelations@idoxgroup.com
David Meaden, Chief Executive
Officer
Anoop Kang, Chief Financial Officer
Peel Hunt LLP (NOMAD and Broker) +44 (0) 20 7418 8900
Paul Gillam
Michael Burke
James Smith
MHP + 44 (0) 20 3128 8276
Reg Hoare idox@mhpgroup.com
Ollie Hoare
Matthew Taylor
About Idox plc
For more information see www.idoxgroup.com @Idoxgroup
Alternative Performance Measures
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 or
rolling contract. 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 is defined as earnings before amortisation,
depreciation, restructuring, acquisition costs, impairment,
financing costs and share option costs. Share option costs are
excluded from Adjusted EBITDA as this is a standard measure in the
industry and how management and our shareholders track performance
(see note 11 for reconciliation).
(3) Adjusted EPS excludes amortisation on acquired intangibles,
restructuring, financing, impairment, share option and acquisition
costs (see note 11 for reconciliation).
(4) Net cash / debt is defined as the aggregation of cash, bank
borrowings and the long-term bond (see note 11 for
reconciliation).
(5) Free cash flow is defined as net cash flow from operating
activities after taxation less capital expenditure and lease
payments (see note 11 for reconciliation).
Chair's statement
Introduction
I am pleased to introduce a strong set of results from Idox for
the first half of the financial year. Building on the Four Pillars
strategy and the three phases of Walk, Run, Fly, the business has
focussed its activities on software and has delivered encouraging
organic growth in the first half of the year against what continues
to be a challenging macro-economic and geopolitical backdrop.
During the period, revenues grew by 8% and Adjusted EBITDA by
10%. The Group has continued to be focussed on cash generating
activities, with cash generated from operating activities, before
tax, being GBP18.0m, a conversion rate of 148% against an Adjusted
EBITDA for the period of GBP12.1m. The period ended with the
business eliminating its net debt position and returning to a
positive cash position of GBP1.1m.
Effective from the beginning of the period, the business
re-organised its activities around three divisions, Land, Property
& Public Protection (LPPP), Assets and Communities. This has
allowed for a clearer focus on growth, and it is a notable that
each of the leaders in these areas, along with the appointed Head
of Engineering have been graduates of the Idox Leading Together
programme.
The Group is well placed to execute on our growth strategy. We
are confident in the momentum being built in the business and this
is supported by an increase in order intake over the period of 23%,
with a strong pipeline underpinning our confidence in the medium
term.
Where clients are extending their software engagements, we have
seen an increased demand across our portfolio to provide technical
support and managed services related to software that help overcome
the challenges of staff recruitment and provide high availability
services. The markets in which we operate have continued to evolve
and we see demand for high quality software supporting complex
business processes. We are also seeing ongoing interest in the
surfacing of data held within systems to improve business processes
and to inform strategic decision-making across supply eco-systems.
The organisational changes I referenced are allowing us to assess
and explore these opportunities more readily and we are ready to
support future growth options with appropriate investment as may be
required.
We continue to look for accretive, synergistic opportunities
that support the long-term focus on software and complement the
existing portfolio. We are confident that there are a range of
opportunities that fit the key criteria we have defined, and whilst
it is incumbent on the Board to exercise the necessary patience to
ensure that we are delivering in the best long-term interests of
shareholders, we look forward to adding further assets in due
course. In support of our growth strategy, the focus on cash and
paying down existing debt has put the business in a strong position
and we have over GBP45m of available resources for selective
acquisitions at the half year.
During the reporting period, we have undertaken work to report
our progress in matters relating to ESG and enhanced our reporting
on matters relating to diversity, equality, and inclusivity. In
each of these areas our reporting is now illustrative of the
attention the management team place upon these matters and the
culture within the business that seeks to ensure that all
stakeholders, foremost amongst these our employees, can be proud of
the Company's work in this area. The Chief Executive's statement
includes further information on our ESG related activities.
We are grateful to our clients for continuing to have confidence
in Idox as a partner and to our colleagues for their hard work and
dedication in making Idox the business it is today. We appreciate
that they choose to spend their time and talents building our
business and without their engagement and contributions these
results would not be possible.
Dividend
As previously announced, the Group paid a dividend of 0.5p per
share in April 2023 in respect of the year ending 31 October 2022.
Our current policy is to only declare a final dividend and
therefore, no interim dividend is proposed in respect of H1 FY23
(H1 FY22: GBPNil). We will keep the level of future dividends under
review in consideration of our financial position and our
confidence in the future.
Board
There have been no changes to the Board in the period. 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, however, I intend to keep this balance
under review and continued assessment.
Summary
The Group has made good progress in the period, with the
implementation of the new divisional structure facilitating double
digit Adjusted EBITDA growth. We are well positioned to increase
our portfolio through strategic M&A activity. The business
continues to perform well and in line with the Board's
expectations.
Chris Stone
Chair of the Board
Chief Executive's statement
I am pleased to report on another period of strong performance
as we continue to focus on software businesses that deliver great
value to customers in our areas of expertise. Our solutions provide
our customers with the ability to seamlessly manage complex
operational, legislative, and regulatory issues.
Our 'Four Pillars' of Revenue expansion, Margin enhancement,
Simplification and Communication are the foundation on which we
continue to grow and operate the business.
A new divisional structure has been implemented in H1 FY23,
providing better market focus, customer service and sharper sales
execution. We are already seeing the benefits of cross-sell
expansion within the customer base, through leveraging a single
sales structure for complementary solutions from across the
divisional portfolio, as evidenced by delivering encouraging
organic revenue growth.
Our financial position remains strong and supports the addition
of market expansion through the acquisition of complementary
technology and recurring revenue, through carefully selected
M&A, further extending Idox's position in our chosen
markets.
Strong progress
During this reporting period, we have seen growth in Group
revenues of 8%, with accompanying Adjusted EBITDA improving by 10%
from GBP11.0m to GBP12.1m. Following strong cash generation, we
have moved from a net debt position at 30 April 2022 of GBP3.8m to
a net cash position of GBP1.1m at 30 April 2023.
Our strong operational cadence and financial position leaves
Idox well placed for continued investment in our software
operations and provides a secure position from which to accelerate
growth.
