Idox reports solid first half of trading
Information management software specialist Idox reported a positive first-half on Thursday, including an increase in revenue and profit.
The AIM-traded firm said that in terms of revenue, it experienced 8% growth, reaching £35.8m in the six months ended 30 April.
Recurring revenues also saw a 7% increase, reaching £21.2m and accounting for 59% of total revenue.
The company's adjusted EBITDA was 10% firmer at £12.1m, while operating profit saw a significant rise of 16% to £4.9m.
Those positive figures resulted in an improvement in both adjusted EBITDA margin to 34%, and in statutory operating profit margin to 14%, when compared to the corresponding period last year.
Idox reported a 13% increase in statutory profit before tax, reaching £4.1m, while adjusted diluted earnings per share for continuing operations expanded by 10% to 1.33p, while statutory diluted earnings per share for continuing operations grew 7% to 0.73p.
The company said its financial position improved, with net cash of £1.1m at the end of the period - a notable change from net debt of £6.7m recorded on 31 October, and net debt of £3.8m on 30 April last year.
Additionally, cash generated from operating activities before tax as a percentage of adjusted EBITDA for total operations increased to 148%, from 122% in the prior year.
Idox said its free cash flow generation also saw a significant increase of 84%, reaching £12.9m, while it also had significant resources available for mergers and acquisitions, including a £35m revolving credit facility and a £10m accordion.
Looking ahead, Idox said it was optimistic about its current trading and outlook.
The board said the combination of strong recurring revenue and a growing order book provided good revenue visibility for the rest of the 2023 financial year, and into 2024.
It said the business was performing well and in line with the board's expectations, adding that it intended to pay a final dividend in line with its stated dividend policy.
“The group has delivered a good performance with double digit profit growth in a challenging macro-economic environment,” said chief executive officer David Meaden.
“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, Meaden said Idox had 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.”
At 0902 BST, shares in Idox were down 1.48% at 67.38p.
Reporting by Josh White for Sharecast.com.