Divisional performance
Land, Property & Public Protection
Sales order intake in Local Authority continued to rise, up 50%
on the same period last year; this included a mix of new services
and large contract extensions, securing future long-term revenues,
including contracts with The City of Edinburgh Council & City
of Wolverhampton Council - extending contracts for six & five
years respectively and East Lothian Council & Harborough
District Council, both choosing a provisioned hosting service for
their existing software platforms.
Revenues in Idox Cloud were up in H1 FY23 by 40%, with order
intake continuing to improve - up 28% on the same period last year,
welcoming new customers like Conwy County Borough Council, Blaenau
Gwent County Borough Council and Harrow Council.
Our recent acquisitions have continued to perform well; revenues
in Exegesis were up 19% on a year over year basis, with the
delivery of a number of large projects utilising our specialist
geospatial expertise in land and conservation software. Aligned
Assets order intake was also significantly up, 31% on H1 FY22, with
significant wins with the Metropolitan Police Service and Cadent
Gas, as our specialist address management tools gained further
traction in near adjacent markets to our traditional public sector
position.
Assets
Engineering Information Management (EIM) had a solid start to
the FY23 campaign, with revenues up 15% when compared to the same
period in FY22. New Fusion Live sales included KNPC through our
partners in the Middle East, Ebla and VME Process Inc and Elecnor,
as well as significant new work within the existing customer
base.
CAFM (the Group's computer aided facilities management software)
saw the launch of version 12, which helped increase sales order
intake in the first half of FY23 to over 17% compared to the same
period last year; revenues were also up in CAFM by 6% in H1.
The good performance in EIM and CAFM was partially offset by
lower than anticipated revenues in Transport and iFit.
Communities
With no major elections events, across the UK or Malta, in the
first half of FY23, Elections revenues and order intake were down
on the previous period. However, this was a busy development period
for work with the Department for Levelling Up, Housing and
Communities ('DLUHC') and Central Government and an opportunity to
prepare for what looks like a very busy FY24, which will include
the introduction of Idox Elections Cloud Services, during an
election year.
Revenue and order intake for our sexual health solution, Lilie,
were up in H1 - 6% and 25% respectively, including a number of
significant contracts extensions.
In the Database subscription businesses GrantFinder and
ResearchConnect, revenues were up over 12% on the same period last
year. Whilst GrantFinder order intake was down slightly, as
pressure on discretionary spend came under pressure particularly in
the Public Sector, ResearchConnect, which operates in the
International Higher Education markets, had a very good H1.
Following the launch of the new product version last year, order
intake was up over 100% on the same period last year and we
welcomed 14 new customers, mainly from across Northern Europe.
We also continued support for charities and organisations with
incomes of less than GBP30,000 through the "My Funding Central"
solution, providing free access to grants and funding information
following the withdrawal of these services by the National Council
Voluntary Organisation. We expect subscribers to these services to
reach over 3,500 by the end of the financial year.
Social Care continued to show good growth throughout H1,
particularly in our directory services solutions, with revenues up
15% for the period and order intake up 12%.
The 'Four Pillars' programme
Revenue expansion
During the period we demonstrated high resilience as a business
and our core areas performed well. Our strong market positions
allowed us to continue to sell more solutions and services to
existing clients, in addition to welcoming new client accounts
across the Divisions. Performance overall has been increased
through improved sales execution and better integration across the
Group, which in turn has delivered consistent margins and improved
bottom-line performance.
Order intake across the Group for the six months ended 30 April
2023 continued to grow, helping to support the in-year revenue
growth and build the future orderbook. In the period we secured
c.GBP52m of total contract value, which increased by 23% when
compared to same period last year.
Margin enhancement
As evidenced by our strong EBITDA performance we have continued
to drive improved margin. Improved operational performance is
driven through the Group organisational set-up including
development, professional services and technical teams, working
together creating scale and efficiencies. This approach provides
opportunities for shared learning, improved technical capabilities
and pooled resources providing additional support and scale across
the Group.
Notably, during the period we continued to improve and increase
our operations in India. Overall, we remain focussed on creating
further opportunities for expansion and improved margin
performance.
Simplification
We continue to invest in our internal processes and systems,
this includes the improved integration of data across all aspects
of the business bringing a consolidated view of all customers and
activities.
Utilisation of the expanded sales capabilities has improved
communications and the process of renewals and re-signs. This has
created efficiencies in the organisation and improves the overall
customer experience of working with Idox.
We continue to invest in improving and simplifying the process
of data migration across all Idox solutions, simplifying the
transition of on-premise legacy platforms to our latest cloud
provisioned services. This provides quicker and more cost-effective
transitions for all customers onboarding from both existing Idox
legacy platforms as well as new customers to Idox.
Communication
As we operate in the modern world of hybrid working, we are
working hard to provide an engaging and open environment for
everyone. We have encouraged more regular face to face activities,
where we feel that this encourages and improves collaborations
particularly in areas of creativity and development.
We have a regular and open communication strategy with all
colleagues across the business delivered through a variety of media
and channels.
CEO broadcasts underpin our open communication approach and
various colleagues from across the business contribute to providing
a broad range of insights, opinions, and inputs, and always
includes an opportunity for colleagues to ask open questions of the
panel. Participation and contribution levels from colleagues remain
very high for this type of engagement.
Personally, contributing to the selection and onboarding of new
team members enables me to outline our culture and work at Idox and
what our expectation levels are for each other. This approach helps
to ensure that we maintain our culture and authenticity and our
ambitions for both the business and individuals are fully aligned
from the outset.
Responsible
Conducting business responsibly is core to Idox's business model
and long-term strategic goals. The Board recognises the importance
of our environmental and societal responsibilities, as we build a
sustainable business which grows the value that our services and
solutions, and lasting commercial relationships, and the positive
benefits that these bring to the communities in which we operate.
Our commitment is focused in four areas: our people, our
communities, our environment, and our organisational
responsibilities. These focus areas address the seven United
Nations Sustainable Development Goals most relevant to Idox.
Our ESG steering committee (formed in FY21) has continued with
its core responsibility of understanding and implementing our
sustainable business practices a according to the material issues
of our stakeholders, whilst monitoring its effectiveness and
maintaining proper governance. This committee has sponsored further
initiatives during the first half of FY23, maintaining our focus on
Diversity, Equality and Inclusivity and the growing use of
'Employee Lounges' - small, cross business virtual meetings to
discuss how these improvements should be made in the most effective
way. The ESG steering committee has also supported a number of
employee-led initiatives to raise funds in support of various
charities and we continue to use our community days scheme to
support good causes in our local communities. The payroll giving
scheme continues to maximise the impact of employee's
contributions. The workplace wellbeing sessions also continue to be
very well received by members of the Idox team.
During the first half of FY23 we entered several social value
partnerships with clients allied to the delivery of our products
and services. We are delighted that these arrangements enable us to
make a very real and direct contribution in the clients' local
community.
Idox recognises the importance of environmental protection and
is committed to operating its business responsibly. We operate an
Environmental Management System accredited to BS EN ISO 14001:2015,
participating in the Energy Saving Opportunities Scheme ('ESOS')
and meeting the requirements of the Streamlined Energy and Carbon
Reporting ('SECR') regulations. In FY22 we further improved our
reporting of our Scope 1, 2 and 3 emissions disclosures within the
Task Force on Climate-related Financial Disclosures ('TCFD')
framework and for FY23 we will also report in line with the
Financial Reporting Council's Thematic review of TCFD disclosures
and climate in the financial statements.
In the first half of FY23 we have continued to drive initiatives
such as introducing a scheme to incentivise employees to obtain an
electric vehicle, when purchasing a new car. The ESG steering
committee also monitors our ongoing carbon reduction initiatives to
ensure we are meeting our targets, including maintaining
disciplines on avoiding unnecessary travel by continuing to take
advantage of virtual meetings and delivery of many of our
services.
Outlook
Through the new divisional structure, we have outlined a clearer
market focus and a clearer connection of future software
development to the needs of customers. This has helped build sales
order intake growth in H1 which underpins future growth and revenue
security. Our Group operations across development, onboarding and
customer engagement continue to leverage the scale of the Group and
support our improving margin performance, which we believe will
drive significant stakeholder value. The structure also provides a
strong basis for the integration of the businesses that we acquire
as part of our M&A strategy.
Our long-term strategy of providing software solutions both in
the cloud and / or provisioned through our data centre services
remains unchanged, this is built upon a commitment to deliver the
transformational needs and requirements of the markets that we
serve whilst growing recurring revenues.
We have a solid balance sheet and good cash generation, which
provides a strong foundation to continue to pursue attractive
acquisition opportunities that will be complementary to our
existing portfolio of solutions. Overall, our current full year
financial performance is expected to be in line with Board
expectations reflecting our strong order book and consistent
operational execution.
David Meaden
Chief Executive Officer
Chief Financial Officer's review
The Group established a new divisional structure, effective from
1 November 2022. The new structure comprising, Land, Property &
Public Protection (LPPP), Assets and Communities provides better
market focus, customer service and sharper sales execution. In
accordance with IFRS 8 Operating Segments, information is provided
to the chief operating decision maker, the Board of Directors, on
this basis. Accordingly, the Group has prepared its segmental
disclosures in the same manner. In addition, the Group has
re-presented comparative information in line with the new
divisional structure. Revenue has increased 8% in the period to
GBP35.8m (H1 FY22: GBP33.2m) with double-digit growth of 10% in
Adjusted EBITDA to GBP12.1m (H1 FY22: GBP11.0m).
The following table sets out the Revenue and Adjusted EBITDA for
each of the Group's segments.
H1 FY23 H1 FY22 Variance
----------------
GBP000 GBP000 GBP000 %
Revenue
LPPP 21,458 17,540 3,918 22%
Assets 7,177 6,819 358 5%
Communities 7,146 8,847 (1,701) (19%)
-------- -------- --------
Total 35,781 33,206 2,575 8%
Revenue Split
LPPP 60% 53%
Assets 20% 20%
Communities 20% 27%
-------- --------
Total 100% 100%
Adjusted EBITDA (1)
LPPP 7,735 6,217 1,518 24%
Assets 1,811 2,053 (242) (12%)
Communities 2,557 2,720 (163) (6%)
-------- -------- --------
Total 12,103 10,990 1,113 10%
Adjusted EBITDA Margin
Split
LPPP 36% 35%
Assets 25% 30%
Communities 36% 31%
-------- --------
- Total 34% 33%
(1) Adjusted EBITDA is defined as earnings before amortisation,
depreciation, restructuring, acquisition costs, impairment,
financing costs and share option costs. See note 11 for
reconciliations of the alternative performance measures.
Adjusted EBITDA increased by 10% to GBP12.1m (H1 FY22:
GBP11.0m), delivering a slightly improved Adjusted EBITDA margin of
34% (H1 FY22: 33%). The improvement in Adjusted EBITDA benefitted
from increased profitability in Local Authority and Cloud within
LPPP which was up 24% as a whole. This was partially offset by a
12% reduction in Adjusted EBITDA in Assets, where improved
profitability in EIM was more than offset by reductions in
Transport and iFit. In addition, there was a 6% reduction in
Adjusted EBITDA in Communities where improvements in Databases,
Social Care and Lilie were more than offset by the anticipated
reduction in Elections due to no significant elections in the first
half of 2023.
We continue with our efforts to improve efficiencies through
marginal gains across our sales, development, professional services
and support activities, and leverage our common resources to drive
higher margins through improved economies of scale.
Revenues
H1 FY23 H1 FY22 Variance
----------------
GBP000 GBP000 GBP000 %
Revenues
- Recurring (LPPP) 11,689 10,636 1,053 10%
- Recurring (Assets) 4,788 4,810 (22) (0%)
- Recurring (Communities) 4,674 4,384 290 7%
-------- -------- -------- ------
21,151 19,830 1,321 7%
- Non-Recurring (LPPP) 9,769 6,904 2,865 41%
- Non-Recurring (Assets) 2,389 2,009 380 19%
- Non-Recurring (Communities) 2,472 4,463 (1,991) (45%)
-------- -------- -------- ------
14,630 13,376 1,254 9%
35,781 33,206 2,575 8%
-------- -------- -------- ------
- Recurring (1) 59% 60%
- Non-Recurring (2) 41% 40%
(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 or
rolling contract. These services include Support & Maintenance,
SaaS fees, Hosting services, and some Managed service arrangements
which involve a fixed fee irrespective of consumption.
(2) Non-recurring revenue is defined as revenues without any
formal commitment from the customer to recur on an annual
basis.
Total recurring revenue increased by 7% in the period to
GBP21.2m and remained stable at 59% of the Group's total revenue
(H1 FY22: 60%). LPPP has seen an increase of 10% in recurring
revenues to GBP11.7m driven by the core Local Authority and Cloud
businesses as well as continued growth in the FY21 acquisitions.
Recurring revenue within the Assets division has remained stable at
GBP4.8m with growth in CAFM and iFit offset by modest reductions in
EIM and Transport. Communities has improved by 7% driven by a good
performance in Databases.
Non-recurring revenues have improved by 9% to GBP14.6m for the
period and account for 41% of the Group's revenue. LPPP has
benefitted from significant increases year on year in the Local
Authority and Cloud businesses. EIM has seen an increase in
non-recurring revenue, which has led to an increase in both the
overall EIM and Assets positions and has offset a reduction in
non-recurring revenue in both Transport and iFit. With no
significant elections held in the period there has been a large,
anticipated decrease in the Communities non-recurring revenue in
the period, though this is partially offset within the other
businesses in the division.
The Group's order intake for the period was up 23% on last year
to GBP52m which provides good levels of revenue visibility for the
remainder of the year and into FY24.
Profit before taxation
The following table provides a reconciliation between Adjusted
EBITDA and statutory profit before taxation for continuing
operations.
H1 FY23 H1 FY22 Variance
----------------
GBP000 GBP000 GBP000 %
Adjusted EBITDA 12,103 10,990 1,113 10%
Depreciation & Amortisation (5,288) (5,328) 40 (1%)
Restructuring costs (329) (119) (210) 176%
Acquisition costs (340) (11) (329) 2,991%
Financing costs (28) (30) 2 (7%)
Share option costs (1,200) (1,249) 49 (4%)
Net finance costs (840) (651) (189) 29%
-------- --------
Profit before taxation 4,078 3,602 476 13%
-------- -------- -------
The reported profit before tax for continuing operations was
GBP4,078,000 (H1 FY22: GBP3,602,000).
Restructuring costs of GBP329,000 (H1 FY23: GBP119,000) relate
to internal corporate restructuring, property related costs and
redundancies.
Acquisition costs of GBP340,000 (H1 FY22: GBP11,000) relate to
the final settlements in relation to the acquisition of LandHawk in
FY22 and deferred consideration arrangements associated with the
acquisitions of Aligned Assets and exeGesIS (acquired in FY21). A
final GBP0.5m is due to be paid in connection with the Aligned
Assets acquisition in June 23. This will conclude the cash payments
associated with our previous acquisitions.
Financing costs of GBP28,000 (H1 FY22: GBP30,000) relate to
professional fees incurred as part of the ongoing bank facility
agreement.
Share option costs of GBP1.2m (H1 FY22: GBP1.2m) relate to the
accounting charge for awards in the current and prior years under
the Group's Long-term Incentive Plan.
Net finance costs are broadly in line with the prior year at
GBP0.8m (H1 FY22: GBP0.7m).
The Group continues to invest in developing innovative
technology solutions across the portfolio and has capitalised
GBP3.4m of development costs during the period (H1 FY22: GBP3.1m).
The increase in the period is primarily due to the impact of the
FY22 acquisition (GBP0.1m), with the remaining GBP0.5m being driven
by an increase in development work across the portfolio.
Taxation
The effective tax rate (ETR) for the period was 18% (H1 FY22:
17%) for total operations.
The main factors contributing to the difference between the
statutory rate of 20% (blended rate: 19% from 01/11/2022 to
31/03/2023, and 25% from 01/04/2023 to 30/04/2023) and the ETR of
18% is due to tax relief on share options and research and
development costs, partially offset by the impact of overseas tax
rates and disallowable losses arising in the period.
Earnings per share and dividends
Basic earnings per share for continuing operations improved 7%
to 0.75p (H1 FY22: 0.70p). Whilst the profit for the period is up
9%, the growth in the basic earnings per share is slightly lower
due to a higher number of weighted average shares in issue compared
to April 2022. Diluted earnings per share for continuing operations
improved 7% to 0.73p (H1 FY22: 0.68p).
Adjusted basic earnings per share for continuing operations
increased 10% to 1.36p (H1 FY22: 1.24p). Adjusted diluted earnings
per share for continuing operations increased 10% to 1.33p (H1
FY22: 1.21p).
In line with H1 FY22 the Board does not propose an interim
dividend in respect of the six months ended 30 April 2023. It will
keep the level of future dividends under review in consideration of
the Group's performance, financial position and overall confidence
in the future, and expects to pay a final dividend.
Balance sheet and cashflow
The Group's net assets have increased to GBP69.5m compared to
GBP67.4m at 31 October 2022. The constituent movements are detailed
in the Group's consolidated Statement of Changes in Equity, which
are summarised as follows:
6 months
to
30 April
2023
GBP000
Total Equity as per FY22 Financial Report 67,416
Share option movements 1,173
Equity dividends paid (2,268)
Profit for the period 3,338
Exchange l osses on translation of foreign operations (162)
Total Equity as per H1 FY23 Financial Report 69,497
----------
The Group continued to have good cash generation in the period.
Cash generated from operating activities before taxation was
GBP18.0m, and as a percentage of Adjusted EBITDA was 148% (H1 FY22:
122%). The Group typically operates on a negative working capital
cycle. A significant part of the Group's contracts renew and
re-sign during the first half of the year. As a result, billings
and cash collections typically tend to be annually in advance in
the first half of the year.
H1 FY23 H1 FY22
GBP000 GBP000
Net cashflow from operating
activities after taxation 17,136 11,127
Capex (3,785) (3,588)
Lease payments (423) (509)
Free cashflow(1) 12,928 7,030
-------- --------
(1) Free cash flow is defined as net cash flow from operating
activities after taxation less capital expenditure and lease
payments (see note 11 for reconciliation).
Given the strong cash collection during the first half of the
year, the Group ended the period with net cash of GBP1.1m compared
to a net debt position of GBP6.7m at 31 October 2022. Net cash
comprised cash of GBP23.7m less bank borrowings of GBP11.2m and the
Maltese listed bond of GBP11.4m.
The Group retains significant liquidity with cash and available
committed bank facilities and has strong headroom against financial
covenants. The Group's total available facilities at 30 April 2023
consisted of a revolving credit facility of GBP35m and GBP10m
accordion which continue to 18 June 2024, providing scope for
select acquisitions. Refinancing of the Group's facilities is
underway and expected to conclude well in advance of the end of the
financial year.
Anoop Kang
Chief Financial Officer
Consolidated interim statement of comprehensive income
6 months 12 months
to to
6 months
to 30 April 30 April 31 October
2023 2022 2022
Note (unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
Continuing operations
Revenue 3 35,781 33,206 66,184
Cost of sales (7,717) (8,389) (15,050)
--------------- -------------- -------------
Gross profit 28,064 24,817 51,134
Administrative expenses (23,146) (20,564) (42,476)
--------------- --------------
Operating profit 4,918 4,253 8,658
Analysed as:
Adjusted EBITDA 11 12,103 10,990 22,509
Depreciation & Amortisation (5,288) (5,328) (10,584)
Restructuring costs (329) (119) (470)
Acquisition costs (340) (11) (183)
Financing costs (28) (30) (30)
Share option costs (1,200) (1,249) (2,584)
----------------------------------------------- ------ --------------- -------------- -------------
Finance income 61 219 97
Finance costs (901) (870) (2,153)
Profit before taxation 4,078 3,602 6,602
Income tax charge 5 (740) (527) (991)
Profit for the period from continuing
operations 3,338 3,075 5,611
Discontinued operations
Loss for the period from discontinued
operations 6 - (567) (567)
Profit for the period attributable
to the owners of the parent 3,338 2,508 5,044
Other comprehensive (loss) / income
for the period
Items that will be reclassified subsequently
to profit or loss:
Exchange movement on translation of
foreign operations net of tax (162) 310 428
Other comprehensive (loss) / income
for the period, net of tax (162) 310 428
--------------- -------------- -------------
Total comprehensive income for the
period attributable to owners of the
parent 3,176 2,818 5,472
=============== ============== =============
Earnings per share attributable to owners of
the parent during the period
From continuing operations
Basic 7 0.75p 0.70p 1.27p
Diluted 7 0.73p 0.68p 1.24p
From continuing and discontinued operations
Basic 7 0.75p 0.57p 1.14p
Diluted 7 0.73p 0.56p 1.11p
The accompanying notes form an integral part of these financial
statements.
Consolidated interim balance sheet
At 30 April
At 31 October
2023 2022
At 30 April
Note (unaudited) 2022 (unaudited) (audited)
GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 1,275 1,341 1,380
Intangible assets 8 91,368 91,530 92,410
Right-of-use-assets 1,628 2,000 1,782
Deferred tax assets 2,804 2,133 2,679
Total non-current assets 97,075 97,004 98,251
---------------
Current assets
Trade and other receivables 23,734 20,966 17,912
Current tax receivable - 725 -
Cash and cash equivalents 23,722 21,560 13,864
Total current assets 47,456 43,251 31,776
-------------- ------------------ ---------------
Total assets 144,531 140,255 130,027
-------------- ------------------ ---------------
Liabilities
Current liabilities
Trade and other payables 8,070 8,404 6,811
Deferred consideration 420 2,691 2,271
Current tax payable 365 - 165
Other liabilities 34,691 30,928 23,451
Provisions 555 853 453
Lease liabilities 473 563 545
Total current liabilities 44,574 43,439 33,696
-------------- ------------------ ---------------
Non-current liabilities
Deferred tax liabilities 5,673 6,256 6,086
Lease liabilities 1,145 1,454 1,265
Other liabilities 1,035 727 1,038
Bonds in issue 11,362 10,848 11,325
Borrowings 11,245 14,466 9,201
-------------- ------------------ ---------------
Total non-current liabilities 30,460 33,751 28,915
-------------- ------------------ ---------------
Total liabilities 75,034 77,190 62,611
-------------- ------------------ ---------------
Net assets 69,497 63,065 67,416
============== ================== ===============
Equity
Called up share capital 4,535 4,511 4,525
Capital redemption reserve 1,112 1,112 1,112
Share premium account 41,558 41,556 41,556
Treasury reserve - (594) (594)
Share option reserve 5,469 3,673 4,816
Other reserves 9,165 8,789 8,745
ESOP trust (505) (445) (466)
Foreign currency translation
reserve 77 121 239
Retained earnings 8,086 4,342 7,483
-------------- ------------------ ---------------
Equity attributable to the
owners of the parent 69,497 63,065 67,416
============== ================== ===============
The financial statements were approved by the Board of Directors
and authorised for issue and are signed on its behalf by:
David Meaden Anoop Kang
Chief Executive Officer Chief Financial Officer
The accompanying notes form an integral part of these financial
statements.
Consolidated interim statement of changes in equity
Called Foreign
up Capital Share Share currency
share redemption premium Treasury options Other ESOP translation Retained
capital reserve account reserve reserve reserves* trust reserve earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
November 2021
(audited) 4,469 1,112 41,556 (594) 3,962 8,789 (417) (189) 2,122 60,810
Issue of share
capital 42 - - - - - - - - 42
Share option
costs - - - - 1,207 - - - - 1,207
Exercise /
lapses
of share
options - - - - (1,496) - - - 1,496 -
ESOP trust - - - - - - (28) - - (28)
Equity
dividends
paid - - - - - - - - (1,784) (1,784)
Transactions
with owners 42 - - - (289) - (28) - (288) (563)
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Profit for the
period - - - - - - - - 2,508 2,508
Other
comprehensive
income
Exchange
movement
on
translation
of foreign
operations - - - - - - - 310 - 310
Total
comprehensive
income for
the
period - - - - - - - 310 2,508 2,818
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
At 30 April
2022
(unaudited) 4,511 1,112 41,556 (594) 3,673 8,789 (445) 121 4,342 63,065
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Issue of share
capital 14 - - - - - - - - 14
Share options
costs - - - - 1,328 - - - - 1,328
Exercise /
lapses
of share
options - - - - (185) - - - 185 -
ESOP trust - - - - - - (21) - - (21)
Exercise of
deferred
consideration
shares - - - - - (420) - - 420 -
Fair value of
deferred
consideration
shares on
purchase
of subsidiary - - - - - 376 - - - 376
Transactions
with owners 14 - - - 1,143 (44) (21) - 605 1,697
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Profit for the
period - - - - - - - - 2,536 2,536
Other
comprehensive
income
Exchange
movement
on
translation
of foreign
operations - - - - - - - 118 - 118
Total
comprehensive
income for
the
period - - - - - - - 118 2,536 2,654
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Balance at 31
October 2022
(audited) 4,525 1,112 41,556 (594) 4,816 8,745 (466) 239 7,483 67,416
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Issue of share
capital 10 - 2 - - - - - - 12
Share option
costs - - - - 1,198 - - - - 1,198
Exercise /
lapses
of share
options - - - 594 (545) - - - (47) 2
ESOP trust - - - - - - (39) - - (39)
Reallocation
of
deferred
consideration
share
exercise
costs - - - - - 420 - - (420) -
Equity
dividends
paid - - - - - - - - (2,268) (2,268)
Transactions
with owners 10 - 2 594 653 420 (39) - (2,735) (1,095)
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
Profit for the
period - - - - - - - - 3,338 3,338
Other
comprehensive
loss
Exchange
movement
on
translation
of foreign
operations - - - - - - - (162) - (162)
Total
comprehensive
(loss) /
income
for the
period - - - - - - - (162) 3,338 3,176
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
At 30 April
2023
(unaudited) 4,535 1,112 41,558 - 5,469 9,165 (505) 77 8,086 69,497
-------- ----------- -------- --------- -------- ---------- ------- ------------ --------- --------
*Other reserves includes merger relief reserve of GBP1.6m.
The accompanying notes form an integral part of these financial
statements.
Consolidated interim cash flow statement
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2023 2022 (unaudited) 2022 (audited)
Note (unaudited)
GBP000 GBP000 GBP000
Cash flows from operating activities
Profit for the period before
taxation 4,078 3,035 6,035
Adjustments for:
Depreciation of property, plant
and equipment 480 371 848
Depreciation of right-of-use
assets 346 363 749
Amortisation of intangible assets 8 4,462 4,594 8,987
Loss on disposal / purchase
of subsidiary 299 567 657
Finance income (8) (199) (73)
Finance costs 840 810 2,034
Debt issue costs amortisation 60 60 119
Research and development tax
credit (258) (161) (449)
Share option costs 9 1,200 1,249 2,584
Profit on disposal of fixed
assets - - (15)
Movement in receivables (5,821) (4,428) (1,316)
Movement in payables 12,285 7,177 (1,896)
--------------- -------------------- ------------------
Cash generated by operations 17,963 13,438 18,264
Tax paid (827) (2,311) (2,617)
Net cash from operating activities 17,136 11,127 15,647
Cash flows from investing activities
Acquisition of subsidiaries
net of cash acquired* (2,184) (651) (2,219)
Disposal of subsidiaries - (148) (146)
Proceeds on sale of fixed assets - 11 15
Purchase of property, plant
and equipment (387) (404) (911)
Purchase / capitalisation of
intangible assets 8 (3,398) (3,184) (6,647)
Finance income 36 37 73
------------------
Net cash used in investing
activities (5,933) (4,339) (9,835)
Cash flows from financing activities
Interest paid (325) (227) (997)
Loan drawdowns 5,000 2,500 2,500
Loan related costs (77) (76) (183)
Loan repayments (3,000) (3,600) (9,100)
Principal lease payments (423) (509) (927)
Equity dividends paid 4 (2,268) (1,784) (1,784)
Issue of own shares (106) (51) (133)
--------------- --------------------
Net cash outflows from financing
activities (1,199) (3,747) (10,624)
Net movement in cash and cash
equivalents 10,004 3,041 (4,812)
Cash and cash equivalents at
the beginning of the period 13,864 18,283 18,283
Exchange (losses) / gains on cash
and cash equivalents (146) 236 393
--------------- -------------------- ------------------
Cash and cash equivalents at the
end of the period 23,722 21,560 13,864
=============== ==================== ==================
*The GBP2.2m acquisition of subsidiaries balance relates to the
settlement of deferred consideration balances on Aligned Assets and
exeGesIS in the period.
The accompanying accounting policies and notes form an integral
part of these financial statements.
Notes to the interim accounts
1 General information
Idox plc is a leading supplier of software and services for the
management of Local Government and other organisations. The Company
is a public limited company, limited by shares, which is listed on
the AIM Market of the London Stock Exchange and is incorporated and
domiciled in the UK. The address of its registered office is 2nd
Floor, 1310 Waterside, Arlington Business Park, Theale, Reading,
RG7 4SA. The registered number of the Company is 03984070. There is
no ultimate controlling party.
The financial statements are prepared in pounds sterling .
2 Basis of preparation
The financial information for the period ended 30 April 2023 set
out in this interim report does not constitute statutory accounts
as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 31 October 2022
have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified.
This interim report has been prepared solely to provide
additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. The
report should not be relied on by any other party or for any other
purpose.
The report contains certain forward-looking statements. These
statements are made by the Directors in good faith based on the
information available to them up to the time of their approval of
this report, but such statements should be treated with caution due
to the inherent uncertainties, including both economic and business
risk factors, underlying any such forward-looking information.
The interim financial information has been prepared using the
same accounting policies and estimation techniques as will be
adopted in the Group financial statements for the year ending 31
October 2023. The Group financial statements for the year ended 31
October 2022 were prepared in accordance with International
Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards
as issued by the IASB. The Group has not applied IAS 34 'Interim
Financial Reporting', which is not mandatory for AIM companies, in
the preparation of these interim financial statements.
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, taken to be a
period of at least 12 months from the approval of these interim
financial statements. 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 December 2019 the Group had refinanced with the National
Westminster Bank plc, Silicon Valley Bank and Santander UK plc. The
facilities, which comprise a revolving credit facility of
GBP35,000,000, were extended in October 2021 and are committed
until 18 June 2024. In addition to this the Group can draw down on
a further GBP10,000,000 via an accordion facility. Refinancing of
the Group's facilities is progressing and expected to be completed
well in advance of the 2023 year-end.
As part of the preparation of our FY22 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. The financial forecasting and stress
testing assumptions remain valid at 30 April 2023.
Recent developments regarding Silicon Valley Bank have had no
impact on the Group's financial position and operations.
On the basis of the above considerations, the Directors have a
reasonable expectation that the Group will have adequate resources
to continue in business for the foreseeable future and therefore
continue to adopt the going concern basis in preparing the interim
financial statements.
3 Segmental analysis
During the period ended 30 April 2023, the Group was organised
into three operating segments which are detailed below.
To provide a more targeted focus on the markets that we serve,
and to ensure closer alignment to our customers, effective from 1
November 2022, the Group have implemented a divisional structure
that consolidates Business Units delivering comparable technical
solutions or serving similar markets: Land, Property & Public
Protection, Communities and Assets. Each business unit is deemed an
operating segment. Operating segments with similar economic
characteristics have grouped into three reportable segments as set
out 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 results for the six months to 30 April 2023
were:
LPPP Assets COMM Total
GBP000 GBP000 GBP000 GBP000
Revenue 21,458 7,177 7,146 35,781
-------- -------- -------- --------
Adjusted EBITDA (note 11) 7,735 1,811 2,557 12,103
-------- -------- -------- --------
Depreciation & Amortisation (3,032) (1,010) (1,246) (5,288)
Restructuring costs (121) (166) (42) (329)
Acquisition costs (340) - - (340)
Share option costs (741) (210) (249) (1,200)
-------- -------- -------- --------
Segment operating profit 3,501 425 1,020 4,946
-------- -------- -------- --------
Financing costs (28)
Operating profit 4,918
--------
Finance income 61
Finance costs (901)
--------
Profit before tax 4,078
--------
The corporate recharge to the business unit is allocated on a
head count basis.
Following the establishment of the new divisional structure from
1 November 2022 as described above, the re-presented segmental
information for the six months to 30 April 2022 were:
Continuing Discontinued
operations operations
LPPP Assets COMM total Content Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 17,540 6,819 8,847 33,206 - 33,206
-------- -------- -------- ------------ ------------- --------
Adjusted EBITDA
(note 11) 6,217 2,053 2,720 10,990 - 10,990
-------- -------- -------- ------------ ------------- --------
Depreciation &
Amortisation (2,833) (991) (1,504) (5,328) - (5,328)
Restructuring costs (24) (84) (11) (119) - (119)
Acquisition costs (11) - - (11) - (11)
Share option costs (643) (274) (332) (1,249) - (1,249)
-------- -------- -------- ------------ ------------- --------
Segment operating
profit 2,706 704 873 4,283 - 4,283
-------- -------- -------- ------------ ------------- --------
Financing costs (30) - (30)
Operating profit 4,253 - 4,253
Loss from sale
of discontinued
operations - (567) (567)
Finance income 219 - 219
Finance costs (870) - (870)
------------ ------------- --------
Profit before tax 3,602 (567) 3,035
------------ ------------- --------
The segment revenues by geographic location were as follows:
H1 FY23 H1 FY22
GBP000 GBP000
Revenues from external customers:
United Kingdom 31,727 29,546
North America 2,421 2,008
Europe 1,123 1,407
Rest of World 510 245
-------- --------
35,781 33,206
======== ========
4 Dividends
During the period a dividend was paid in respect of the year
ended 31 October 2022 of 0.5p per ordinary share at a total cost of
GBP2,268,000 (H1 FY22: 0.4p per ordinary share at a total cost of
GBP1,784,000) .
The directors do not propose a dividend in respect of the
interim period ended 30 April 2023 (H1 FY22: GBPNil).
5 Tax on profit on ordinary activities
The tax charge is made up as follows:
12 months
to
6 months 6 months 31 October
to to 2022
30 April 30 April
2023 (unaudited) 2022 (unaudited) (audited)
GBP000 GBP000 GBP000
Current tax
UK corporation tax on profit for
the year 1,308 361 2,022
(Over) / under provision in respect
of prior periods (20) 43 (181)
------------------- ------------------- -------------
Total current tax 1,288 404 1,841
-------------
Deferred tax
Origination and reversal of timing
differences (525) 11 (775)
Adjustment for rate change (31) (12) (141)
Adjustments in respect of prior
periods 8 124 66
Total deferred tax (548) 123 (850)
------------------- ------------------- -------------
Total tax charge 740 527 991
=================== =================== =============
Unrelieved trading losses of GBP749,890 (H1 FY22: GBP1,217,000)
remain available to offset against future taxable trading profits
(excluding unrecognised losses of GBP58,806 (H1 FY22: GBP549,249)
in the UK and GBP14,433,730 (H1 FY22: GBP11,480,717) overseas).
6 Discontinued operations
There were no discontinued operations during the six months
ended 30 April 2023. In 2021, the Group disposed of its continental
compliance business and Netherlands Grant consultancy operations.
The loss on disposal reported in the prior periods relates to the
finalisation of balances in connection with these disposals.
The results of the discontinued operations, which have been
excluded in the consolidated income statement, were as follows:
12 months
6 months 6 months to
to 30 April to 30 April 31 October
2023 (unaudited) 2022 (unaudited) 2022 (audited)
GBP000 GBP000 GBP000
Revenue - - -
Expenses - - -
Loss on disposal - (567) (567)
Profit before tax - (567) (567)
Attributable tax expense - - -
Net (loss) / profit attributable
to discontinued operations - (567) (567)
=================== ================== ================
During the period, Content contributed GBPNil (H1 FY22: GBP0.1m)
to the Group's net operating cash flows and incurred GBPNil (H1
FY22: GBP0.1m) in respect of investing and financing
activities.
7 Earnings per share
The earnings per 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:
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2023 2022 2022
Continuing operations (unaudited) (unaudited) (audited)
Profit for the period (GBP000) 3,338 3,075 5,611
-------------- -------------- -------------
Basic earnings per share
Weighted average number of shares
in issue 447,942,345 441,605,209 443,413,006
-------------- -------------- -------------
Basic earnings per share 0.75p 0.70p 1.27p
============== ============== =============
Weighted average number of shares
in issue 447,942,345 441,605,209 443,413,006
Add back:
Dilutive share options 7,150,750 10,214,904 8,636,936
Weighted average allotted, called
up and fully paid share capital 455,093,095 451,820,113 452,049,942
-------------- -------------- -------------
Diluted earnings per share
Diluted earnings per share 0.73p 0.68p 1.24p
============== ============== =============
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2023 2022 2022
Adjusted earnings per share (unaudited) (unaudited) (audited)
Adjusted profit for the period
(GBP000) (see note 11) 6,075 5,483 11,015
Weighted average number of shares
in issue - basic 447,942,345 441,605,209 443,413,006
Weighted average number of shares
in issue - diluted 455,093,095 451,820,113 452,049,942
Adjusted basic earnings per share 1.36p 1.24p 2.48p
=============== ============== =============
Adjusted diluted earnings per share 1.33p 1.21p 2.44p
=============== ============== =============
6 months 6 months 12 months
to to to
30 April 30 April 31 October
2023 2022 2022
Total operations (unaudited) (unaudited) (audited)
Profit for the period (GBP000) 3,338 2,508 5,044
-------------- -------------- -------------
Basic earnings per share
Weighted average number of shares
in issue 447,942,345 441,605,209 443,413,006
-------------- -------------- -------------
Basic earnings per share 0.75p 0.57p 1.14p
============== ============== =============
Weighted average number of shares
in issue 447,942,345 441,605,209 443,413,006
Add back:
Dilutive share options 7,150,750 10,214,904 8,636,936
Weighted average allotted, called
up and fully paid share capital 455,093,095 451,820,113 452,049,942
-------------- -------------- -------------
Diluted earnings per share
Diluted earnings per share 0.73p 0.56p 1.11p
============== ============== =============
8 Intangibles
Customer Trade Development
Goodwill relationships names Software costs Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 31 October 2022 52,639 13,715 2,203 9,791 14,062 92,410
Additions - - - - 3,398 3,398
Fair Value Adjustment 22 - - - - 22
Amortisation - (757) (188) (904) (2,613) (4,462)
At 30 April 2023 52,661 12,958 2,015 8,887 14,847 91,368
======== ============== ====== ======== =========== =======
No impairment charge was incurred during H1 FY23 (H1 FY22:
GBPNil).
9 Long-term incentive plan (LTIP)
During the period, no options were granted under the LTIP.
The Group recognised a total charge of GBP1,200,000 (H1 FY22:
GBP1,249,000) for equity-settled share-based payment transactions
related to the LTIP during the period. The total cost was in
relation to outstanding share options and share options granted in
the year.
The number of options in the LTIP scheme is as follows:
30 April 30 April 31 October
2023 2022 2022
No. No. No.
Outstanding at the beginning of
the period 16,978,852 15,557,052 15,557,052
Granted - 5,462,258 6,460,939
Forfeited - - (194,375)
Exercised (1,626,974) (4,182,312) (4,844,764)
-------------------------------------- ------------ ------------ ------------
Outstanding at the end of the period 15,351,878 16,836,998 16,978,852
-------------------------------------- ------------ ------------ ------------
Exercisable at the end of the period 3,473,759 4,722,051 6,034,065
-------------------------------------- ------------ ------------ ------------
10 Post balance sheet events
There have been no post balance sheet events which had a
material impact on the Group.
11 Alternative Performance Measures
Within these financial statements, the Group makes reference to
Alternative Performance Measures (APMs) which are not defined or
specified under International Financial Reporting Standards. The
Group uses these APMs 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.
We believe that these measures provide a user of the accounts
with important additional information. The following tables set out
the Alternative Performance Measures in respect of continuing
operations:
12 months
6 months 6 months to 31
to 30 April to 30 April October
Continuing operations 2023 (unaudited) 2022 (unaudited) 2022
GBP000 GBP000 GBP000
Adjusted EBITDA:
Profit before taxation 4,078 3,602 6,602
Depreciation & Amortisation 5,288 5,328 10,584
Restructuring costs 329 119 470
Acquisition costs 340 11 183
Financing costs 28 30 30
Share option costs 1,200 1,249 2,584
Net finance costs 840 651 2,056
------------------ ------------------ ------------
Adjusted EBITDA 12,103 10,990 22,509
================== ================== ============
Free cashflow:
Net cashflow from operating activities
after taxation 17,136 11,127 15,647
Capex (3,785) (3,588) (7,558)
Lease payments (423) (509) (927)
Free cashflow 12,928 7,030 7,162
================== ================== ============
Net (cash) / debt:
Cash (23,722) (21,560) (13,864)
Bank borrowings 11,245 14,466 9,201
Bonds in issue 11,362 10,848 11,325
------------------ ------------------ ------------
Net (cash) / debt (1,115) 3,754 6,662
================== ================== ============
Adjusted profit for the period and adjusted
earnings per share:
Profit for the period 3,338 3,075 5,611
Add back:
Amortisation from acquired intangibles 1,769 1,881 3,670
Restructuring costs 329 119 183
Acquisition costs 340 11 470
Financing costs 28 30 30
Share option costs 1,200 1,249 2,584
Tax effect (929) (882) (1,533)
------------------ ------------------ ------------
Adjusted profit for the period 6,075 5,483 11,015
================== ================== ============
Weighted average number of shares in
issue - basic 447,942,345 441,605,209 443,413,006
Weighted average number of shares in
issue - diluted 455,019,425 451,820,113 452,049,942
Adjusted basic earnings per share 1.36p 1.24p 2.48p
Adjusted diluted earnings per share 1.33p 1.21p 2.44p
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
trading picture 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 cannot 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 gives the user of the 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.
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END
IR BIGDLDSGDGXR
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June 08, 2023 02:00 ET (06:00 GMT)
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